Plan Sponsor Liability of Oversight On A 3(38) Fiduciary

As the plan sponsor of a qualified retirement plan, your clients have the responsibility to ensure the investments are handled appropriately.  Fortunately, the law does not require that they become an expert, but it does require that they obtain the help they need.  

When a plan sponsor hires an independent ERISA 3(38) fiduciary, they retain the responsibility of oversight on that outside fiduciary, and they need to understand the qualifications of any candidate hired to perform this work.  Among the information needed is:

  • What are the credentials and what is the experience of the key consultants at the fiduciaries’ firm?
  • Does their liability insurance cover them as ERSIA 3(38) Investment Managers?
  • Are they certified by CEFEX or another reputable, independent organization?
  • What are their levels of liability insurance coverage?
  • Has anyone at the firm been disciplined by regulatory authorities?
  • How much experience do they possess in serving as plan-level investment fiduciaries?

Fidelis Fiduciary Management operates in a transparent way so that you have access to this, and other pertinent information when hiring us and on an annual basis in our Investment Fiduciary Annual Review™ report.

There are many more questions to ask before you hire a fiduciary.  We recommend that you be cautious about any firm that can’t—or won’t—answer your questions.

“Fidelis is your partner, not a product.” ℠

David M. Montgomery, CPFA®, AIF®, CRPS®

President & Co-Founder