29 U.S.C. § 1104 : US Code - Section 1104: Fiduciary duties

Search 29 U.S.C. § 1104 : US Code - Section 1104: Fiduciary duties

    (a) Prudent man standard of care
      (1) Subject to sections 1103(c) and (d), 1342, and 1344 of this
    title, a fiduciary shall discharge his duties with respect to a
    plan solely in the interest of the participants and beneficiaries
    and - 
        (A) for the exclusive purpose of:
          (i) providing benefits to participants and their
        beneficiaries; and
          (ii) defraying reasonable expenses of administering the plan;

        (B) with the care, skill, prudence, and diligence under the
      circumstances then prevailing that a prudent man 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;
        (C) by diversifying the investments of the plan so as to
      minimize the risk of large losses, unless under the circumstances
      it is clearly prudent not to do so; and
        (D) in accordance with the documents and instruments governing
      the plan insofar as such documents and instruments are consistent
      with the provisions of this subchapter and subchapter III of this
      chapter.

      (2) In the case of an eligible individual account plan (as
    defined in section 1107(d)(3) of this title), the diversification
    requirement of paragraph (1)(C) and the prudence requirement (only
    to the extent that it requires diversification) of paragraph (1)(B)
    is not violated by acquisition or holding of qualifying employer
    real property or qualifying employer securities (as defined in
    section 1107(d)(4) and (5) of this title).
    (b) Indicia of ownership of assets outside jurisdiction of district
      courts
      Except as authorized by the Secretary by regulations, no
    fiduciary may maintain the indicia of ownership of any assets of a
    plan outside the jurisdiction of the district courts of the United
    States.
    (c) Control over assets by participant or beneficiary
      (1)(A) In the case of a pension plan which provides for
    individual accounts and permits a participant or beneficiary to
    exercise control over the assets in his account, if a participant
    or beneficiary exercises control over the assets in his account (as
    determined under regulations of the Secretary) - 
        (i) such participant or beneficiary shall not be deemed to be a
      fiduciary by reason of such exercise, and
        (ii) no person who is otherwise a fiduciary shall be liable
      under this part for any loss, or by reason of any breach, which
      results from such participant's or beneficiary's exercise of
      control, except that this clause shall not apply in connection
      with such participant or beneficiary for any blackout period
      during which the ability of such participant or beneficiary to
      direct the investment of the assets in his or her account is
      suspended by a plan sponsor or fiduciary.

      (B) If a person referred to in subparagraph (A)(ii) meets the
    requirements of this subchapter in connection with authorizing and
    implementing the blackout period, any person who is otherwise a
    fiduciary shall not be liable under this subchapter for any loss
    occurring during such period.
      (C) For purposes of this paragraph, the term "blackout period"
    has the meaning given such term by section 1021(i)(7) of this
    title.
      (2) In the case of a simple retirement account established
    pursuant to a qualified salary reduction arrangement under section
    408(p) of title 26, a participant or beneficiary shall, for
    purposes of paragraph (1), be treated as exercising control over
    the assets in the account upon the earliest of - 
        (A) an affirmative election among investment options with
      respect to the initial investment of any contribution,
        (B) a rollover to any other simple retirement account or
      individual retirement plan, or
        (C) one year after the simple retirement account is
      established.

    No reports, other than those required under section 1021(g) of this
    title, shall be required with respect to a simple retirement
    account established pursuant to such a qualified salary reduction
    arrangement.
      (3) In the case of a pension plan which makes a transfer to an
    individual retirement account or annuity of a designated trustee or
    issuer under section 401(a)(31)(B) of title 26, the participant or
    beneficiary shall, for purposes of paragraph (1), be treated as
    exercising control over the assets in the account or annuity upon -
    
        (A) the earlier of - 
          (i) a rollover of all or a portion of the amount to another
        individual retirement account or annuity; or
          (ii) one year after the transfer is made; or

        (B) a transfer that is made in a manner consistent with
      guidance provided by the Secretary.

