Opinion ID: 774353
Heading Depth: 3
Heading Rank: 1

Heading: Investment Guidelines

Text: 20 Fiduciaries who are responsible for plan investments governed by ERISA must comply with the plan's written statements of investment policy, insofar as those written statements are consistent with the provisions of ERISA. See 29 U.S.C. §§ 1102(a)(1); 29 C.F.R. §§ 2509.94-2(2). Although we have not addressed the issue, at least one other circuit has held that failure to follow written statements of investment policy constitutes a breach of fiduciary duty. See Dardaganis v. Grace Capital, Inc., 889 F.2d 1237, 1241-42 (2d Cir. 1989). 21 The Trusts contend that the district court erred in finding that Loomis did not violate guidelines requiring Loomis to notify the Trusts of significant changes in investment strategy and to seek clarification if the guidelines were unclear. While the district court did not make explicit factual findings regarding these precise issues, it did state that the guidelines permitted investment in CMOs and that Loomis had no obligation to disclose to the Trusts the particular risks inherent in inverse floaters before purchasing them. Implicit in these statements is a factual finding that Loomis did not violate the guidelines' notification requirements. This factual finding is not clearly erroneous because it is supported by evidence in the record, including the text of the guidelines themselves and the opinion of Loomis' expert, who testified that investment in inverse floaters did not represent a significant change in Loomis' investment strategy. 22 The Trusts also contend that the district court erred in failing to find a breach of fiduciary duties arising out of Loomis' asserted failure to comply with the conservativespirit of the guidelines. We are unaware of any authority indicating that a failure to comply with the spirit of written investment guidelines constitutes a breach of the duties imposed by §§ 1102(a)(1) when the actual terms of the written guidelines have been followed. Accordingly, we conclude that the district court did not err in failing to find a breach of fiduciary duty arising from the asserted violation of thespirit of the guidelines.