| As participant account balances continue to grow and government regulators become increasingly aggressive in protecting the rights of plan participants, plan fiduciaries are lost in a maze of government rules and regulations as to their respective fiduciary duties. Indeed, as recent high profile cases have shown, the stakes are very high. Plan fiduciaries can, and will, be held accountable for either their actions, or more likely, their failure to act to protect plan participants. That fiduciary breach could result in personal liability to the plan fiduciary for investment losses suffered by plan participants.
Understanding the four pillars of fiduciary responsibility: Loyalty, Prudence, Diversification and Compliance is the first step in staying out of harm’s way.
Another important step is to hire a prudent expert to help Plan Sponsors or Investment Committees perform their duties. A prudent expert can take the form of either a) an ERISA Investment Manager for your plan, with sole fiduciary responsibility for the investments, b) a Co-Fiduciary with you to share in the fiduciary responsibility, or c) a consultant to assist you in completing your investment fiduciary duties.
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