Certified Plan Sponsor Professional (CPSP) Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the Certified Plan Sponsor Professional Exam. Use flashcards and multiple choice questions with full explanations. Achieve exam success!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

Does hiring an ERISA Sec. 3(38) investment manager completely relieve the plan sponsor of fiduciary duties?

True
False
Only for monitoring investments
Only for selecting investments

The correct answer is: True

Hiring an ERISA Section 3(38) investment manager does not completely relieve the plan sponsor of fiduciary duties. While a 3(38) investment manager assumes significant responsibilities related to the selection and management of investments, the plan sponsor still retains certain fiduciary responsibilities. For instance, the plan sponsor must ensure that they select a qualified and competent investment manager and that they periodically review the manager's performance and adherence to the investment policy. The plan sponsor must also oversee the overall operation of the plan to ensure compliance with ERISA and other applicable laws. Thus, the statement that hiring a 3(38) investment manager completely relieves the plan sponsor of fiduciary duties is incorrect. Instead, it is more accurate to understand that this hiring delegates specific investment responsibilities, but other fiduciary obligations remain with the plan sponsor.