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Pension Resource

29 C.F.R. § 2550.404a-1

Investment duties.
eCFR amendment effective 2020-11-13 · superseded Dec 16, 2020 · last amended by 44 FR 37225, June 26, 1979
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Link to an amendment published at 85 FR 72883, Nov. 13, 2020.
(a) In general. Section 404(a)(1)(B) of the Employee Retirement Income Security Act of 1974 (the Act) provides, in part, that a fiduciary shall discharge his duties with respect to a plan with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.
(b) Investment duties.
(1) With regard to an investment or investment course of action taken by a fiduciary of an employee benefit plan pursuant to his investment duties, the requirements of section 404(a)(1)(B) of the Act set forth in subsection (a) of this section are satisfied if the fiduciary:
(i) Has given appropriate consideration to those facts and circumstances that, given the scope of such fiduciary's investment duties, the fiduciary knows or should know are relevant to the particular investment or investment course of action involved, including the role the investment or investment course of action plays in that portion of the plan's investment portfolio with respect to which the fiduciary has investment duties; and
(ii) Has acted accordingly.
(2) For purposes of paragraph (b)(1) of this section, “appropriate consideration” shall include, but is not necessarily limited to,
(i) A determination by the fiduciary that the particular investment or investment course of action is reasonably designed, as part of the portfolio (or, where applicable, that portion of the plan portfolio with respect to which the fiduciary has investment duties), to further the purposes of the plan, taking into consideration the risk of loss and the opportunity for gain (or other return) associated with the investment or investment course of action, and
(ii) Consideration of the following factors as they relate to such portion of the portfolio:
(A) The composition of the portfolio with regard to diversification;
(B) The liquidity and current return of the portfolio relative to the anticipated cash flow requirements of the plan; and
(C) The projected return of the portfolio relative to the funding objectives of the plan.
(3) An investment manager appointed, pursuant to the provisions of section 402(c)(3) of the Act, to manage all or part of the assets of a plan, may, for purposes of compliance with the provisions of paragraphs (b)(1) and (2) of this section, rely on, and act upon the basis of, information pertaining to the plan provided by or at the direction of the appointing fiduciary, if -
(i) Such information is provided for the stated purpose of assisting the manager in the performance of his investment duties, and
(ii) The manager does not know and has no reason to know that the information is incorrect.
(c) Definitions. For purposes of this section:
(1) The term investment duties means any duties imposed upon, or assumed or undertaken by, a person in connection with the investment of plan assets which make or will make such person a fiduciary of an employee benefit plan or which are performed by such person as a fiduciary of an employee benefit plan as defined in section 3(21)(A)(i) or (ii) of the Act.
(2) The term investment course of action means any series or program of investments or actions related to a fiduciary's performance of his investment duties.
(3) The term plan means an employee benefit plan to which title I of the Act applies.
Source credit, amendments & notes

[44 FR 37225, June 26, 1979]

29 C.F.R. § 2550.404a-1 — Investment duties. · eCFR amendment effective 2020-11-13 · https://pensionresource.website/EAMain?content=EAMain.Law&id=cfr29-2550.404a-1&asof=2020-11-13 · printed Oct 16, 2026
On this page
  • (a) In general.
  • (b) Investment duties.
  • (c) Definitions.
Implements
ERISA § 404 (29 U.S.C. § 1104) Fiduciary duties
Guidance addressing this section
Department of Labor (EBSA)
Final Rules
Proposed Rules
  • 86 FR 57272Proposed Oct 14, 2021 — Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights Comments due Dec 13, 2021
  • 85 FR 55219Proposed Sep 4, 2020 — Fiduciary Duties Regarding Proxy Voting and Shareholder Rights Comments due Oct 5, 2020
  • 85 FR 39113Proposed Jun 30, 2020 — Financial Factors in Selecting Plan Investments Comments due Jul 30, 2020
Also cited in 12 other documents
Department of Labor (EBSA)
Technical Releases
Proposed Rules
  • 91 FR 16088Proposed Mar 31, 2026 — Fiduciary Duties in Selecting Designated Investment Alternatives Comments due Jun 1, 2026 (b)(1)(b)(1)(i)(b)(1)(ii)(b)(2)(b)(2)(ii)
  • 91 FR 4348Proposed Jan 30, 2026 — Improving Transparency Into Pharmacy Benefit Manager Fee Disclosure Comments due Mar 31, 2026
  • 89 FR 5624Proposed Jan 29, 2024 — Automatic Portability Transaction Regulations Comments due Mar 29, 2024
  • 79 FR 13949Proposed Mar 12, 2014 — Amendment Relating to Reasonable Contract or Arrangement Under Section 408(b)(2)-Fee Disclosure Comments due Jun 10, 2014
  • 75 FR 73987Proposed Nov 30, 2010 — Target Date Disclosure Comments due Jan 14, 2011
Final Rules
  • 85 FR 82798 Dec 18, 2020 — Prohibited Transaction Exemption 2020-02, Improving Investment Advice for Workers & Retirees
  • 81 FR 95879 Dec 29, 2016 — Interpretive Bulletin Relating to the Exercise of Shareholder Rights and Written Statements of Investment Policy, Including Proxy Voting Policies or Guidelines
  • 80 FR 65135 Oct 26, 2015 — Interpretive Bulletin Relating to the Fiduciary Standard Under ERISA in Considering Economically Targeted Investments
  • 80 FR 14301 Mar 19, 2015 — Fiduciary Requirements for Disclosure in Participant-Directed Individual Account Plans-Timing of Annual Disclosure
  • 77 FR 41678 Jul 16, 2012 — Amendment Relating to Reasonable Contract or Arrangement Under Section 408(b)(2)-Fee Disclosure/Web Page
  • 77 FR 5632 Feb 3, 2012 — Reasonable Contract or Arrangement Under Section 408(b)(2)-Fee Disclosure
Tax Court (1) · DOL/Federal (0)
U.S. Tax Court (1)
Also cite this provision (1)

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Each row is a version of the text as published by the official source. Code dates are the edition/release point that first reflected the change; regulation dates are eCFR effective dates. The library checks the official sources automatically, so new versions appear here on their own; “run” opens the sync that recorded a version.

EffectiveThroughSourceAmended by
Jul 1, 1997Jun 30, 2005CFR 2004 annual edition (revised as of 2004-07-01) run 12744 FR 37225, June 26, 1979View
Jul 1, 2005Nov 12, 2020eCFR amendment effective 2017-01-01 run 2644 FR 37225, June 26, 1979View · Redline (sign in)
Nov 13, 2020Dec 15, 2020eCFR amendment effective 2020-11-13 run 2644 FR 37225, June 26, 1979View · Redline (sign in)
Dec 16, 2020Jan 11, 2021eCFR amendment effective 2020-12-16 run 2644 FR 37225, June 26, 1979View · Redline (sign in)
Jan 12, 2021Jan 14, 2021eCFR amendment effective 2021-01-12 run 2685 FR 72883, Nov. 13, 2020View · Redline (sign in)
Jan 15, 2021Nov 30, 2022eCFR amendment effective 2021-01-15 run 2685 FR 81694, Dec. 16, 2020View · Redline (sign in)
Dec 1, 2022Jan 29, 2023eCFR amendment effective 2022-12-01 run 2685 FR 81694, Dec. 16, 2020View · Redline (sign in)
Jan 30, 2023currenteCFR amendment effective 2023-01-30 run 287 FR 73884, Dec. 1, 2022View · Redline (sign in)
Provision-level history (blame)