Plan Sponsor Education
If your name is on the plan document as trustee or "named fiduciary," ERISA holds you personally responsible for prudent investment decisions. Personal assets — home, savings, business equity — can be reached to make participants whole.
ERISA §409
ERISA §409(a) states that any fiduciary who breaches their duties "shall be personally liable to make good to such plan any losses to the plan resulting from each such breach." That's not corporate liability. It's personal.
The four fiduciary duties
Duty of Loyalty
Act solely in the interest of participants — not the company, not the recordkeeper.
Duty of Prudence
The 'prudent expert' standard: act with the care of someone familiar with such matters.
Duty to Diversify
Minimize the risk of large losses through appropriate diversification.
Duty to Follow the Plan
Follow the plan document — and monitor whether it still fits the workforce.
3(21) vs 3(38)
| 3(21) Co-Fiduciary | 3(38) Investment Manager | |
|---|---|---|
| Investment decisions | Recommends — you approve | Decides on your behalf |
| Fiduciary liability | Shared — you retain most | Transferred in writing |
| Ongoing monitoring | Advises; you must act | Manager acts prudently |
| What you retain | All investment liability | Duty to prudently hire & monitor us |
Our commitment
We accept 3(38) discretionary fiduciary status in writing for every plan we manage.
As a fee-only Registered Investment Advisor, we take no commissions and are legally obligated to act in your participants' best interest.
Talk to a fiduciary advisorEducational content — not legal, tax, or investment advice. Consult your ERISA counsel for guidance on your specific plan.
