The advisor should educate the - ANSWER plan sponsor about hiring fiduciary service
providers, including the different roles service providers, including the different roles service
providers may take on within the plan, how to select a qualified candidate, and the plan
sponsor's ongoing responsibility to monitor them.
Under the DOL regulation, many advisors to retirement plans and their participants will be -
ANSWER 3(21) fiduciaries. They will act alongside other fiduciary service providers who
are also not necessarily named in the plan document but who exercise discretionary control
over plan provisions or plan investments.
The fiduciary definition has two parts: - ANSWER who is a fiduciary
to what extent the person is a fiduciary
Clarifying fiduciary status is arguably incomplete without addressing both.
A best practice for a service provider's formal description of services might therefore include
two parts: - ANSWER a. an acknowledgment of fiduciary status
b. clarification as to the extent of responsibilities
As a non-fiduciary advisor, you can - ANSWER educate your client and present possible
investments for the Retirement Plan Committee consideration.
If you recommend a specific fund replacement to the plan sponsor or plan participants, you
are considered to be - ANSWER giving investment advice and are therefore a functional
fiduciary to the plan.
1
,If fiduciaries of participants use your recommendations - as opposed to information - to
make investment decisions, this could be considered - ANSWER a fiduciary act
As a non-fiduciary advisor, you can meet with your client on a recurring basis (quarterly, an-
nually, etc) if providing - ANSWER general investment reports or discussing the appropri-
ateness of the investments to the plan without making specific investment suggestions.
Plan fiduciaries will almost always have to hire - ANSWER service providers for their plan
under their ERISA "duty to obtain expert assistance."
As a best practice, the advisor can help fiduciaries select: - ANSWER the service provid-
ers, which usually includes a TPA and a record keeper.
In owner driven smaller plans, the advisor can assist the - ANSWER plan sponsor's HR
staff - which is likely to be one person in working with the various plan service providers.
In larger participant driven plans, the advisor can work with - ANSWER the HR director,
CFO, and the retirement plan committee to evaluate service providers.
A 3(21) fiduciary does not serve as a fiduciary investment manager, but instead usually as -
ANSWER investment advice fiduciary
f your client wants an advisor to manager plan investments, or just the QDIA, they can hire a
- ANSWER 3(38) fiduciary advisor.
A 3(21) fiduciary advisors can recommend investments but the final decision on which in-
vestments to choose is up to the - ANSWER plan fiduciaries.
A 3(16) plan administrator can take on administrative duties for the plan but does not act in -
ANSWER an investment capacity.
2
, A non-fiduciary advisors can provide - ANSWER education
The DOL is not required to be notified if - ANSWER the plan hires a 3(21) advisor.
The fiduciaries should do a review of the service provider qualifications in order to prove a -
ANSWER prudent process was not followed when selecting the service provider. They
should also review the service agreement, document the decision process, and have a ser-
vice agreement with the 3(21) advisor.
A 3(21) advisor fiduciary is considered a - ANSWER fiduciary to the plan, but different
than advisors working as 3(38) fiduciaries, it is rarely named in the plan document.
The service agreement between the plan sponsor and the TPA is what determines if - AN-
SWER a TPA will work as a 3(16) fiduciary Plan Administrator.
ERISA 3(16) fiduciaries serve as the - ANSWER "Plan Administrator" and are responsible
for administrative responsibilities in the plan. These include assuring the plan operation re-
mains in compliance with the plan document, providing administrative and compliance doc-
uments for the fiduciary file and assuring that employee notices are drafted and distributed.
ERISA 3(21) and 3(38) fiduciaries serve as - ANSWER investment fiduciaries and their
main duty under ERISA is to provide investment advice.
3(38) fiduciaries may also serve as the - ANSWER named investment manager for the
plan, and unlike 3(21) investment advice fiduciaries, will have discretionary control over plan
investments.
