Page 431 TITLE 29—LABOR § 1104

(2) The assets of a welfare plan which terminates shall be distributed in accordance with the

terms of the plan, except as otherwise provided

in regulations of the Secretary.

(Pub. L. 93–406, title I, §403, Sept. 2, 1974, 88 Stat.

876; Pub. L. 96–364, title III, §310, title IV,

§§402(b)(2), 410(a), 411(c), Sept. 26, 1980, 94 Stat.

1296, 1299, 1308; Pub. L. 100–203, title IX, §9343(c),

Dec. 22, 1987, 101 Stat. 1330–372; Pub. L. 101–239,

title VII, §§7881(k), 7891(a)(1), 7894(e)(1)(A), (3),

Dec. 19, 1989, 103 Stat. 2443, 2445, 2450; Pub. L.

101–508, title XII, §12012(a), Nov. 5, 1990, 104 Stat.

1388–571; Pub. L. 103–465, title VII, §731(c)(4)(B),

Dec. 8, 1994, 108 Stat. 5004.)

REFERENCES IN TEXT

This chapter, referred to in subsecs. (a)(1) and (b)(4),

(6), was in the original ‘‘this Act’’, meaning Pub. L.

93–406, known as the Employee Retirement Income Security Act of 1974. Titles I, III, and IV of such Act are

classified principally to this chapter. For complete

classification of this Act to the Code, see Short Title

note set out under section 1001 of this title and Tables.

AMENDMENTS

1994—Subsec. (c)(1). Pub. L. 103–465 substituted ‘‘1995’’

for ‘‘1991’’.

1990—Subsec. (c)(1). Pub. L. 101–508 inserted ‘‘, or

under section 420 of title 26 (as in effect on January 1,

1991)’’ after ‘‘insured plans’’.

1989—Subsecs. (b)(3), (5), (c)(2)(A)(ii), (C). Pub. L.

101–239, §7891(a)(1), substituted ‘‘Internal Revenue Code

of 1986’’ for ‘‘Internal Revenue Code of 1954’’, which for

purposes of codification was translated as ‘‘title 26’’

thus requiring no change in text.

Subsec. (b)(3). Pub. L. 101–239, §7894(e)(3), redesignated cls. (i) and (ii) as subpars. (A) and (B), respectively, struck out ‘‘, to the extent that such plan’s assets are held in one or more custodial accounts which

qualify under section 401(f) or 408(h) of title 26, whichever is applicable’’ before the semicolon in subpar. (B),

and inserted concluding provision ‘‘to the extent that

such plan’s assets are held in one or more custodial accounts which qualify under section 401(f) or 408(h) of

title 26, whichever is applicable.’’

Subsec. (c)(2)(A). Pub. L. 101–239, §7894(e)(1)(A), in introductory provisions, made technical amendment to

reference to part 1 of subtitle E of subchapter III of this

chapter to correct reference to corresponding part of

original Act, requiring no change in text, and in cls. (i)

and (ii), inserted ‘‘if such contribution or payment is’’

before ‘‘made by an employer’’.

Subsec. (c)(3), (4). Pub. L. 101–239, §7881(k), redesignated par. (4) as (3) and struck out former par. (3) which

read as follows: ‘‘In the case of a contribution which

would otherwise be an excess contribution (as defined

in section 4979(c) of title 26) paragraph (1) shall not prohibit a correcting distribution with respect to such

contribution from the plan to the employer to the extent permitted in such section to avoid payment of an

excise tax on excess contributions under such section.’’

1987—Subsec. (c)(2)(B). Pub. L. 100–203, §9343(c)(1),

amended subpar. (B) generally. Prior to amendment,

subpar. (B) read as follows: ‘‘If a contribution is conditioned on qualification of the plan under section 401,

403(a), or 405(a) of title 26, and if the plan does not qualify, then paragraph (1) shall not prohibit the return of

such contributions to the employer within one year

after the date of denial of qualification of the plan.’’

Subsec. (c)(3). Pub. L. 100–203, §9343(c)(2), substituted

‘‘section 4979(c) of title 26’’ for ‘‘section 4972(b) of title

26’’.

