ERISA retirement plans—DB, DC, 401(k)—are funded plans. That means that, generally, savings—employer contributions and employee 401(k) contributions—are deposited in a trust and remain there, often for a very long time, until paid out to the participant.
While those savings are in a trust, “other people” are holding and investing the participant’s money. Under ERISA, those other people (following trust law) are called “fiduciaries” and are subject to a set of fairly rigorous standards.
In this chapter we’re going to review those standards in some detail. But first, let’s discuss why we are addressing this issue in the context of our broader discussion of the 401(k) system.
In a defined benefit plan, fiduciary ...