Plan Fiduciary Actions to Take In Response to Mutual Fund Abuses
Assistant Secretary of Labor Ann Combs issued a guidance statement this week describing the actions that employee benefit plan fiduciaries should take to properly respond to recent alleged trading abuses involving mutual funds.
- If plan assets are invested in mutual funds currently under investigation, plan fiduciaries should establish and follow a prudent process to determine, among other things, the economic impact of those abuses on plan assets and any remedial actions to take to make the plan whole.
- If plan assets are invested in mutual funds not currently under investigation, plan fiduciaries should determine whether sufficient safeguards are in place to prevent or limit trading abuses.
- All plan fiduciaries should consider whether trading restrictions or penalties are imposed on plan participants by the mutual funds and/or the plan and if these restrictions are properly disclosed to plan participants.
For the Department of Labor press release on the statement, see http://www.dol.gov/ebsa/newsroom/pr021704.html. For more information on the guidance statement, see http://www.dol.gov/ebsa/newsroom/sp021704.html.
For further information and assistance in complying with this guidance, contact:
James Kemper
james.kemper@icemiller.com
(317) 236-2293
Gary Dankert
gary.dankert@icemiller.com
(317) 236-2203
Martha Hutzelman
martha.hutzelman@icemiller.com
(202) 824-8619
Ice Miller is a full-service law firm with offices in Chicago, Indianapolis and Washington, D.C. The 30 employee benefits professionals of Ice Miller provide legal and consulting services for retirement and health and welfare benefits and executive compensation to public and private employers, financial institutions, insurance companies and other types of benefit service providers.
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This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.
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