ERISA 3(38) vs ERISA 3(21)

What’s the DIFFERENCE?

ERISA 3(38) Fiduciary is the Investment Manager for your Plan. ERISA 3(21) Fiduciary is the Investment Advisor for your Plan.

  • An ERISA 3(21) Fiduciary’s responsibility is to provide investment advice, and the final decision regarding the investment selection is the Plan Sponsor’s responsibility.
  • An ERISA 3(21) Fiduciary is a good option for Plan Sponsors who are okay with sharing fiduciary responsibilities.
  • An ERISA 3(21) Fiduciary will typically draft an Investment Policy Statement. Based on the IPS, investment advisor will monitor investments and recommend changes if needed.
ERISA 3(38)ERISA 3(21)
RoleInvestment ManagerInvestment Advisor
Risk ProtectionHighModerate
Fiduciary ResponsibilityAdvisorPlan Sponsor
Investment LineupAdvisor Makes Investment DecisionsPlan Sponsor Makes Investment Decisions
Research & AnalysisYesYes
Co-Fiduciary MeetingsYesYes