Prudence and Process – The Two P’s of Fiduciary Responsibility

Now that you know how to determine whether you’re a fiduciary, what do you need to do about it? The Employee Retirement Income Security Act of 1974 (ERISA) has a clear set of responsibilities and duties for fiduciaries. It is important that you take these requirements seriously and understand your own responsibilities as well as those of the other plan fiduciaries.

A fiduciary must always…Be Prudent:
• Look out only for the interests of plan participants and their beneficiaries;

• Diversify the plan’s investments to minimize risk; and

• Pay only what is reasonable for plan expenses.

Fiduciaries are not responsible for delivering the absolute best investment performance. They are responsible for following a prudent decision-making process that is reasonable and well-documented, and for making decisions with the best interest of participants in mind.

A prudent process should contain:
• Hiring advisors where appropriate;

• Investment Committees that meet regularly;

• An Investment Policy Statement that provides clarity around how investments will be selected, monitored, and replaced;

• Investment Committee members that review materials in advance, attend meetings, ask questions and seek understanding;

• Investment Committee meetings that contain well thought out analysis, robust due diligence, lively debate, and decision making;

• Minutes that capture attendees, discussions, questions raised, decisions made, and next steps.


All investment advisory services and fiduciary services are provided through Conrad Siegel Investment Advisors, Inc. (“CSIA”), a fee-for-service investment adviser registered with the U.S. Securities and Exchange Commission which operates in a fiduciary capacity for its clients. Investing in securities involves the potential for gains and the risk of loss and past performance may not be indicative of future results. Any testimonials do not refer, directly or indirectly, to CSIA or its investment advice, analysis or other advisory services.