338 Investment Fiduciary Services
A 338 Fiduciary assumes full discretion over the selection, monitoring, and replacement of investments within a retirement plan. By taking on these responsibilities, a 338 Fiduciary minimizes the plan sponsor’s involvement and liability in day-to-day investment management.
3(21) Fiduciary Services
A 3(21) Fiduciary offers guidance and recommendations for investment decisions but leaves the final authority to the plan sponsor. This shared responsibility means the employer retains a more active role in plan management, including fiduciary liability.
Primary Differences Between 338 and 3(21) Fiduciaries
What is the primary difference between 3(21) and 338 fiduciaries?
| Aspect | 338 Fiduciary | 3(21) Fiduciary |
|---|---|---|
| Investment Authority | Full discretion over investments | Advisory role; decisions made by employer |
| Employer Liability | Minimal | Shared |
| Involvement Required | Low | High |
- Authority:
A 338 Fiduciary takes full control of investment decisions, while a 3(21) Fiduciary provides advice and guidance without direct decision-making authority. - Liability:
With a 338 Fiduciary, the plan sponsor transfers liability for investment decisions. In contrast, a 3(21) Fiduciary shares this liability with the sponsor. - Best Use Cases:
A 338 Fiduciary is ideal for sponsors seeking complete delegation, whereas a 3(21) Fiduciary suits organizations wanting collaborative oversight.
Impact on Employer Responsibilities
How does each fiduciary type affect employer responsibility?
338 Fiduciary Services
- Minimal Involvement: A 338 Fiduciary assumes full responsibility for investment decisions, allowing employers to focus on other priorities.
- Reduced Risk: Employers have little to no liability for investment decisions, significantly reducing their fiduciary risk.
3(21) Fiduciary Services
- Shared Responsibilities: Employers work closely with the fiduciary to make investment decisions, requiring ongoing involvement.
- Increased Oversight: Shared responsibility means the employer retains liability for the plan’s investments, adding compliance and oversight tasks to their workload.
Choosing the Right Fiduciary Service
Which fiduciary service is best suited for complex plans?
338 Fiduciary Services
- Best for complex or large retirement plans where compliance and investment expertise are critical.
- Ideal for employers with limited internal resources or experience in managing retirement plan investments.
3(21) Fiduciary Services
- Suitable for smaller or less complex plans where employers prefer to retain some control over investment decisions.
- Works well for organizations with in-house teams that can handle shared fiduciary responsibilities.
| Plan Complexity | 338 Fiduciary Recommended | 3(21) Fiduciary Recommended |
|---|---|---|
| High Complexity | Yes | No |
| Low Complexity | No | Yes |
| Employer Resources | Limited | Adequate |
FAQs
What is the primary difference between 3(21) and 338 fiduciaries?
The main difference lies in authority and liability. A 338 Fiduciary has full discretion over investment decisions, reducing employer involvement and liability. A 3(21) Fiduciary provides guidance, with the final decision—and associated liability—remaining with the employer.
How does each fiduciary type affect employer responsibility?
A 338 Fiduciary minimizes employer responsibility, taking on full liability for investments. In contrast, a 3(21) Fiduciary requires shared responsibility, with the employer remaining actively involved in decision-making.
Which fiduciary service is best suited for complex plans?
For complex plans, 338 Fiduciary Services are ideal due to their comprehensive management and compliance capabilities.
Choosing between 338 and 3(21) Fiduciary Services depends on the size and complexity of your retirement plan, as well as the level of involvement you want to maintain. For plan sponsors seeking professional investment management and minimal liability, 338 Fiduciary Services are the clear choice. For those who prefer collaboration and shared responsibility, 3(21) Fiduciary Services offer flexibility.
Admin316 provides both options, delivering customized fiduciary solutions to meet your needs. Contact us today to learn how we can support your organization with expert fiduciary services and help you make the best choice for your retirement plan.