1980—Subsec. (a)(1). Pub. L. 96–364, §402(b)(2), substituted ‘‘chapter’’ for ‘‘subchapter’’.

Subsec. (b)(6). Pub. L. 96–364, §411(c), added par. (6).

Subsec. (c)(1). Pub. L. 96–364, §310(1), inserted reference to par. (4).

Subsec. (c)(2)(A). Pub. L. 96–364, §410(a), substituted

provisions relating to contributions or payments of

withdrawal liability under part 1 of subtitle E of subchapter III of this chapter made by an employer to a

plan by a mistake of fact, and by an employer to a

multiemployer plan by a mistake of fact or law, for

provisions relating to contributions made by an employer by a mistake of fact.

Subsec. (c)(4). Pub. L. 96–364, §310(2), added par. (4).

EFFECTIVE DATE OF 1990 AMENDMENT

Amendment by Pub. L. 101–508 applicable to qualified

transfers under section 420 of title 26 made after Nov.

5, 1990, see section 12012(e) of Pub. L. 101–508, set out as

a note under section 1021 of this title.

EFFECTIVE DATE OF 1989 AMENDMENT

Amendment by section 7881(k) of Pub. L. 101–239 effective, except as otherwise provided, as if included in the

provision of the Pension Protection Act, Pub. L.

100–203, §§9302–9346, to which such amendment relates,

see section 7882 of Pub. L. 101–239, set out as a note

under section 401 of Title 26, Internal Revenue Code.

Amendment by section 7891(a)(1) of Pub. L. 101–239 effective, except as otherwise provided, as if included in

the provision of the Tax Reform Act of 1986, Pub. L.

99–514, to which such amendment relates, see section

7891(f) of Pub. L. 101–239, set out as a note under section

1002 of this title.

Section 7894(e)(1)(B) of Pub. L. 101–239 provided that:

‘‘The amendments made by subparagraph (A) [amending this section] shall take effect as if included in section 410 of the Multiemployer Pension Plan Amendments Act of 1980 [Pub. L. 96–364].’’

Amendment by section 7894(e)(3) of Pub. L. 101–239 effective, except as otherwise provided, as if originally

included in the provision of the Employee Retirement

Income Security Act of 1974, Pub. L. 93–406, to which

such amendment relates, see section 7894(i) of Pub. L.

101–239, set out as a note under section 1002 of this title.

EFFECTIVE DATE OF 1980 AMENDMENT

Amendment by Pub. L. 96–364 effective Sept. 26, 1980,

except as specifically provided, see section 1461(e) of

this title.

Amendment by section 410(a) of Pub. L. 96–364 effective Jan. 1, 1975, except with respect to contributions

received by a collectively bargained plan maintained

by more than one employer before Sept. 26, 1980, see

section 410(c) of Pub. L. 96–364, set out as a note under

section 401 of Title 26, Internal Revenue Code.

REGULATIONS

Secretary authorized, effective Sept. 2, 1974, to promulgate regulations wherever provisions of this part

call for the promulgation of regulations, see sections

1031 and 1114 of this title.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1104, 1105, 1114,

1403 of this title; title 26 section 409.

§ 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—

(A) for the exclusive purpose of:

(i) providing benefits to participants and

their beneficiaries; and

(ii) defraying reasonable expenses of administering the plan;

(B) with the care, skill, prudence, and diligence under the circumstances then prevailing

that a prudent man acting in a like capacity
§ 1104 TITLE 29—LABOR Page 432

and familiar with such matters would use in

the conduct of an enterprise of a like character and with like aims;

(C) by diversifying the investments of the

plan so as to minimize the risk of large losses,

unless under the circumstances it is clearly

prudent not to do so; and

(D) in accordance with the documents and

instruments governing the plan insofar as

such documents and instruments are consistent with the provisions of this subchapter and

subchapter III of this chapter.

(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) 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)—

(A) such participant or beneficiary shall not

be deemed to be a fiduciary by reason of such

exercise, and

(B) 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.

