Certified Plan Sponsor Professional (CPSP) Practice Exam

What is included in the scope of an ERISA Sec. 3(38) investment manager services?

1. Selection, monitoring and managing plan investment

2. Providing legal advice on regulatory compliance

3. Conducting employee training

4. Implementing marketing strategies for funds

The correct answer is: Selection, monitoring and managing plan investment

The scope of an ERISA Section 3(38) investment manager services encompasses selection, monitoring, and managing plan investments. This designation allows the investment manager to have discretionary authority over the assets of the plan, meaning they can make investment decisions without requiring prior approval from the plan sponsor. The inclusion of these responsibilities means that the investment manager is tasked with the critical functions of evaluating investment options available in the marketplace, ongoing assessment of investment performance, and making adjustments or reallocations as necessary to meet the goals and objectives of the retirement plan. The 3(38) investment manager bears a fiduciary responsibility to act in the best interest of the participants and beneficiaries, ensuring that investment decisions align with the plan's objectives and regulatory requirements. The other options focus on aspects of plan management and support outside the direct investment management scope defined by ERISA. For instance, providing legal advice on regulatory compliance relates to legal or compliance services rather than investment management. Similarly, conducting employee training focuses on educating participants about the plan rather than managing its investments, and implementing marketing strategies for funds pertains to marketing efforts rather than the fiduciary responsibilities of managing plan assets.