ERISA Fiduciary Duties

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. Under

ERISA, the fiduciary is held to a higher standard than the Prudent Man Rule. The ERISA fiduciary needs to be as prudent as the average expert, not simply as prudent as the average person.

ERISA (Employee Retirement Income Security Act) fiduciaries are individuals or entities responsible for managing and overseeing retirement plans, such as pension plans, for the benefit of plan participants and beneficiaries. These fiduciaries have certain responsibilities and obligations outlined in ERISA to ensure they act in the best interests of the plan participants.

Regarding the question, the correct answer is C. prudent expert. ERISA fiduciaries are required to make investment decisions with the skill and care of a prudent expert. Let's break down each answer choice to understand why C is the correct one:

A. Member: This answer choice is incorrect because it does not capture the level of expertise and care required of ERISA fiduciaries. Being a member of the plan or a committee alone does not necessarily imply the necessary knowledge and expertise to make informed investment decisions.

B. Supervisor: This answer choice is also incorrect. While ERISA fiduciaries may have oversight responsibilities, such as supervising investment managers or service providers, the question is specifically referring to the fiduciary's responsibility in making investment decisions.

C. Prudent expert: This is the correct answer. ERISA fiduciaries are expected to exercise the same level of skill, care, and diligence that a prudent expert would apply in similar circumstances. This means that fiduciaries are held to a high standard and are expected to have expertise in investment matters or seek professional advice when needed.

D. None of these answers: This answer choice is incorrect because the previous options do include the correct answer, "prudent expert."

E. Trader: This answer choice is incorrect because ERISA fiduciaries are not required to make investment decisions with the skills of a trader. While trading skills may be valuable in certain investment strategies, ERISA fiduciaries are expected to consider a broader range of factors and make decisions in line with the best interests of the plan participants.

In summary, ERISA fiduciaries must make investment decisions with the skill and care of a prudent expert. This ensures that they act in the best interests of the plan participants, adhering to their fiduciary duty and the guidelines set forth in ERISA.