FINC322 Lecture 20: Fiduciary Responsability
Document Summary
Retirement plans subject to erisa: established and maintained by an employer for the benefit of the employees, results in the deferral of income by the employees. Retirement plans subject to erisa: pension, profit sharing, stock bonus, qualified plans, seps, simples, many 403(b) plans, some non-qualified plan (457, not unfunded non-qualified plans. Plans exempt from erisa: employer only plans, governmental plans, church plans. Affirmative fiduciary obligations: exclusive-benefit rule, prudent-fiduciary role, diversification requirement. 13: investment decisions must conform with plan and trust documents, disclosure rules for participant-directed individual account plans. Exclusive benefit rule: fiduciaries must do things for the exclusive benefit of the plan, it"s participants and beneficiaries, includes fees, investments and service providers. Prudent man/fiduciary rule: invest as a prudent man would, does an investment fit, fees, buy/sell strategy, liquidity, correlation of the various investments. Diversification of the assets: don"t put all the plans eggs in one basket, conform to the investment policy statement (isp)
