Prudent Procedures for ERISA Fiduciaries

C

These procedures are stipulated under the detailing of ERISA fiduciary duties, to ensure that the fiduciary complies with the duty to act with prudence.

ERISA (Employee Retirement Income Security Act) is a federal law in the United States that sets standards for retirement plans offered by employers. ERISA fiduciaries are individuals or entities responsible for managing and administering these retirement plans on behalf of the plan participants and beneficiaries. Fiduciaries have a legal obligation to act in the best interests of the plan participants and beneficiaries and must adhere to certain prudent procedures.

The question asks about the prudent procedures that ERISA fiduciaries must follow. Let's examine each answer choice and its suitability:

A. Supervisory: This answer choice refers to establishing a supervisory investment policy for the plan. While it's important for fiduciaries to oversee the plan and its investments, this answer choice does not accurately capture the requirement. The fiduciaries are responsible for establishing an investment policy, not just supervising it. Therefore, this answer choice is incorrect.

B. None of these answers: This option suggests that none of the provided answer choices are correct. However, it is unlikely that this would be the correct answer, as there should be a suitable option among the choices provided.

C. Written: This answer choice states that ERISA fiduciaries must establish a written investment policy for the plan. This is the correct answer. ERISA requires fiduciaries to establish a written investment policy that outlines the guidelines, objectives, and procedures for managing the plan's investments. Having a written policy helps ensure transparency, consistency, and accountability in the investment decision-making process.

D. Diversified: While diversifying plan assets is indeed one of the prudent procedures that ERISA fiduciaries must follow, it is not the answer to the question regarding the establishment of an investment policy. Diversification refers to spreading investments across different asset classes to manage risk. However, it is not the only requirement for ERISA fiduciaries, and the question specifically asks about establishing an investment policy. Therefore, this answer choice is incorrect.

In conclusion, the correct answer is C. written, as ERISA fiduciaries must establish a written investment policy for the plan.