ERISA Benefit Plan Investment Management Agreements: Selecting 3(38) Investment Managers, Structuring the IMA

Documenting the Relationship to Minimize Risks for Plan Sponsors and Investment Advisors

Recording of a 90-minute CLE webinar with Q&A


Conducted on Tuesday, April 16, 2019

Recorded event now available

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Program Materials

This CLE webinar will explain best practices for selecting a 3(38)-investment manager and outline key steps in structuring and documenting the investment manager relationship. Our panel will review how best to negotiate and draft investment management agreements (IMAs) and what terms to look for when a plan invests in a pooled investment vehicle subject to ERISA.

Description

ERISA requires plan fiduciaries act with prudence and care; breaching of these fiduciary duties subject plan fiduciaries to personal liability. ERISA Section 3(38) defines an investment manager to whom investment responsibility can be delegated. A named fiduciary who has delegated investment decisions to a 3(38)-investment manager is not responsible or liable for the 3(38)-investment manger’s investment decisions but remains responsible for hiring and monitoring the 3(38)-investment manager.

ERISA also imposes the duty to avoid “prohibited transactions” with "parties in interest" to the ERISA plan, unless an exemption, such as QPAM, exists. Because ERISA defines both prohibited transactions and parties in interest broadly, all transactions are potentially prohibited requiring an applicable exemption. However, the exemptions are nuanced, and fiduciaries appointing 3(38)-investment managers, as well as the 3(38)-investment manager taking advantage of the exception, must understand the conditions of the exemption upon which they are relying.

Listen as our authoritative panel of attorneys discusses ERISA 3(38) investment managers and offers guidelines for selecting investment managers, negotiating and drafting IMAs, and documenting the investment manager partnership from perspectives of both the plan sponsor and the investment manager.

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Outline

  1. Negotiating investment management agreements
  2. Drafting investment management agreements
  3. Documenting the investment management partnership

Benefits

The panel will review these and other key issues:

  • What standard of care should plans expect from an investment manager?
  • What representations and warranties should an IMA include?
  • What protections can side letters offer?
  • What types of investment strategies may warrant the use of an exemption other than PTE 84-14 (“QPAM”)?

Faculty

Nham, Mayoung
Mayoung Nham

Principal
Slevin & Hart

Ms. Nham has been working with defined benefit and defined contribution pension plans, health and welfare plans, and...  |  Read More

Ryan, S. John
S. John Ryan

Partner
Seward & Kissell

Mr. Ryan advises a variety of clients — publicly and closely held corporations, partnerships, governmental...  |  Read More

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