ERISA Issues: Rapid Fire
Chapters in this video
- 0:00 The Adam the advisor opening scenario: is he personally liable
- 1:01 ERISA scope and the functional fiduciary definition
- 1:45 The prudent expert standard versus prudent person
- 2:45 The four core fiduciary duties
- 2:50 Process versus outcomes: the objective prudence trap
- 3:22 The Investment Policy Statement as process evidence
- 3:48 Participant-directed safe harbor: three options, quarterly transfers, notice, control
- 5:15 QDIA and the 120-day capital preservation default limit
- 6:05 Parties in interest: employer, relatives, lineal descendants of any age
- 7:47 Prohibited transactions: self-dealing, lending, kickbacks, no reasonable compensation exception
- 8:55 Rapid-fire exam recap
What this video covers
- Who qualifies as an ERISA fiduciary by function rather than title, including anyone with discretionary control over plan management, authority over plan assets, or investment advice for compensation
- Why the prudent expert standard applies, not the prudent person standard, and why ignorance is never a defense
- How ERISA judges process over outcomes, and why a market loss alone does not equal a fiduciary breach while a sloppy process does
- What the Investment Policy Statement (IPS) contains and why it serves as contemporaneous evidence of prudence even though ERISA does not strictly mandate one
- The four requirements for the participant-directed safe harbor: at least three diversified options with materially different risk/return profiles, transfer ability generally at least quarterly, sufficient information including notice, and independent participant control
- How the qualified default investment alternative (QDIA) preserves safe harbor protection when participants make no election, and why capital preservation defaults expire after 120 days
- Who counts as a party in interest, including lineal descendants of any age, and why self-dealing and kickbacks have zero reasonable compensation exception
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