Fiduciary Adviser Engagements
The Employee Retirement Income Security Act of 1974 (ERISA) requires employer-plan sponsors to select and monitor plan investments in the same manner as persons familiar with generally accepted investment theories and prevailing investment industry practices. But, in the case where the plan fiduciaries lack the necessary technical knowledge to properly perform these duties, they are required “to obtain the advice of a qualified, independent expert.” See DOL Regulation §2509.95-1(c)(6)
As a result, many plan sponsors have begun to recognize the need to obtain professional assistance with regard to constructing prudent investment evaluation and selection processes as well as provide support related to the ongoing diligence required to monitor and evaluate the plan's designated investment options. Therefore, by engaging a professional Fiduciary Adviser, plan fiduciaries can demonstrate the plan’s investment-related duties are being prudently managed by an individual or organization that possess the requisite expertise required to meet the obligations imposed under ERISA.
In such engagements, the extent to which employer-plan sponsors (and other fiduciaries) may be shielded from prospective liability is determined by the scope of authority delegated to the Fiduciary Adviser:
- ERISA 3(21) Fiduciary Consultant: Under this construct, the employer-plan sponsor retains final decision-making authority over the plan’s designated investment options; whereby Fi401k Advisors performs as an Investment Consultant. Consequently, Fiduciary Insight performs as a co-fiduciary alongside the employer-plan sponsor – sharing in the responsibility for managing prudent investment process. Learn more
- ERISA 3(38) Fiduciary Manager: Under this construct, the employer-plan sponsor delegates full discretion over the designation and management of the plan’s investment options; whereby Fi401k Advisors performs as the plan’s designated Investment Manager. Consequently, the employer-plan sponsor has sole responsibility for demonstrating the prudence of Fiduciary Insight’s appointment and remaining diligent in their oversight of Fiduciary Insight. Learn more
As a result, the Fi401k Advisor's eFiduciary Adviser services are designed to provide a flexible set of solutions for employer-plan sponsors to effectively shield themselves from potential liability related to the selection, management and oversight of the 401(k) plan’s designated investment options.