U.S. Eases Pension Investing by Philip Shabecoff

TL;DR - The Labor Department issued an amendment to ERISA’s prudent-man rule to incentivize riskier investments.

Helpfulness - 3

Tags - pension, prudent-man, Labor Department, ERISA

Questions answered:

  • Why is the “prudent-man rule” named as such?
  • How is investment deemed as prudent or imprudent?
  • What department was responsible for overseeing ERISA?

Summary:

  • Amendment was made in 1979 to the Employee Retirement Income Safety Act (ERISA) in order to clarify “prudent-man rule”
  • This amendment was meant to assure investors that the prudence-rule was flexible regarding riskier investments.

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