Introduction

Welcome to ERISA Issues, the federal rules under the Employee Retirement Income Security Act (ERISA) that govern how private-sector retirement plans must be managed and who bears responsibility when things go wrong.

Exam Weight: Part of 30 questions

What You'll Learn

In this unit, you'll cover:

• Fiduciary Issues: Who qualifies as an ERISA fiduciary, the four core duties (loyalty, prudence, diversification, plan compliance), and the "prudent expert" standard
• ERISA Section 404(c): The safe harbor that shields fiduciaries from liability when participants direct their own investments, and its limits
• Investment Policy Statement (IPS): The written framework for plan investment decisions. Not legally required, but critical for demonstrating prudence
• Prohibited Transactions: Transactions between plans and "parties in interest" that ERISA forbids, plus the penalties for violations

Why This Matters

ERISA is one of the most heavily tested federal laws on the Series 66 because it sits at the intersection of fiduciary duty and retirement plan management. Key reasons it matters:

• As an investment adviser representative, you will work with employer-sponsored plans
• You need to understand who is a fiduciary, what they can and cannot do, and how to protect both the plan and yourself from liability
• The exam loves to test the boundaries, especially the difference between what 404(c) protects and what it does not

Let's start with the foundation: who counts as an ERISA fiduciary and what duties they owe.