Module 5 Fiduciary Resposibilities

Question 1

What has brought fiduciary responsibility and liability into the spotlight in recent years?

Answer 1

Bankruptcies of high-profile companies and scrutiny of certain practices in the mutual fund industry

This increased attention has led to a greater understanding of fiduciary duties.

Question 2

What type of plans must comply with laws and regulations relating to fiduciary responsibilities?

Answer 2

Employer-sponsored retirement plans

Compliance is critical to protect both the plan participants and the fiduciaries themselves.

Question 3

What are the five fiduciary standards imposed by ERISA and administered by the department of labor

Answer 3

Act with only one purpose

Act reasonably and in a prudent manner

Diversify investments

Follow terms of plan

Examples of fiduciaries
- the employer
- It’s officers and directors
- the trustee
- a union
- plan administrator
- insurance company
- Attorney or consultant