Are Investment Holdings a Breach of the Fiduciary Standard?

[joel]

This ERISA Money Purchase Pension Plan is funded solely by the participating employer and has for decades invested solely in treasuries. Is this investment policy a breach of the Fiduciary Standard/Prudent Man Rule?

Upon retirement the participant may not take a lump-sum settlement but is limited to a maximum monthly withdrawal of $2,500 until the account is depleted. There are no other options. Can this be successfully challenged in Court?

[Lou S.]

Beyond the fiduciary question which may or may not be prudent, how does this payment option satisfy the QJSA rules?

[joel]

A QJSA is also offered and may be rejected by the participant and his/her spouse. Upon analysis, if the entire account balance is depleted in less than 10 years each monthly payment is an eligible rollover distribution. Those with larger account balances where it will take more than 10 years to deplete are at a disadvantage because the monthly periodic payments are not eligible rollover distributions. Can this case be successfully challenged in Court?

[masteff]

Over the past dozen years, a number of cases have been filed for too conservative investments. It's not a topic I follow so I can't say exactly how successful those cases are. But I know they're filed and some are won. I do recall a decade or so ago there was a case w/ this exact investment scenario, invested entirely in treasuries, because it reminded me of a place I worked as a temp where the owner had done the same thing with a profit sharing plan. No idea how to research it further.