ERISA sets a high bar for fiduciary decision-making, essentially requiring plan fiduciaries to act as prudent experts might be expected to act — not just a prudent person. Similarly, when appointing an employee or officer to a plan committee, there are three critical areas of inquiry, FPG’s Charles Humphrey notes in a recent blog post:
1. Capacity — the “can the candidate do the job” question.
2. Conflict — the candidate should be free from all conflict with plan interests.
3. Commitment — the candidate must be able to commit sufficient time and attention to his or her fiduciary duties to perform the job at a high level.
Humphrey provides a deeper dive that’s well worth reading, offering tips on defining and applying all three standards.
