Fiduciary Liability Management

Written agreement accepting Fiduciary Status to all clients:

  • ERISA Section 3(21) – Co-Fiduciary
  • ERISA Section 3(38) – Investment Manager
  • Committee Member Fiduciary Education
  • Written Meeting Bylaws / Quarterly Meetings
  • Documented Fiduciary Best Practices
  • Electronic Document Storage – EFA Fiduciary VaultTM
  • 404(c) Compliance & Support

Plan sponsors must decide "Can I Do it Myself" or "Do I Need help" just like plan participants…

Plan sponsors wear many hats. One of the most uncomfortable may be fiduciary responsibility for the selection of retirement plan investments. While the Employee Retirement Income Security Act of 1974 (ERISA) guidelines designate two different types of investment fiduciaries in sections 3(21) and 3(38), it’s difficult for many plan sponsors to determine which is the best fit for their retirement plans.

Uncertainty about investment selection and monitoring is familiar to plan sponsors because their participants have the same questions. Can I do this myself? or Do I need help? Plan sponsors must decide whether they prefer a "Do it Myself," "Help Me" or "Do it for Me" investment selection approach.

ERISA’s high standards require a fiduciary to manage the investment array with: "the care, skill, prudence, and diligence, under the circumstances the prevailing, that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character…

Since its beginning, EFA has been partnering with plan sponsors to guide them through the retirement plan maze. We welcome the responsibilities that come with being a fiduciary and offer three levels of contracts (see insert). We understand the challenges you are facing and have made it our business to respond accordingly.

Fiduciary Contracts Available:

ERISA 3(21) Fiduciary — (general Fiduciary) any person/entity having discretion over the administration and management of the plan, controlling the assets of the plan or providing investment advice to the plan in exchange for a fee or other compensation [ERISA Sec.3(21)(a)].

ERISA 3(38) Fiduciary — (registered investment manager) is appointed and must acknowledge in writing it is a Fiduciary with respect to the plan to manage the assets of the plan.

Additional Fiduciary Roles:

ERISA 408(g) Fiduciary — Qualified Fiduciary Adviser (QFA) is a fiduciary of the plan who provides investment advice to participants/beneficiaries for a fee. It is prohibited for any fiduciary to profit from the use of plan assets.

404(c) Fiduciary - EFA will act as you plans §404(c)and provide the annual §404(c) Participant Notice. In addition, EFA documents annually your adherence to all the subsections of §404(c).