(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—

(A) an affirmative election among investment options with respect to the initial investment of any contribution,

(B) a rollover to any other simple retirement

account or individual retirement plan, or

(C) one year after the simple retirement account is established.

No reports, other than those required under section 1021(g) of this title, shall be required with

respect to a simple retirement account established pursuant to such a qualified salary reduction arrangement.

(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,

(ii) under section 4980(d)(2)(B) of title 26

with respect to the receipt of assets from the

terminated plan, and

(iii) under section 4980(d)(2)(C) of title 26

with respect to the allocation of assets to

participants of the qualified replacement

plan.

(2) For purposes of this subsection—

(A) any term used in this subsection which is

also used in section 4980(d) of title 26 shall

have the same meaning as when used in such

section, and

(B) any reference in this subsection to title

26 shall be a reference to title 26 as in effect

immediately after the enactment of the Omnibus Budget Reconciliation Act of 1990.

(Pub. L. 93–406, title I, §404, Sept. 2, 1974, 88 Stat.

877; Pub. L. 96–364, title III, §309, Sept. 26, 1980,

94 Stat. 1296; Pub. L. 101–508, title XII,

§12002(b)(1), (2)(A), Nov. 5, 1990, 104 Stat. 1388–565,

1388–566; Pub. L. 104–188, title I, §1421(d)(2), Aug.

20, 1996, 110 Stat. 1799.)

REFERENCES IN TEXT

The enactment of the Omnibus Budget Reconciliation

Act of 1990, referred to in subsec. (d)(2)(B), is the enactment of Pub. L. 101–508, which was approved Nov. 5,

1990.

AMENDMENTS

1996—Subsec. (c). Pub. L. 104–188 designated existing

provisions as par. (1), redesignated former pars. (1) and

(2) as subpars. (A) and (B), respectively, and added par.

(2).

1990—Subsec. (a)(1)(D). Pub. L. 101–508, §12002(b)(2)(A),

substituted ‘‘and subchapter III’’ for ‘‘or subchapter

III’’.

Subsec. (d). Pub. L. 101–508, §12002(b)(1), added subsec.

(d).

1980—Subsec. (a)(1)(D). Pub. L. 96–364 inserted reference to subchapter III of this chapter.

EFFECTIVE DATE OF 1996 AMENDMENT

Amendment by Pub. L. 104–188 applicable to taxable

years beginning after Dec. 31, 1996, see section 1421(e) of

Pub. L. 104–188, set out as a note under section 72 of

Title 26, Internal Revenue Code.

EFFECTIVE DATE OF 1990 AMENDMENT

Amendment by Pub. L. 101–508 applicable to reversions occurring after Sept. 30, 1990, but not applicable
Page 433 TITLE 29—LABOR § 1105

to any reversion after Sept. 30, 1990, if (1) in the case of

plans subject to subchapter III of this chapter, notice of

intent to terminate under such subchapter was provided to participants (or if no participants, to Pension

Benefit Guaranty Corporation) before Oct. 1, 1990, (2) in

the case of plans subject to subchapter I of this chapter

(and not subchapter III), notice of intent to reduce future accruals under section 1054(h) of this title was provided to participants in connection with termination

before Oct. 1, 1990, (3) in the case of plans not subject

to subchapter I or III of this chapter, a request for a determination letter with respect to termination was

filed with Secretary of the Treasury or Secretary’s

delegate before Oct. 1, 1990, or (4) in the case of plans

not subject to subchapter I or III of this chapter and

having only one participant, a resolution terminating

the plan was adopted by employer before Oct. 1, 1990,

see section 12003 of Pub. L. 101–508, set out as a note

under section 4980 of Title 26, Internal Revenue Code.

EFFECTIVE DATE OF 1980 AMENDMENT

Amendment by Pub. L. 96–364 effective Sept. 26, 1980,

except as specifically provided, see section 1461(e) of

this title.

REGULATIONS

Secretary authorized, effective Sept. 2, 1974, to promulgate regulations wherever provisions of this part

call for the promulgation of regulations, see sections

1031 and 1114 of this title.

