ERISA Trustees

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

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 plan so as to minimize the risk of large losses…” The court in Marshall v. Glass/Metal (D. Haw. 1980) noted, “Ordinarily the fiduciary should not…

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Johnny Depp v. TMG: What are a business manager's duties of care?

business manager's duties of care

The Question: What standard of care and what attendant duties does a business manager owe to their client? The Answer: It depends on what roles and services the business manager fulfills for their client. A good argument can be made that the business manager owes a similar fiduciary standard of care to their clients as…

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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 bundled solution representing various services, determining whether the plan is paying “fair fees” is difficult. But just because it is hard does not mean it…

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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 need not be a complicated subject. Good fiduciary governance, whether done for a massive $10 billion pension plan or a small 401k with a couple…

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

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 plan so as to minimize the risk of large losses…” The court in Marshall v. Glass/Metal (D. Haw. 1980) noted, “Ordinarily the fiduciary should not…

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

trustee 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 course of action. ERISA trustees are required to balance the risk and return of each investment decision under conditions of uncertainty. Because ERISA trustees do…

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