What is the difference between a 3(16), 3(21), and 3(38) fiduciary?

An ERISA 3(16) Plan Administrator handles administrative fiduciary duties such as filings, notices, and distribution approvals. A 3(21) Adviser gives investment advice while the plan sponsor keeps approval authority and liability. A 3(38) Investment Manager has discretion to select, monitor, and replace plan investments and accepts fiduciary liability for those decisions in writing.

What does an ERISA 3(16) Plan Administrator do?

Under ERISA §3(16), the plan administrator is responsible for operating the plan: signing and filing Form 5500, distributing required participant notices, approving loans and distributions, and monitoring plan operations against the plan document. By default the employer is the 3(16) administrator unless another party is appointed in writing.

Does appointing a 3(16) administrator remove all employer liability?

No. Appointing an independent 3(16) administrator can transfer named administrative duties, but the employer retains the duty to prudently select and monitor that provider, and duties not expressly delegated in the service agreement stay with the employer.

Do I need all three fiduciary roles?

Most plans need each function covered, but not always by three separate outside firms. Investment discretion is typically the largest exposure for a small-business owner, which is why the 3(38) role is usually delegated first. Administrative delegation under 3(16) is a separate decision based on internal staffing capacity.

Which fiduciary roles does Gatekeeper serve?

Gatekeeper Investment Advisers serves as your ERISA 3(21) Adviser. We do not act as the 3(38) Investment Manager or as your 3(16) Plan Administrator. We engage an independent third-party 3(38) Investment Manager through the RFM 401(k) Maneuver PEP to accept discretionary investment fiduciary responsibility.

Which fiduciary role carries the most personal liability for an owner?

Investment selection and monitoring generally create the largest exposure, because ERISA §409(a) makes a breaching fiduciary personally liable for plan losses. Delegating investment discretion to an independent 3(38) Investment Manager is usually the highest-impact step a plan sponsor can take.

Plan Sponsor Education

3(16) vs 3(21) vs 3(38): the three ERISA fiduciary roles, compared

ERISA splits 401(k) fiduciary responsibility into three commonly outsourced roles: the 3(16) Plan Administrator who runs the plan, the 3(21) Adviser who recommends investments, and the 3(38) Investment Manager who holds discretion over them. Knowing which role covers which duty tells you exactly how much liability is still sitting with you as the employer.

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Side by side

What each fiduciary role actually covers

	3(16) Plan Administrator	3(21) Adviser	3(38) Investment Manager
Primary function	Plan administration and operations	Investment advice and education	Discretionary investment management
Decision authority	Acts on administrative matters named in the service agreement	Recommends only — sponsor approves	Acts without sponsor approval on investments
Typical duties	Form 5500 filing, participant notices, loan and distribution approvals, plan document compliance	Fund recommendations, IPS support, committee meetings, participant education	Selects, monitors, and replaces the fund lineup; documents prudent process
Who is liable	Provider for delegated administrative acts; sponsor keeps oversight duty	Plan sponsor retains investment liability	3(38) manager for investment decisions; sponsor keeps oversight duty
What the sponsor retains	Prudent selection and monitoring of the administrator, plus undelegated duties	Full investment fiduciary responsibility	Duty to prudently hire and monitor the manager
Gatekeeper's role	Not provided by Gatekeeper	Gatekeeper serves as your 3(21) Adviser	Independent third party engaged via the RFM 401(k) Maneuver PEP

ERISA §3(16)

The Plan Administrator

The 3(16) Plan Administrator is responsible for operating the plan according to its document: signing and filing the Form 5500, distributing required participant notices, approving loans, hardships, and distributions, and keeping day-to-day operations compliant. Unless the plan document names someone else, the employer is the 3(16) administrator by default — which is why many owners are fiduciaries without ever agreeing to be one.

Delegating this role to an independent administrator can move the named administrative duties off internal staff, but the employer still must prudently select and monitor that provider, and anything left out of the service agreement stays with the employer.

ERISA §3(21)

The Adviser

A 3(21) Adviser provides investment advice and education to the plan sponsor and committee. Because the adviser recommends rather than decides, the plan sponsor approves each decision and keeps investment fiduciary liability. Advice improves the process and the documentation — it does not transfer the exposure.

Gatekeeper Investment Advisers serves in this 3(21) Adviser capacity for the plans we support.

ERISA §3(38)

The Investment Manager

A 3(38) Investment Manager holds discretionary authority to select, monitor, and replace plan investments, and accepts fiduciary responsibility for those decisions in writing. Once the appointment is made prudently, liability for individual investment selections moves to the manager, and the sponsor's remaining duty is to monitor the manager.

Gatekeeper does not act as the 3(38) Investment Manager. We engage an independent third-party 3(38) Investment Manager through the RFM 401(k) Maneuver PEP to assume that discretionary responsibility for your plan.

FAQ

Common questions about ERISA fiduciary roles.

What is the difference between a 3(16), 3(21), and 3(38) fiduciary?: An ERISA 3(16) Plan Administrator handles administrative fiduciary duties such as filings, notices, and distribution approvals. A 3(21) Adviser gives investment advice while the plan sponsor keeps approval authority and liability. A 3(38) Investment Manager has discretion to select, monitor, and replace plan investments and accepts fiduciary liability for those decisions in writing.
What does an ERISA 3(16) Plan Administrator do?: Under ERISA §3(16), the plan administrator is responsible for operating the plan: signing and filing Form 5500, distributing required participant notices, approving loans and distributions, and monitoring plan operations against the plan document. By default the employer is the 3(16) administrator unless another party is appointed in writing.
Does appointing a 3(16) administrator remove all employer liability?: No. Appointing an independent 3(16) administrator can transfer named administrative duties, but the employer retains the duty to prudently select and monitor that provider, and duties not expressly delegated in the service agreement stay with the employer.
Do I need all three fiduciary roles?: Most plans need each function covered, but not always by three separate outside firms. Investment discretion is typically the largest exposure for a small-business owner, which is why the 3(38) role is usually delegated first. Administrative delegation under 3(16) is a separate decision based on internal staffing capacity.
Which fiduciary roles does Gatekeeper serve?: Gatekeeper Investment Advisers serves as your ERISA 3(21) Adviser. We do not act as the 3(38) Investment Manager or as your 3(16) Plan Administrator. We engage an independent third-party 3(38) Investment Manager through the RFM 401(k) Maneuver PEP to accept discretionary investment fiduciary responsibility.
Which fiduciary role carries the most personal liability for an owner?: Investment selection and monitoring generally create the largest exposure, because ERISA §409(a) makes a breaching fiduciary personally liable for plan losses. Delegating investment discretion to an independent 3(38) Investment Manager is usually the highest-impact step a plan sponsor can take.

Not sure which roles your plan has covered?

We'll review your plan documents and service agreements at no cost and show you which fiduciary duties are still sitting with you.

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Educational content — not legal, tax, or investment advice. The fiduciary roles that apply to your plan depend on your plan documents and service agreements. Consult your ERISA counsel for guidance on your situation.