Thursday, September 21, 2006

Fiduciary Investment Issues in 401(k) Plans

This article from IFEBP reviews a fiduciary's resonsibilities relating to defined contribution (DC) plan investments, mitigating fiduciary liability for investment performance, and investment fees.
"DC plan trustees can limit their potential liability by prudently investigating and evaluating potential plan investments, and by documenting the facts and reasoning that led to the decisions. Finally, DC plan trustees should investigate potential undisclosed fees and expenses that may be charged by their investment advisors. Trustees can further reduce their potential fiduciary liability by relying on the advice of an investment consultant and by structuring the plan to allow participant-directed investments in compliance with DOL regulations. After an investment decision is made, the trustees have a continuing fiduciary duty to monitor vendors and investments."

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