ERISA Fiduciary Responsibilities

ERISA Fiduciary Responsibilities

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Question

ERISA fiduciaries must adhere to the following prudent procedures:

- establish a written investment policy for the plan - diversify plan assets

- make investment decisions with the skill and care of a prudent expert

- monitor investment performance

- control investment expenses

- avoid ________ transactions

Answers

Explanations

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A. B. C. D. E.

Explanation

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

ERISA fiduciary duty allows for a fairly broad range of investments, it does prohibit certain transactions. An ERISA fiduciary can never: - deal with plan assets in his or her own interest or for his or her own account (self-dealing); - act in a transaction involving the plan on behalf of a party with interest adverse to the plan

(conflict of interest); - receive any compensation for his or her own personal account from any party dealing with the plan in connection with a transaction involving plan assets (kickbacks).

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