Fiduciaries of individual account pension plans, such as §401(k) plans, can be held liable for losses in an individual participant’s or beneficiary’s account. This potential liability presents an unacceptable risk to the trustees and plan administrators of these plans, especially when the plan is “self-directed,” i.e., the individual account holder exercises control over the assets.

How can a fiduciary shift the risk of loss caused by a participant’s or beneficiary’s exercise of control over the assets in their account?

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