THE DIFFERENCE BETWEEN A 3(21) AND A 3(38) INVESTMENT FIDUCIARY

AND WHY YOU MAY HAVE THE WRONG ONE

If you’re offering a retirement plan to your employees, you may or may not realize that you are the investment fiduciary to your ERISA plan. This means that you have potential liability at both the corporate and personal level as the investment fiduciary.

Many plan sponsors believe that when they utilize the services of a 3(21) investment fiduciary, they’re no longer responsible for their plan. But they’re wrong. If you’re using the services of a 3(21) service provider, you’re still the investment fiduciary for your plan. And you’re the one who is primarily responsible for the plan’s investments. ERISA 3(21) arrangements do not transfer any liability from you to your advisor.

An ERISA 3(38) advisor, on the other hand, becomes not only the investment manager of the plan but also assumes the fiduciary responsibility from you.

So if you want to free yourself of the burden and stress of being culpable for your plan, you need a 3(38) advisor. At Anchor Bay we are a 3(38) investment fiduciary, and we’re happy to help take the responsibility off of your shoulders. After all, we know you’ve got better things to worry about – like running your business.

DEFINITION OF AN INVESTMENT FIDUCIARY

Someone who is managing the assets of another person and stands in a special relationship of trust, confidence and legal responsibility.