Investment Governance Blog

Diversification

Reconciling the Duty to Diversify

The Duty “In making and implementing investment decisions, the trustee has a duty to diversify the investments of the trust unless, under the circumstances, it is prudent not to do...
Pirate

ERISA §1104(a)(1)(A)(ii) re Duty to Incur Reasonable Fees

It is fundamental to a trustee’s duties to ensure that expenses incurred by the plan are fair and reasonable. However, when a plan is using one vendor to provide a...
Funds Greatest Risk

An ERISA Trustee’s Duty of Loyalty

It’s hard to be an ERISA trustee. Many plan trustees have other pressing corporate responsibilities and few have the time or experience to become fiduciary governance experts. But fiduciary governance...
prudent administration for a trustee

UPIA §2(c)(6) re Other Resources of the Beneficiary

The Conundrum: Question: Should the investment policy and distribution rate from a trust be informed by assets held by the beneficiary that are outside the trustee’s responsibility or control?   Predictably...
Diversification

ERISA §1104(a)(1)(C) re Diversification

US Code §1104(a)(1)(C) states, “A fiduciary shall discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries… by diversifying the investments of the...
trustee duty to balance risk and return

ERISA §404(a)(1)(B) re Duty to Balance Risk and Return

Trustees are required to make hard investment decisions. They are to take into consideration the risk of loss and the opportunity for gain associated with each particular investment or investment...
Duty to Balance Risk and Return

UPIA §2(b) re Duty to Balance Risk and Return

The preamble to the Uniform Prudent Investor Act notes, “The tradeoff in all investing between risk and return is identified as the fiduciary's central consideration.” For most trustees determining the...
prudent delegation of investment duties

UPIA §9 re Prudent Delegation of Investment Duties

Many trustees implicitly trust the investment manager to whom investment duties have been delegated. They trust that the manager’s strategy is reasonable. They trust that the return the manager produced...
Duty to Pay Only Fair Fees

UPIA §7 re Duty to Pay Only Fair Fees

“Wasting beneficiaries' money is imprudent. In devising and implementing strategies for the investment and management of trust assets, trustees are obliged to minimize costs” (National Conference of Commissioners on Uniform...