Plan to offer diverse investment options – Understanding ERISA diversification requirements
Abstract: The Employee Retirement Income Security Act (ERISA) requires that a fiduciary diversify plan investments to minimize plan participants’ risk. Plan fiduciaries must act cautiously and solely in the best interest of the plan’s participants and beneficiaries. Who’s a fiduciary, and what are his or her responsibilities in a defined contribution (DC) retirement plan that allows participants or beneficiaries to direct their investments? This article answers these questions and more.