ERS is an investment management firm registered as an investment adviser with the SEC since 2013. ERS
provides investment management and investment advisory services to retirement plan sponsors (“Plan
Sponsors”) for use with the Plan Sponsors’ employer-sponsored benefit plans (each a “Plan”). As of December
31, 2023, ERS had $14.3 billion in discretionary assets under management (“AUM”) across over 4,900 plans.
ERS is a wholly owned subsidiary of its parent company, Envestnet, Inc. (NYSE: ENV), a publicly held company.
The Programs
Plan Sponsor Fiduciary Services
ERS provides certain services to Plans, including 401(k), 403(b), 457, and 401(a) Plans, Profit Sharing Plans,
VEBAs, Defined Benefit Pension Plans, Cash Balance Plans, and HSA Plans. When acting as a fiduciary, ERS acts
in accordance with the Investment Advisers Act of 1940, as amended (“Advisers Act”) and for Plans subject to
the Employee Retirement Income Security Act of 1974, as amended, (“ERISA”), ERS will act as either a 3(21)
non-discretionary advisor or a 3(38) investment manager. In providing Plan Sponsor Services, ERS acts with
the care, skill, prudence, and diligence that a prudent person, acting in the same capacity and with the same
information, in a similar situation would utilize. For Plans not subject to ERISA, ERS will act to the standard of
ERISA.
Plan Sponsors are able to select from a variety of services within the Program. Within the Program, ERS
provides the responsible Plan fiduciary with an investment policy statement (“IPS”) template. The goal of the
IPS is to define processes and metrics used to evaluate the menu of investments which allows for the
construction of diversified portfolios. ERS will review a Plan’s current investment alternatives using
quantitative and qualitative analysis on a quarterly basis in order to determine the appropriateness of a Plan’s
investment options. ERS will provide a quarterly communication to the Plan Sponsor confirming that the Plan
investment option review resulted in either (1) a recommendation to maintain the existing Plan investment
options, or (2) a recommendation (when acting as a non-discretionary fiduciary) or a change instruction (when
acting as a discretionary manager) to replace one or more of the Plan investment options with an alternative
investment.
Discretionary Fiduciary Services
In the “Discretionary Fiduciary Services” ERS acts as an “investment manager” (as defined in Section
3(38) of ERISA for Plans subject to ERISA) with respect to the performance of discretionary fiduciary
services. In the Discretionary Fiduciary Services, ERS reviews the investment options available
through a Plan and notifies the Plan’s recordkeeper of its instructions to add, remove and/or replace
specific “core” investment options offered to Plan participants, according to the criteria set forth in the
IPS. ERS retains final decision-making authority with respect to removing and/or replacing
investments in the core lineup, and communicates instructions to the appropriate third-party,
including the Plan’s recordkeeper, custodian, and/or third-party administrator to facilitate investment
changes.
Non‐Discretionary Fiduciary Services
In the “Non-Discretionary Fiduciary Services,” ERS acts as a fiduciary “investment adviser” as defined
in Section 3(21) of ERISA. Unlike the Discretionary Fiduciary Services, in the Non-Discretionary
Fiduciary Services, the Plan Sponsor has responsibility for the final decision-making authority with
respect to removing and/or replacing Plan investments. ERS does not have any responsibility to
communicate instructions to any third-party, including the Plan’s recordkeeper, custodian, and/or
third-party administrator.
Custom Asset Allocation Services
Plan Sponsors can also elect for ERS to provide diversified asset allocated portfolios. If selected, ERS
acts as an “investment manager” (as defined in Section 3(38) of ERISA for Plans subject to ERISA) with
respect to the construction and performance of the portfolios. ERS constructs portfolios based on the
funds available to the Plan on the recordkeeping or custodial system and is not responsible for advising
on the funds available within the Plan unless ERS has been retained by the Plan Sponsor to provide
Discretionary Fiduciary Services.
ERS retains final decision-making authority with respect to asset allocations of the portfolios and will
make adjustments when necessary. The Plan Sponsor is relieved of any responsibility to communicate
instructions to any third-party, including the Plan’s recordkeeper, custodian and/or third-party
administrator.
ERS RIA to RIA Fiduciary Services
In providing the ERS RIA to RIA Fiduciary Services, ERS acts as a fiduciary and offers “investment
advice” as defined in Section 3(21) of ERISA to other registered investment advisers (“RIAs”) through
fund line-up recommendations. The RIA and/or Plan Sponsor has responsibility for the final decision-
making authority with respect to removing and/or replacing Plan investments. ERS does not have any
responsibility to communicate instructions to the Plan Sponsor or any third-party; ERS shall be limited
to providing investment recommendations to the RIA.
