What is a 401(k) Fiduciary Checklist vs. a 3(38) Fiduciary Checklist?
401(k) Fiduciary Checklist: A general checklist outlining the broad responsibilities of fiduciaries involved in a 401(k) plan. This includes selecting investments, monitoring fees, reviewing service providers, and ensuring the plan runs in the participants’ best interests.
3(38) Fiduciary Checklist: A more specialized checklist for a 3(38) investment manager. A 3(38) fiduciary has discretionary control over the plan’s investments, meaning they can select and manage the investments on behalf of the plan. Their checklist will focus on investment selection procedures, ongoing monitoring, and risk management.
All 401(k) plan fiduciaries (this can include the plan sponsor, investment advisors, administrative staff, etc.) are bound by ERISA (Employee Retirement Income Security Act) and must:
Act in the best interest of participants: Put the plan participants’ financial well-being first.
Prudence: Make decisions with the skill, care, and diligence of a prudent expert in these matters.
Loyalty: Avoid conflicts of interest and self-dealing.
Diversification: Offer a range of investment options to mitigate risk.
Monitor Fees: Ensure the fees charged to the plan are reasonable.
Yes, absolutely! A checklist can help plan sponsors meet their fiduciary duties. It helps track critical actions like fee reviews, investment performance monitoring, and documentation of decisions.
DOL Fiduciary Checklist: The Department of Labor (DOL) provides resources, including checklists, to help plan sponsors understand their responsibilities. However, it’s wise to customize a checklist specific to your plan to ensure it addresses the plan’s unique aspects.
ERISA 404(c) Compliance Checklist: This focuses on meeting ERISA Section 404(c) requirements, which can reduce the plan sponsor’s liability if participants have control over their investments. It ensures the plan offers a well-diversified investment lineup and provides participants with sufficient information to make informed choices.
Governance Checklist: A broader checklist covering overall plan operations. It includes areas like:
– Fiduciary assignment and responsibilities
– Plan documentation and compliance
– Regular committee meetings
– Recordkeeping procedures
Download Your Own Fiduciary ChecklistFor fiduciary services, choose Fort Pitt Capital Group. Our team of in-house consultants is trained in wealth management, financial planning, and investment analysis so that you can get the most personalized results as a client.
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Download Your Own Fiduciary Checklist