      (4)(A) In any case in which a qualified change in investment
    options occurs in connection with an individual account plan, a
    participant or beneficiary shall not be treated for purposes of
    paragraph (1) as not exercising control over the assets in his
    account in connection with such change if the requirements of
    subparagraph (C) are met in connection with such change.
      (B) For purposes of subparagraph (A), the term "qualified change
    in investment options" means, in connection with an individual
    account plan, a change in the investment options offered to the
    participant or beneficiary under the terms of the plan, under which
    - 
        (i) the account of the participant or beneficiary is
      reallocated among one or more remaining or new investment options
      which are offered in lieu of one or more investment options
      offered immediately prior to the effective date of the change,
      and
        (ii) the stated characteristics of the remaining or new
      investment options provided under clause (i), including
      characteristics relating to risk and rate of return, are, as of
      immediately after the change, reasonably similar to those of the
      existing investment options as of immediately before the change.

      (C) The requirements of this subparagraph are met in connection
    with a qualified change in investment options if - 
        (i) at least 30 days and no more than 60 days prior to the
      effective date of the change, the plan administrator furnishes
      written notice of the change to the participants and
      beneficiaries, including information comparing the existing and
      new investment options and an explanation that, in the absence of
      affirmative investment instructions from the participant or
      beneficiary to the contrary, the account of the participant or
      beneficiary will be invested in the manner described in
      subparagraph (B),
        (ii) the participant or beneficiary has not provided to the
      plan administrator, in advance of the effective date of the
      change, affirmative investment instructions contrary to the
      change, and
        (iii) the investments under the plan of the participant or
      beneficiary as in effect immediately prior to the effective date
      of the change were the product of the exercise by such
      participant or beneficiary of control over the assets of the
      account within the meaning of paragraph (1).

      (5) Default investment arrangements. - 
        (A) In general. - For purposes of paragraph (1), a participant
      or beneficiary in an individual account plan meeting the notice
      requirements of subparagraph (B) shall be treated as exercising
      control over the assets in the account with respect to the amount
      of contributions and earnings which, in the absence of an
      investment election by the participant or beneficiary, are
      invested by the plan in accordance with regulations prescribed by
      the Secretary. The regulations under this subparagraph shall
      provide guidance on the appropriateness of designating default
      investments that include a mix of asset classes consistent with
      capital preservation or long-term capital appreciation, or a
      blend of both.
        (B) Notice requirements. - 
          (i) In general. - The requirements of this subparagraph are
        met if each participant or beneficiary - 
            (I) receives, within a reasonable period of time before
          each plan year, a notice explaining the employee's right
          under the plan to designate how contributions and earnings
          will be invested and explaining how, in the absence of any
          investment election by the participant or beneficiary, such
          contributions and earnings will be invested, and
            (II) has a reasonable period of time after receipt of such
          notice and before the beginning of the plan year to make such
          designation.

          (ii) Form of notice. - The requirements of clauses (i) and
        (ii) of section 401(k)(12)(D) of title 26 shall apply with
        respect to the notices described in this subparagraph.
    (d) Plan terminations
      (1) If, in connection with the termination of a pension plan
    which is a single-employer plan, there is an election to establish
    or maintain a qualified replacement plan, or to increase benefits,
    as provided under section 4980(d) of title 26, a fiduciary shall
    discharge the fiduciary's duties under this subchapter and
    subchapter III of this chapter in accordance with the following
    requirements:
        (A) In the case of a fiduciary of the terminated plan, any
      requirement - 
          (i) under section 4980(d)(2)(B) of title 26 with respect to
        the transfer of assets from the terminated plan to a qualified
        replacement plan, and
          (ii) under section 4980(d)(2)(B)(ii) or 4980(d)(3) of title
        26 with respect to any increase in benefits under the
        terminated plan.

        (B) In the case of a fiduciary of a qualified replacement plan,
      any requirement - 
          (i) under section 4980(d)(2)(A) of title 26 with respect to
        participation in the qualified replacement plan of active
        participants in the terminated plan,
          (ii) under section 4980(d)(2)(B) of title 26 with respect to
        the receipt of assets from the terminated plan, and
          (iii) under section 4980(d)(2)(C) of title 26 with respect to
        the allocation of assets to participants of the qualified
        replacement plan.

      (2) For purposes of this subsection - 
        (A) any term used in this subsection which is also used in
      section 4980(d) of title 26 shall have the same meaning as when
      used in such section, and
        (B) any reference in this subsection to title 26 shall be a
      reference to title 26 as in effect immediately after the
      enactment of the Omnibus Budget Reconciliation Act of 1990.