Certified Plan Sponsor Professional (CPSP) Practice Exam

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What is the role of an ERISA 3(38) Investment Manager?

To monitor compliance with tax laws
To manage, acquire, or dispose of plan assets
To handle employee enrollment issues
To resolve participant complaints

The correct answer is: To manage, acquire, or dispose of plan assets

The role of an ERISA 3(38) Investment Manager is primarily to manage, acquire, or dispose of plan assets on behalf of a retirement plan. This designation refers to a fiduciary who has the authority to make investment decisions and is responsible for the investment performance of the plan, ensuring that the investment choices align with the plan’s objectives and participant interests. This responsibility includes not only making decisions about which assets to invest in but also rebalancing the portfolio as necessary to maintain alignment with the plan’s investment strategy. The 3(38) Investment Manager is expected to use their expertise to evaluate investment options, monitor performance, and make prudent investment choices to enhance the plan's financial health. While other roles within a retirement plan, such as monitoring compliance with laws or resolving participant complaints, are important to the overall functioning of the plan, these tasks do not fall under the purview of an ERISA 3(38) Investment Manager, who is solely focused on the investment aspect.