Understanding Investment Management: Healthequity Blog Explores 3(38) Managers

A 3(38) Investment Manager is a codified investment fiduciary on a retirement plan as defined by ERISA section 3(38). The 3(38) investment manager is appointed by the plan sponsor to manage investments and has discretionary responsibilities. They are responsible for the selection, monitoring, and replacement of investment options as needed. They will often act as a plan consultant by helping to manage other providers, as well as provide financial education. The 3(38) investment manager role is one of the three primary fiduciary roles.

A 3(38) investment manager is a codified investment fiduciary on a retirement plan

The 3(38) investment manager is appointed by the plan sponsor to manage investments and has discretionary responsibilities. They assume complete investment fiduciary responsibility and must acknowledge this status in writing. The plan sponsor relinquishes discretion and influence in roster decisions but monitors the work of the advisor to ensure they are performing their duties in line with the advisory agreement and investment policy of the plan.

The 3(38) investment manager role is one of the three primary fiduciary roles. The other two are the 3(16) Plan Administrator and the 3(21) Named Fiduciary. The 3(16) fiduciary focuses on the administrative functions of the plan, such as meeting reporting requirements and making disclosures to plan participants. The 3(21) fiduciary provides investment advice and makes recommendations, but does not have discretion over plan assets.

By hiring a 3(38) investment manager, plan administrators can share their fiduciary responsibilities. This can help to improve compliance, lower costs, and allow the administrator to focus on their business. It also provides an additional layer of protection and can help to reduce the risk, cost, and work associated with sponsoring an employee retirement plan.

Overall, a 3(38) investment manager is a codified investment fiduciary who is responsible for making investment decisions on behalf of a retirement plan and its participants. They work to ensure that the investments are in the best interests of the participants and assume the associated fiduciary liability.

The role is defined by ERISA section 3(38)

The role of a 3(38) investment manager is defined by ERISA section 3(38). This role is one of the three primary fiduciary roles. A 3(38) investment manager is a codified investment fiduciary on a retirement plan. The 3(38) investment manager is responsible for selecting, managing, monitoring, and benchmarking the investment offerings of the plan. They have discretionary authority to direct the investment of funds.

The 3(38) investment manager is appointed by the plan sponsor to manage investments and make discretionary decisions. They are responsible for the selection, monitoring, and replacement of investment options as needed. They will often act as a plan consultant by helping to manage other providers, as well as providing financial education.

The 3(38) investment manager assumes fiduciary responsibility from the named fiduciary, who is usually the employer or an officer of the employer, such as the CEO, COO, or CFO. The 3(38) investment manager is typically a bank, investment advisor, or insurance company.

The benefits of hiring a 3(38) investment manager include improved compliance, lower costs, and the ability for the employer to focus on their business. By outsourcing the role of the investment manager, employers can reduce their workload and costs associated with a 401(k) plan. It also provides protection from lawsuits and liability for investment roster decisions.

The 3(38) investment manager is responsible for selecting, managing, monitoring and benchmarking the investment offerings of the plan

The 3(38) investment manager is a codified investment fiduciary on a retirement plan as defined by ERISA section 3(38). The 3(38) investment manager is responsible for selecting, managing, monitoring, and benchmarking the investment offerings of the plan.

The 3(38) investment manager is appointed by the plan sponsor to manage investments and has discretionary responsibilities. They are responsible for the selection, monitoring, and replacement of investment options as needed. They will often act as a plan consultant by helping to manage other providers, as well as provide financial education. The 3(38) investment manager is one of three primary fiduciary roles that HealthEquity Retirement fills by appointment. The other two are the 3(16) Plan Administrator and the 3(21) Named Fiduciary.

The 3(38) investment manager assumes a complete investment fiduciary stance as recognised by ERISA. They must acknowledge this status in writing and have a written agreement with the plan sponsor. Only an RIA, bank, or insurance company can assume this role.

The 3(38) investment manager is responsible for making financial decisions, but the plan sponsor is still responsible for ensuring the advisor fulfils their obligations. The plan sponsor monitors the work of the advisor to ensure the 3(38) is performing its duties in line with the advisory agreement and investment policy of the 401(k) plan. The advisor should make this easy by providing reports, often quarterly, of all that's occurring and any changes being made and why.

The plan sponsor is protected from suits and liability for investment roster decisions, and this service saves the company the time, energy, and internal costs of managing the investment roster.

The 3(38) investment manager assumes sole fiduciary liability for investment selection and monitoring

The 3(38) investment manager is appointed by the plan sponsor to manage investments and has discretionary responsibilities. They are responsible for making financial decisions, while the plan sponsor is responsible for ensuring the advisor fulfils their obligations. The plan sponsor also monitors the work of the advisor to ensure they are performing their duties in line with the advisory agreement and investment policy of the 401(k) plan.

The 3(38) investment manager role is one of three primary fiduciary roles. The other two are the 3(16) Plan Administrator and the 3(21) Named Fiduciary. The 3(38) investment manager is a codified investment fiduciary on a retirement plan as defined by ERISA section 3(38). This means that they have been granted authorization to act as a fiduciary on behalf of the plan. As authorized, the investment manager acts with discretion to direct, choose, dispose of, and make investment decisions on behalf of the plan and its participants.

The duties of a 3(38) investment manager are set by ERISA and further enhanced by precedent from the Department of Labor. They can also vary depending on how they are defined by the plan document and related agreements. Generally speaking, those responsibilities include creating and managing an Investment Policy Statement, forming an Investment Committee, holding investment committee meetings, prudently selecting plan investment options, reporting on investments regularly, benchmarking investments, and replacing funds and updating models as needed.

The 3(38) investment manager role can be outsourced to an RIA firm, bank, or insurance company.

The 3(38) investment manager must be a registered investment adviser (RIA) under federal or state law, a bank, or an insurance company

A 3(38) Investment Manager is a codified investment fiduciary on a retirement plan as defined by ERISA section 3(38). The 3(38) investment manager is responsible for selecting, managing, monitoring, and benchmarking the investment offerings of the plan. In some plans, they also have discretionary authority to direct the investment of funds.

The 3(38) investment manager is appointed by the plan sponsor to manage investments and has discretionary responsibilities. They are responsible for the selection, monitoring, and replacement of investment options as needed. They will often act as a plan consultant by helping to manage other providers, as well as provide financial education.

The employer would act as an Investment Manager by default unless another party is explicitly named. Many employers have created investment committees to satisfy 3(38) requirements. If there is no investment committee, then the trustee would be required to fulfill the functions of this role. Outsourcing the role of a 3(38) investment manager can reduce an employer's workload and costs.

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