The advantages of a 3(21) fiduciary

As a company that’s focused on successful corporate retirement plans, Plexus Financial Services is a 3(21) investment co-fiduciary for our clients.So what is a 3(21) fiduciary? The Employee Retirement Act Income Security Act of 1974 (ERISA) sets out three guidelines. A fiduciary, per ERISA:

• … “exercises any discretionary authority or discretionary control respecting management of such plan or exercises any authority or control respecting management or disposition of its assets.) • … “renders investment advice for a fee or other compensation, direct or indirect, with respect to any moneys or other property of such plan, or has any authority or responsibility to do so, or • “. . . has any discretionary authority or discretionary responsibility in the administration of such plan.”

In short, the law provides for a 3(21) fiduciary to carry risk just like a retirement sponsor does, and that is a very important distinction. Furthermore, a co-fiduciary isn’t tied to picking a particular fund; the focus must be on analyzing the best investment options for the plan participants. And because they must have a plan’s best interest in mind, fee transparency is a must for 3(21) fiduciaries. This is a very important point to consider, because hidden fees have cost taxpayers billions of dollars every year, per White House data.

For more information on the benefits of having a 3(21) fiduciary, or for any insurance-related questions, contact Plexus Financial Services at 847-307-6222, or visit their website at

Securities and advisory services offered through Plexus Financial Services LLC, member FINRA/ SIPC, a registered investment adviser.

References Aven Gladych, Paula. “3(21) fiduciaries more popular among plan sponsors,”, November 9, 2011.

Fact Sheet: Middle Class Economics: Strengthening Retirement Security by Cracking Down on Backdoor Payments and Hidden Fees." The White House, Statements and Releases, February 23, 2015.