What are the duties of a fiduciary of an employee pension plan?
A: ERISA describes the duties of a fiduciary in three components. First, the fiduciary has a duty of loyalty regarding the plan and must act for most in the interest to the participants and beneficiaries of the plan. Second, ERISA imposes what is known as the "prudent man" obligation, which is an unwavering duty to act both as a prudent person would act in a similar situation and with single-minded devotion to those same plan participants and beneficiaries. Third, an ERISA fiduciary must act with the exclusive purpose of providing benefits to plan beneficiaries. The duties charged to an ERISA fiduciary are the highest known to the law.
When a court is asked to enforce a fiduciary's duties, the focus is not only on the merits of transactions that they have caused the plan to engage but also on the thoroughness of the investigation into the merits of the transaction.
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