Page 169 - NovDefComp

Understanding Fiduciary Responsibilities

Plan Fiduciary Requirements

• Duty of Loyalty: Act solely in the best interest of plan participants (and beneficiaries)

• Duty of Prudence: Establish a prudent process for selecting & monitoring investments

– Carefully evaluate, select, and monitor service providers

– Should have established expertise, track record, processes, and reputation

– Not a reasonable defense to simply trust that your provider did their job appropriately

• Duty to Diversify: Offer diverse array of investment options to help participants minimize large

losses.

• Duty to Follow Plan Documents: Discharge fiduciary duties in accordance with the documents

and instruments governing the plan.

• Ensure that fees paid to service providers and other expenses of the plan are reasonable in

light of the level and quality of services provided

• Avoid prohibited transactions

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