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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Reconciling the Duty to Diversify

Diversification

When is the trust capital adequately diversified? Is owning five single family houses in Long Beach, California diversified? Is owning one index mutual fund that holds over 1,000 securities diversified? And what is the trustee to do if the asset that originally funded the trust was NOT diversified?

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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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