Legal Considerations When Engaging an Investment Professional for a Participant-Directed Defined Contribution Plan

Author(s): Jonathan Cerrito | Michael Daum

Tags: Defined Contribution Plans | Employee Benefits | ERISA

By Jonathan M. Cerrito & Michael R. Daum

This is the third 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.

Much has been made about the shift in the retirement landscape away from defined benefit pension plans and to defined contribution plans. With respect to such defined contribution plans, the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and regulations thereunder incentivize giving participants and beneficiaries control over the investment of their plan accounts by insulating plan fiduciaries from fiduciary liability with respect to exercises of that control. Therefore, it should come as no surprise that such participant-directed defined contribution plans continue to grow in number.

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