Trustees Must Actively Monitor Investments

September 21, 2017

Unfortunately, there is no set it and forget it button for fiduciaries of plans. Fiduciaries may think that by hiring an Investment Manager they absolve themselves of the responsibility to monitor investments, but a recent district court opinion reminds fiduciaries again that this is not the case. The court held that plans who appoint an Investment Manager still must actively monitor the Investment Manager’s performance and that the duty to monitor is not a passive but a substantive duty. Plans should adopt routine investment monitoring procedures, follow those procedures, and correct any performance deficiencies of the Investment Manager. There is no risk-free way to put the investments of the plan on autopilot. While hiring a quality Investment Manager helps, it still does not completely insulate plan fiduciaries.

 

Perez v. WPN Corp., Severstal Wheeling, et. Al., No. 14-1494 (W.D. Penn. June 7, 2017)

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