Investment Spotlight (NEW!)

PNC Retirement Solutions® is pleased to introduce Investment Spotlight, written by Peter Ferrise, Investment Director for PNC Retirement Solutions. Published quarterly as part of Inside Vested Interest, Investment Spotlight will provide plan sponsors with the latest strategies and best practices for investments in defined contribution plans. We invite plan sponsors to review and share these actionable insights and resources. In this issue, Peter explains how fiduciaries of retirement plans can play a role in helping participants diversify their retirement assets.


About Peter Ferrise, Investment Director

As Investment Director for PNC Retirement Solutions, Peter leads the Fiduciary Investment Services for defined contribution plans. He is responsible for overseeing the construction of the approved lists of investment options made available to retirement plan sponsors as part of our 3(21) Investment Advisory Service and the design of investment lineups for plans utilizing our 3(38) Investment Management Service. In addition, Peter is responsible for the development of actionable insights for plan sponsors and participants and serving as a thought leader in the industry.

Prior to his current role, Peter served as a Senior Investment Advisor with Hawthorn, PNC Family Wealth®, where he worked with clients and third party advisers to establish investment objectives and risk parameters, to develop Investment Policy Statements, and construct and actively manage clients’ portfolios.  Prior to Hawthorn, Peter served as an Equity Strategist for PNC and then in an institutional portfolio management capacity since 1995.  Prior to joining PNC, Peter served as a Trust Investment Adviser at Bank One (now known as JP Morgan Chase).

Fiduciaries Have an Important Role in Helping Participants Diversify

By Peter Ferrise, Investment Director

One of the most important and daunting of responsibilities of a retirement plan fiduciary for a participant-directed defined contribution plan is selecting and monitoring an investment lineup that allows sufficient opportunity for the plan’s participants to diversify their retirement assets.

Why Diversification is Important

Diversification in a retirement plan is important because it can help to minimize the risk of large losses. For a participant-directed defined contribution plan, an investment fiduciary has three fundamental duties under the Employee Retirement Income Security Act of 1974, as amended (ERISA):

  1. Provide a broad range of investment options
  2. Select, monitor, remove and replace investment options
  3. Provide investment options and related services that are suitable and appropriate for the particular needs and abilities of the employees covered under the plan

With a growing risk of litigation, lack of resources, and increasing complexity in regulations, many organizations are exploring how to better manage their retirement plan’s investment lineup, control risk, and keep costs down.

Carefully Weigh the Pros and Cons for Outsourcing Investment Decisions

  • Organizations can outsource investment decisions for the retirement plan but this requires a careful evaluation of the pros and cons:
  • While a plan sponsor cannot subcontract out all of his or her responsibilities, relying on a third-party investment adviser or manager to help fulfill them may help mitigate the risk that comes with a lack of deep knowledge of the issues a fiduciary confronts.
  • Outsourcing does not eliminate all potential liability for the plan sponsor. The responsibility for the prudent selection and monitoring of the investment adviser or manager will remain with the plan sponsor.

With resources at a premium, some plan sponsors choose to outsource activities related to selection and monitoring of investments to either a nondiscretionary 3(21) investment adviser or to a discretionary 3(38) investment manager.  When deciding between these two alternatives, a plan sponsor may want to view the decision in the framework of three important factors: resources, rule, and risk.

When hiring an investment adviser or manager, a plan fiduciary should investigate the adviser or manager’s qualifications, provide them with complete and accurate information about the plan, and confirm that reliance on the adviser or manager’s advice is reasonably justified under the circumstances.

Plan fiduciaries also should obtain, in writing, an acknowledgment from the outside adviser or manager that they recognize their fiduciary status, too.

PNC Retirement Solutions’ 3(21) Investment Advisory Service is included in our Vested Interest® bundle of defined contribution plan services for plan sponsors who enter into an Investment Advisory Agreement. 3(38) Investment Management Services are available for an additional fee. If you have questions about outsourcing investment selection and monitoring for your plan, please reach out to your Relationship Manager. 


Deciding Between a 3(21) Advisory Service and 3(38) Investment Management Service

PNC’s Fiduciary Investment Services

Roles and Responsibilities of a Fiduciary  

Peter Ferrise
Investment Director

Inside Vested Interest®

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Important Legal Disclosures and Information

The material presented in this newsletter is of a general nature and does not constitute the provision by PNC of investment, legal, tax, or accounting advice to any person, or a recommendation to buy or sell any security or adopt any investment strategy. Opinions expressed herein are subject to change without notice. The information was obtained from sources deemed reliable. Such information is not guaranteed as to its accuracy.

The PNC Financial Services Group, Inc. (“PNC”) uses the marketing name PNC Institutional Asset Management® for the various discretionary and non-discretionary institutional investment activities conducted through PNC Bank, National Association (“PNC Bank), which is a Member FDIC, and through PNC’s subsidiary PNC Capital Advisors, LLC, a registered investment adviser (“PNC Capital Advisors”). PNC Bank uses the marketing names PNC Retirement Solutions® and Vested Interest® to provide defined contribution plan services and PNC Institutional Advisory Solutions® to provide discretionary investment management, trustee, and other related services. Standalone custody, escrow, and directed trustee services; FDIC-insured banking products and services; and lending of funds are also provided through PNC Bank. PNC does not provide legal, tax, or accounting advice unless, with respect to tax advice, PNC Bank has entered into a written tax services agreement. PNC does not provide services in any jurisdiction in which it is not authorized to conduct business. PNC Bank is not registered as a municipal advisor under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Act”). Investment management and related products and services provided to a “municipal entity” or “obligated person” regarding “proceeds of municipal securities” (as such terms are defined in the Act) will be provided by PNC Capital Advisors.

“Vested Interest,” “PNC Institutional Asset Management,” “PNC Retirement Solutions,” and “PNC Institutional Advisory Solutions” are registered service marks of The PNC Financial Services Group, Inc.

Investments: Not FDIC Insured. No Bank Guarantee. May Lose Value.