PLAN AMENDMENTS NOT REQUIRED UNTIL

JANUARY 1, 1998

For provisions directing that if any amendments

made by subtitle D [§§1401–1465] of title I of Pub. L.

104–188 require an amendment to any plan or annuity

contract, such amendment shall not be required to be

made before the first day of the first plan year beginning on or after Jan. 1, 1998, see section 1465 of Pub. L.

104–188, set out as a note under section 401 of Title 26,

Internal Revenue Code.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1101, 1105, 1107,

1344, 1403 of this title.

§ 1105. Liability for breach of co-fiduciary

(a) Circumstances giving rise to liability

In addition to any liability which he may have

under any other provisions of this part, a fiduciary with respect to a plan shall be liable for a

breach of fiduciary responsibility of another fiduciary with respect to the same plan in the following circumstances:

(1) if he participates knowingly in, or knowingly undertakes to conceal, an act or omission of such other fiduciary, knowing such act

or omission is a breach;

(2) if, by his failure to comply with section

1104(a)(1) of this title in the administration of

his specific responsibilities which give rise to

his status as a fiduciary, he has enabled such

other fiduciary to commit a breach; or

(3) if he has knowledge of a breach by such

other fiduciary, unless he makes reasonable

efforts under the circumstances to remedy the

breach.

(b) Assets held by two or more trustees

(1) Except as otherwise provided in subsection

(d) of this section and in section 1103(a)(1) and

(2) of this title, if the assets of a plan are held

by two or more trustees—

(A) each shall use reasonable care to prevent

a co-trustee from committing a breach; and

(B) they shall jointly manage and control

the assets of the plan, except that nothing in

this subparagraph (B) shall preclude any

agreement, authorized by the trust instrument, allocating specific responsibilities, obligations, or duties among trustees, in which

event a trustee to whom certain responsibilities, obligations, or duties have not been allocated shall not be liable by reason of this subparagraph (B) either individually or as a trustee for any loss resulting to the plan arising

from the acts or omissions on the part of another trustee to whom such responsibilities,

obligations, or duties have been allocated.

(2) Nothing in this subsection shall limit any

liability that a fiduciary may have under subsection (a) of this section or any other provision

of this part.

(3)(A) In the case of a plan the assets of which

are held in more than one trust, a trustee shall

not be liable under paragraph (1) except with respect to an act or omission of a trustee of a

trust of which he is a trustee.

(B) No trustee shall be liable under this subsection for following instructions referred to in

section 1103(a)(1) of this title.

(c) Allocation of fiduciary responsibility; designated persons to carry out fiduciary responsibilities

(1) The instrument under which a plan is

maintained may expressly provide for procedures (A) for allocating fiduciary responsibilities (other than trustee responsibilities) among

named fiduciaries, and (B) for named fiduciaries

to designate persons other than named fiduciaries to carry out fiduciary responsibilities

(other than trustee responsibilities) under the

plan.

(2) If a plan expressly provides for a procedure

described in paragraph (1), and pursuant to such

procedure any fiduciary responsibility of a

named fiduciary is allocated to any person, or a

person is designated to carry out any such responsibility, then such named fiduciary shall

not be liable for an act or omission of such person in carrying out such responsibility except to

the extent that—

(A) the named fiduciary violated section

1104(a)(1) of this title—

(i) with respect to such allocation or designation,

(ii) with respect to the establishment or

implementation of the procedure under this

paragraph (1), or

(iii) in continuing the allocation or designation; or

(B) the named fiduciary would otherwise be

liable in accordance with subsection (a) of this

section.

(3) For purposes of this subsection, the term

‘‘trustee responsibility’’ means any responsibility provided in the plan’s trust instrument (if

any) to manage or control the assets of the plan,

other than a power under the trust instrument

of a named fiduciary to appoint an investment

manager in accordance with section 1102(c)(3) of

this title.

(d) Investment managers

(1) If an investment manager or managers

have been appointed under section 1102(c)(3) of