# Caution: 3 ERISA "Traps"

Calculating the amount of ERISA-qualifying assets a fund holds might at face value seem like a simple proposition, but it can actually become quite complicated quickly (which is why many managers simply seek to avoid going near the 25% threshold to keep things straightforward).

Below are three major, potential complexities that a manager should be aware of:

* \#1 - Blending non-ERISA and ERISA BPI assets
* \#2 - Underlying BPI % of entity investors
* \#3 - Effects of redemptions/withdrawals on ERISA ratio

## More on Complexity #1: Blending non-ERISA and ERISA BPI assets

As previously described, some managers aim to take on BPI assets in a given fund, but only those which are non-ERISA-qualifying.  In theory, such a fund could take on well in excess of 25% of its assets from BPIs. 

However, there is a risk to such a fund that a manager must keenly watch - if it takes on *any* ERISA-qualifying BPI assets, then *all the non-ERISA BPI assets are suddenly counted towards the threshold.*

Let's put that in a clear example:

* One Ring Capital has $10,000,000, and 40% of its assets are from IRA plans.  While that's 40% BPI, it's all non-ERISA qualifying BPI assets, so the fund manager is in the clear.  Yay!
  * One Ring Capital accepts a new subscriber for a small amount, say, $250,000.  That $250,000 is from an ERISA plan.
  * That's just $250,000 of $10,250,000, or around 2%, right?  *Wrong.*
    * Because One Ring Capital has *any amount* of ERISA-qualifying assets, now all the other BPI assets are counted towards the threshold.  
  * One Ring Capital suddenly has $4,250,000 out of $10,250,000 (\~40%) as far as the 25% ERISA threshold calculation is concerned.  Uh oh...

Many managers are unaware of this reclassification of BPI assets and, as you can see, sometimes end up with a nasty surprise.

##


---

# Agent Instructions: Querying This Documentation

If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter:

```
GET https://docs.repool.com/fund-manager-essentials/about-investor-types/benefit-plan-investors/caution-3-erisa-traps.md?ask=<question>
```

The question should be specific, self-contained, and written in natural language.
The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.