Fiduciary Decision-Making

A fund's fiduciaries may face conflicts of interest when they wear not only a fiduciary hat, but also a corporate, union or proprietary hat. For example: 

• A fund's sponsor proposes to contribute company stock, company-owned real estate or some other non-cash asset to fund a defined benefit pension plan or retiree health benefits;
• A company’s benefit plans that own company stock need an unconflicted fiduciary to vote the stock in connection with a merger, proxy fight or similar transaction;
• A bank trustee needs an individual prohibited transaction exemption from the U.S. Department of Labor in order to restructure the investment fund it manages for ERISA funds;
• A union and its related benefit funds want to enter into leases, loans, purchase and sale agreements or condominium agreements to develop jointly or share an office or training facility;
• A financial institution merging, reorganizing or consolidating mutual funds also has fiduciary clients and in-house benefit plans that own fund shares that have to be voted in connection with the transaction;
• A company’s leading executives are fiduciaries of the 401(k) plan responsible for deciding whether the plan should continue to offer company stock as an investment option.

 In these situations, IFS acts as an independent fiduciary - analyzing the proposed investment transaction from the fund's perspective, deciding whether it is in the best interest of the participants, and accepting ERISA fiduciary responsibility for the decision.