401(k) Investment Policy
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There are a number of fiduciary responsibilities associated with managing plan assets. Most important among them include doing so with the care, skill, prudence and diligence of a prudent expert, in addition to diversifying the investments of the plan so as to minimize the risk of large losses. A written Investment Policy Statement (IPS) documents these fiduciary responsibilities and ensures fiduciaries are adhering to them.
Under ERISA, plan trustees are expected to “prudently” manage assets of the plan specifically for the benefit of the plan participants. The ERISA Code and the Department of Labor have established expectations with regard to a prudent process for plan trustees:
- An investment policy must be established.
- Plan assets must be diversified.
- Investment decisions are expected to be made and executed with the skill and care of a prudent expert.
- Prohibited transactions must be avoided.
Material contained in ComplianceDashboard is a compilation of generally published information by the Department of Labor and other public agencies regulating employee benefit plans and employee benefit issues. It is not legal advice, and should not be construed as legal advice. If legal advice or other professional assistance is or may be required with regard to any issues referenced in this website, the services of a competent legal or tax professional should be immediately sought. The inclusion of links within the ComplianceDashboard website is for informational purposes only. ComplianceDashboard does not warrant the accuracy of information outside this website that is found as a result of following links contained herein, nor does the inclusion of those links herein constitute endorsement of the content of any other website. If you have questions regarding this disclaimer, please contact us at 877-328-7880.