Employee education through enrollment meetings is performed by - ANSWER retirement
plan advisors, including non-fiduciary, 3(21), and 3(38) fiduciary advisors. Assisting with
3
providers, including the different roles service providers, including the different roles service
providers may take on within the plan, how to select a qualified candidate, and the plan
sponsor's ongoing responsibility to monitor them.
Under the DOL regulation, many advisors to retirement plans and their participants will be -
ANSWER 3(21) fiduciaries. They will act alongside other fiduciary service providers who
are also not necessarily named in the plan document but who exercise discretionary control
over plan provisions or plan investments.
The fiduciary definition has two parts: - ANSWER who is a fiduciary
to what extent the person is a fiduciary
Clarifying fiduciary status is arguably incomplete without addressing both.
A best practice for a service provider's formal description of services might therefore include
two parts: - ANSWER a. an acknowledgment of fiduciary status
b. clarification as to the extent of responsibilities
As a non-fiduciary advisor, you can - ANSWER educate your client and present possible
investments for the Retirement Plan Committee consideration.
If you recommend a specific fund replacement to the plan sponsor or plan participants, you
are considered to be - ANSWER giving investment advice and are therefore a functional
fiduciary to the plan.
1
,If fiduciaries of participants use your recommendations - as opposed to information - to
make investment decisions, this could be considered - ANSWER a fiduciary act
As a non-fiduciary advisor, you can meet with your client on a recurring basis (quarterly, an-
nually, etc) if providing - ANSWER general investment reports or discussing the appropri-
ateness of the investments to the plan without making specific investment suggestions.
Plan fiduciaries will almost always have to hire - ANSWER service providers for their plan
under their ERISA "duty to obtain expert assistance."
As a best practice, the advisor can help fiduciaries select: - ANSWER the service provid-
ers, which usually includes a TPA and a record keeper.
In owner driven smaller plans, the advisor can assist the - ANSWER plan sponsor's HR
staff - which is likely to be one person in working with the various plan service providers.
In larger participant driven plans, the advisor can work with - ANSWER the HR director,
CFO, and the retirement plan committee to evaluate service providers.
A 3(21) fiduciary does not serve as a fiduciary investment manager, but instead usually as -
ANSWER investment advice fiduciary
f your client wants an advisor to manager plan investments, or just the QDIA, they can hire a
- ANSWER 3(38) fiduciary advisor.
A 3(21) fiduciary advisors can recommend investments but the final decision on which in-
vestments to choose is up to the - ANSWER plan fiduciaries.
A 3(16) plan administrator can take on administrative duties for the plan but does not act in -
ANSWER an investment capacity.
2
, A non-fiduciary advisors can provide - ANSWER education
The DOL is not required to be notified if - ANSWER the plan hires a 3(21) advisor.
The fiduciaries should do a review of the service provider qualifications in order to prove a -
ANSWER prudent process was not followed when selecting the service provider. They
should also review the service agreement, document the decision process, and have a ser-
vice agreement with the 3(21) advisor.
A 3(21) advisor fiduciary is considered a - ANSWER fiduciary to the plan, but different
than advisors working as 3(38) fiduciaries, it is rarely named in the plan document.
The service agreement between the plan sponsor and the TPA is what determines if - AN-
SWER a TPA will work as a 3(16) fiduciary Plan Administrator.
ERISA 3(16) fiduciaries serve as the - ANSWER "Plan Administrator" and are responsible
for administrative responsibilities in the plan. These include assuring the plan operation re-
mains in compliance with the plan document, providing administrative and compliance doc-
uments for the fiduciary file and assuring that employee notices are drafted and distributed.
ERISA 3(21) and 3(38) fiduciaries serve as - ANSWER investment fiduciaries and their
main duty under ERISA is to provide investment advice.
3(38) fiduciaries may also serve as the - ANSWER named investment manager for the
plan, and unlike 3(21) investment advice fiduciaries, will have discretionary control over plan
investments.
Employee education through enrollment meetings is performed by - ANSWER retirement
plan advisors, including non-fiduciary, 3(21), and 3(38) fiduciary advisors. Assisting with
3
