Press Release
Source: Plansponsor
Press Release
Press Contacts: Erik Cummins, Matt Hyams, Taina Rosa, Olivia Meyer
10.28.25
Under the Employee Retirement Income Security Act (ERISA), employers sponsoring retirement plans bear the duties of prudence and loyalty toward plan participants, which can leave them vulnerable to litigation. By hiring a 3(38) investment manager—a fiduciary that assumes discretion over investment selection and monitoring—plan sponsors can meaningfully reduce, but not eliminate, their exposure to claims tied to investment performance or prudence.
“When I started in this industry over a quarter century ago, everyone worried about participation levels,” Pillsbury partner Mark Jones told Plansponsor. “Now, committees are taking a much more defensive posture. Litigation risk has become a guiding factor in plan design in a way it never was before.”
“If you retain a fiduciary that expressly assumes investment manager status under 3(38), then it is an effective shift of a significant portion of your fiduciary responsibility,” Jones said. “Other arrangements like 3(21) just spread the liability around without taking it off anyone’s shoulders.”
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