Subscribe to the Finance Headline RSS feed | Subscribe to the Finance Headline feed via EmailBNA INSIGHTS: Employee Retirement Income Security Act Fiduciary Rules and Target Date Funds
August 19, 2010 in Alternative Investment Law Report · Leave a Comment
In a Dec. 4, 2009, response to questions from Avatar Associates regarding conflicts of interest in target date funds, the U. S. Department of Labor clarified that plan sponsors, rather than the managers of target date funds, are solely responsible as fiduciaries under the Employee Retirement Income Security Act for losses occurring in such funds due to imprudent investments.
Nine days later, in an anticipated reaction, Senator Herb Kohl (D-Wis.) stated his intent to close this loophole, which allows managers of proprietary funds to circumvent ERISA fiduciary rules in Pension Protection Act-compliant plans ( 2 AIR 1838, 12/23/09).
