ABSTRACT
Fiduciary duty is an old concept, embedded in common law, that provides a framework for how trustees govern pension assets. Pension trustees often fear the personal liability associated with their responsibilities as fiduciaries; however, the duty is a relatively simple and straightforward concept. The idea of fiduciary duty is ancient, emerging in Europe during feudalism. The word “prudence” derives from the Latin term for “foresight” and means acting with or showing care and thought for the future. Prudence focuses on the process for making fiduciary decisions. Therefore, it is wise to document decisions and the basis for those decisions. For instance, in hiring a plan service provider, a fiduciary may want to survey a number of potential providers, asking for the same information and enforcing the same requirements. The exclusive benefit rule represents the duty of loyalty, which is perhaps the cardinal rule of fiduciary duty.
