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Co-Fiduciary to Your Qualified Retirement Plan


Increasingly, participants in qualified retirement plans want customized investment options and advice. While smaller plan sponsors may let plan participants self-direct their investments, self-direction without appropriate guidance invites other problems.

The Pension Protection Act of 2006 permitted a wider range of investment options within qualified plans. Businesses may now arrange to have a third party serve as a 3(21) fiduciary at the participant level under an eligible investment advice arrangement. This way, plan participants can choose to receive professional investment advice about their investment options.

Having a 3(21) fiduciary in place mitigates potential liability for other plan co-fiduciaries. It gives participants a chance to customize investment choices with a third-party money manager and relationship manager as the adviser. The 3(21) fiduciary can also offer the business non-discretionary recommendations about the selection, replacement and monitoring of investments in the plan.

Hiring a co-fiduciary for your plan may be the smartest move you can make. It may promote greater participation, a better participant understanding of the plan’s investment options and their potential and even easier plan administration.

How much does your plan actually cost? How well do your employees understand their investment choices? If you can’t confidently answer these questions, you may want to seek the advice of an experience investment professional.

Financial Plan | Personalized Report | Financial Advisor - Minneapolis

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