Limitations to Plan Sponsor Services
ERS does not make recommendations for the
use of any specific recordkeeper but will provide
information regarding the recordkeepers that ERS has established relationships. ERS is limited to the
investment options available through the Plan recordkeeper’s platform and does not have the
authority, expectation, or obligation to select any investment options that are not available through
the Plan recordkeeper’s platform. The Plan Sponsor is solely responsible for determining the
selection of the recordkeeper and for the share classes available to the Plan. ERS does not act as, nor
has ERS agreed to assume the duties of, a trustee or the “Plan Administrator,” as defined by ERISA.
ERS has no discretion to interpret the Plan documents, to determine eligibility or participation under
the Plan, to provide participant disclosures or communications, to ensure contributions are timely
received by the Plan, or to monitor overall fees of the Plan or exercise any other action with respect to
the management, administration, or any other aspect of the Plan.
ERS does not provide advisory services related to the following types of assets: employer securities
(including derivatives of such); real estate (except for real estate funds and publicly traded REITs);
self-directed brokerage accounts; participant loans; non-publicly traded partnership interests; other
non-traded securities (other than mutual funds, collective investment trusts and similar vehicles); or
other hard-to-value securities or assets.
Plan Participant Fiduciary Services
ERS offers plan participants services in conjunction with recordkeeping services offered to Plans from
Empower Annuity Insurance Company of America (“Empower”). If selected by the Plan Sponsor, a plan
participant may receive advisory services from ERS through a one-time, non-discretionary recommendation
(“Online Advice”) or through actively managed, personalized investment portfolios (the “Managed Account
Service”).
Online Advice
Online Advice is a one-time, non-discretionary recommendation of a personalized investment
portfolio. The recommended investment portfolio is based on information drawn from the plan
participant’s account profile. ERS’s non-discretionary recommendation is confined to an allocated
portfolio composed of collective investment trusts that are sub-advised by ERS (“ERS CITs”). ERS does
not charge a fee in connection with the Online Advice.
Managed Account Service
A Plan Sponsor may also select to have ERS provide the Managed Accounts Service to plan participants.
Through the service, ERS provides an actively managed, personalized investment portfolio composed
of ERS CITs that reflects a participant’s retirement timeframe, life stages and overall financial picture.
ERS does not provide advice for, recommend allocations of, or manage assets held outside a
participant’s account. Under the Managed Account Service, ERS has discretionary authority over
allocating your assets among the ERS CITs without your prior approval of each transaction. ERS’s
Managed Account Services are confined to an allocated investment portfolio composed of ERS CITs.
ERS does not provide advice for, or recommend allocations of, self-directed brokerage accounts,
employer-directed monies, or any other investment options, even if they are available for investment
in the plan. Upon commencing the Managed Account Service, a participant’s balances in any of these
investments may be liquidated, subject to the participant’s Plan restrictions. ERS has retain Empower
Advisory Group, LLC (“EAG”), a registered investment adviser and wholly owned subsidiary of
Empower Annuity Insurance Company of America to act as a subadvisor for the Managed Account
Service.
Plan Sponsors currently only make the ERS Managed Account Service available as an opt-out feature,
meaning that a participant is automatically enrolled in the Managed Account Service at the age
established by the Plan Sponsor unless the participant affirmatively opt-outs of the Managed Account
Service. A participant may also elect to opt-in prior to the designated age. The Managed Account
Service is geared toward participants who wish to have an investment professional select and manage
their retirement accounts for them. Please refer to Item 5 below for information about fees charged
for the Managed Account Service.
Sub‐Advisory Investment Management Services
Collective Investment Trusts
ERS provides sub-advisory investment management services (including but not limited to asset
allocation, and capital market assumptions) to certain Collective Investment Trusts (“CITs”). These
CITs are sponsored by unaffiliated trust companies and are exempt from registration under the
Investment Company Act of 1940, as amended. ERS has been hired by the trust companies to select
the underlying constituents within the CITs, and for ongoing management. ERS does not directly offer
CITs; these products are available to the Plans through the unaffiliated trust companies. For
information regarding a CIT that utilizes ERS as a subadvisor please consult the offering documents
and/or disclosure documents for the CIT in question. Access to CITs is limited to certain qualified
individuals and organizations. ERS does not receive a fee for its sub-advisory management services to
CITs.
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