- What is a ERISA 3(21) Fiduciary?
- An ERISA 3(21) fiduciary is an individual or institution obligated to provide to a plan sponsor investment advice that is in the best interests of the sponsor and plan participants. The fiduciary role is to furnish expert advice and recommendations regarding the retirement plan. Essentially, the fiduciary evaluates investments to ensure they are prudently chosen and that the financial institution providing the plan is not charging unreasonable fees. A 3(21) fiduciary does not exercise discretion, meaning the fiduciary’s role is only that of adviser. The plan sponsor retains the power to make changes in the retirement plan investments and remains legally responsible and liable.
- What are the different Retirement Plan Contribution Limits?
- Why does my Qualified Plan require a Fidelity Bond?
- ERISA’s bonding requirements are intended to protect employee benefit plans from risk of loss due to fraud or dishonesty on the part of the trustee or persons who handle plan funds or other property. The bond must cover at least 10% of the assets handled by the specific employees (or outside service providers if the employer intends that the bond cover such providers), but cannot be less than $1,000. The fidelity bond should be available through your current business insurance agent.