§ 1104. Fiduciary duties
(a)
Prudent man standard of care
(1)
Subject to sections
1103
(c) and (d),
1342, and
1344 of this title, a fiduciary shall discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries and—
(B)
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;
(2)
In the case of an eligible individual account plan (as defined in section
1107
(d)(3) of this title), the diversification requirement of paragraph (1)(C) and the prudence requirement (only to the extent that it requires diversification) of paragraph (1)(B) is not violated by acquisition or holding of qualifying employer real property or qualifying employer securities (as defined in section
1107
(d)(4) and (5) of this title).
(b)
Indicia of ownership of assets outside jurisdiction of district courts
Except as authorized by the Secretary by regulations, no fiduciary may maintain the indicia of ownership of any assets of a plan outside the jurisdiction of the district courts of the United States.
(c)
Control over assets by participant or beneficiary
(1)
(A)
In the case of a pension plan which provides for individual accounts and permits a participant or beneficiary to exercise control over the assets in his account, if a participant or beneficiary exercises control over the assets in his account (as determined under regulations of the Secretary)—
(i)
such participant or beneficiary shall not be deemed to be a fiduciary by reason of such exercise, and
(ii)
no person who is otherwise a fiduciary shall be liable under this part for any loss, or by reason of any breach, which results from such participant’s or beneficiary’s exercise of control, except that this clause shall not apply in connection with such participant or beneficiary for any blackout period during which the ability of such participant or beneficiary to direct the investment of the assets in his or her account is suspended by a plan sponsor or fiduciary.
(2)
In the case of a simple retirement account established pursuant to a qualified salary reduction arrangement under section
408
(p) of title
26, a participant or beneficiary shall, for purposes of paragraph (1), be treated as exercising control over the assets in the account upon the earliest of—
(3)
In the case of a pension plan which makes a transfer to an individual retirement account or annuity of a designated trustee or issuer under section
401
(a)(31)(B) of title
26, the participant or beneficiary shall, for purposes of paragraph (1), be treated as exercising control over the assets in the account or annuity upon—
(4)
(A)
In any case in which a qualified change in investment options occurs in connection with an individual account plan, a participant or beneficiary shall not be treated for purposes of paragraph (1) as not exercising control over the assets in his account in connection with such change if the requirements of subparagraph (C) are met in connection with such change.
(B)
For purposes of subparagraph (A), the term “qualified change in investment options” means, in connection with an individual account plan, a change in the investment options offered to the participant or beneficiary under the terms of the plan, under which—
(i)
the account of the participant or beneficiary is reallocated among one or more remaining or new investment options which are offered in lieu of one or more investment options offered immediately prior to the effective date of the change, and
(ii)
the stated characteristics of the remaining or new investment options provided under clause (i), including characteristics relating to risk and rate of return, are, as of immediately after the change, reasonably similar to those of the existing investment options as of immediately before the change.
(C)
The requirements of this subparagraph are met in connection with a qualified change in investment options if—
(i)
at least 30 days and no more than 60 days prior to the effective date of the change, the plan administrator furnishes written notice of the change to the participants and beneficiaries, including information comparing the existing and new investment options and an explanation that, in the absence of affirmative investment instructions from the participant or beneficiary to the contrary, the account of the participant or beneficiary will be invested in the manner described in subparagraph (B),
(5)
Default investment arrangements.—
(A)
In general.—
For purposes of paragraph (1), a participant or beneficiary in an individual account plan meeting the notice requirements of subparagraph (B) shall be treated as exercising control over the assets in the account with respect to the amount of contributions and earnings which, in the absence of an investment election by the participant or beneficiary, are invested by the plan in accordance with regulations prescribed by the Secretary. The regulations under this subparagraph shall provide guidance on the appropriateness of designating default investments that include a mix of asset classes consistent with capital preservation or long-term capital appreciation, or a blend of both.
(B)
Notice requirements.—
(i)
In general.—
The requirements of this subparagraph are met if each participant or beneficiary—
(I)
receives, within a reasonable period of time before each plan year, a notice explaining the employee’s right under the plan to designate how contributions and earnings will be invested and explaining how, in the absence of any investment election by the participant or beneficiary, such contributions and earnings will be invested, and
(ii)
Form of notice.—
The requirements of clauses (i) and (ii) of section
401
(k)(12)(D) of title
26 shall apply with respect to the notices described in this subparagraph.
(d)
Plan terminations
(1)
If, in connection with the termination of a pension plan which is a single-employer plan, there is an election to establish or maintain a qualified replacement plan, or to increase benefits, as provided under section
4980
(d) of title
26, a fiduciary shall discharge the fiduciary’s duties under this subchapter and subchapter III of this chapter in accordance with the following requirements:
(A)
In the case of a fiduciary of the terminated plan, any requirement—
(i)
under section
4980
(d)(2)(B) of title
26 with respect to the transfer of assets from the terminated plan to a qualified replacement plan, and
(ii)
under section
4980
(d)(2)(B)(ii) or
4980
(d)(3) of title
26 with respect to any increase in benefits under the terminated plan.
(B)
In the case of a fiduciary of a qualified replacement plan, any requirement—
(i)
under section
4980
(d)(2)(A) of title
26 with respect to participation in the qualified replacement plan of active participants in the terminated plan,