Employment Law Resources


Feb 13 2015

Considerations for Defined Benefit Plan Fiduciaries Who Hire Nondiscretionary Investment Consultants

Author(s): Jonathan Cerrito | Michael Daum


This is the second in a series of articles about legal considerations under ERISA for pension plan fiduciaries in selecting and monitoring investment professionals to assist with the investment of plan assets. Although there are a multitude of general differences between a defined benefit pension plan and a defined contribution pension plan where participants don’t direct their investments, the high-level legal structure governing the investment of plan assets is similar. Essentially, there is one pool of money that the responsible plan fiduciaries are required to invest in a prudent manner, either to ensure that the plan has sufficient assets to pay promised plan benefits (in a defined benefit plan) or to increase and protect the amount available to participants in their individual bookkeeping accounts (in a defined contribution plan).

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