Pension funds are a potentially huge source of capital for hedge fund managers.  However, accepting investments from pension plans governed by the Employee Retirement Income Security Act of 1974 (ERISA) is not without significant risks and drawbacks.  Of greatest concern to a hedge fund manager is that a fund will be deemed a “plan asset fund,” thereby making the manager an ERISA fiduciary and subjecting the fund to ERISA’s strict regulatory regime.  A recent PracticeEdge Session presented by the Regulatory Compliance Association provided an overview of the ERISA regime, with emphasis on when investment funds become subject to the ERISA regime, the consequences of being subject to that regime, the duties of ERISA fiduciaries and certain proposed or pending regulatory changes.  This article summarizes that session.  See also “What Should Hedge Fund Managers Expect When ERISA Plans Conduct Due Diligence on and Negotiate for Investments in Their Funds?,” Hedge Fund Law Report, Vol. 6, No. 25 (Jun. 20, 2013); “How Can Hedge Fund Managers Managing Plan Asset Funds Comply with the QPAM and INHAM Exemption Requirements?,” Hedge Fund Law Report, Vol. 6, No. 38 (Oct. 3, 2013).