Uniform Fiduciary Standards of Care
- Know standards, laws, and trust provisions.
- Diversify assets to specific risk / return profile of client.
- Prepare investment policy statement.
- Use "prudent experts" (money managers) and document due diligence.
- Control and account for investment expenses.
- Monitor the activities of "prudent experts".
- Avoid conflicts of interest and prohibited transactions.
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Procedural Prudence: Investigation and Documentation
A common theme throughout ERISA regulations is
procedural prudence. Procedural prudence is the process
fiduciaries use to make sure their decisions are in the
best interests of participants and their beneficiaries.
Note that the emphasis is on the process, the
fiduciary's research and documentation involved in
making decision, rather than on the results. Plan
fiduciaries must be able to show they properly
investigated and documented each plan fiduciary decision.
This process also applies to the selection and ongoing
monitoring of service providers and plan investments.
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Copywright 1999-2005: Center for Fiduciary Studies, a resource of Fiduciary360.