ERISA Act 1974

ERISA Fiduciary Duty and Standards of Conduct Rules

ERISA describes a fiduciary's duty and standards of conduct as follows:

• The fiduciary must discharge his or her duties with respect to a plan for the exclusive benefit of participants and beneficiaries and for the exclusive purpose of providing benefits and defraying reasonable plan administrative expenses.

• A fiduciary must carry out his or her responsibilities with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.

• A fiduciary must diversify the investments of a plan so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so. A fiduciary must consider the purpose of the plan, the total value of plan assets, the plan's cash flow needs, the plan's risk tolerance, the type of investment being considered, financial and industrial conditions and distribution of investments as to industry, geographic location, and dates of maturity.

• A fiduciary must operate the plan in accordance with the documents and instruments which govern the plan.
  

When investing plan assets a fiduciary must give appropriate consideration to those facts and circumstances (including the ages and length of service of participants) that the fiduciary knows, or should know, are relevant to the particular investment and to the role of the investment in the plan's total investment portfolio.

Finally, no investment should be made that is not expressly authorized by the plan, the trust agreement, or written investment guidelines.