Page 54 - DCAC December 2024 Files
P. 54
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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