Under ERISA fiduciaries have the following duties: loyalty, diversification, incur only reasonable costs, monitor investments and avoid prohibited transactions. They can, and will, be held accountable for their actions. A breach of fiduciary duties could result in personal liability.
Thus, fiduciaries should become procedurally prudent.
Plan Sponsors or Investment Committees may hire a prudent expert to serve as a co-fiduciary and assist in fulfilling fiduciary responsibilities.
Retirement Advisors will serve as a 3(21) or 3(38) plan fiduciary.
ERISA requires that plan fiduciaries establish a prudent investment selection and monitoring process This should be reduced to writing in the form of an Investment Policy Statement.
Fiduciaries need to construct an appropriate investment menu that allows participants the opportunity to create the appropriate asset allocation, given their tolerance for risk, to meet their individual goals and objectives.
Periodic comprehensive analytical reviews of the investments should be completed, in accordance with the Investment Policy Statement, and documented.
Retirement Advisors will help fiduciaries become procedurally prudent.
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