Investment Management & Oversight (IM&O)

Sponsoring a workplace retirement savings plan is often done with the best of intentions, including the employers desire to assist individual employees with saving for their own personalized retirement income needs.  Unfortunately, most business owners and/or executives are largely unaware of the obligations ERISA places upon them as fiduciaries to such plans.

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)

Fortunately, by engaging Fiduciary Insight to oversee the investment selection and monitoring process, plan fiduciaries can demonstrate the plan’s investment-related decisions are being managed prudently and with the requisite expertise required to meet the obligations imposed by ERISA.  Furthermore, Fiduciary Insight will enter into a Fiduciary Advisory Agreement with the employer-plan sponsor that expressly assumes fiduciary responsibility for selecting and monitoring the plan’s investment options.  

In such engagements, the extent to which employer-plan sponsors may be shielded from prospective liability is determined by the scope of authority delegated to Fiduciary Insight:

• 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 Fiduciary Insight 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 Fiduciary Insight 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 Investment Management & Oversight service is 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.

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