At the invitation of the ERISA Advisory Council, I presented testimony about "Hard to Value Assets" on September 11, 2008 in Washington, D.C. Some of the questions I was asked to answer are listed below:
- Should valuation issues play a role in the selection of plan investments, and in achieving proper asset allocation and diversification?
- What, if any, modifications to plan investment policies and guidelines should plans consider when utilizing "hard to value assets?"
- As fiduciaries, what do you deem to be or what do you expect to be "hard to value assets?"
- Who can the fiduciary rely upon when ascertaining the value of "hard to value assets" when the fiduciary is incapable of valuing, in order to fulfill their fiduciary responsibility to plan participants?
- What valuation policies and procedures should a fiduciary adopt when holding "hard to value" assets?
- What disclosures and education measures are required or suggested for participants and fiduciaries with respect to plans which invest in "hard to value" assets?
Given the recent tumult in the global financial markets, it seems as if an eternity has passed since the September 11 hearing date. Valuation continues to be a hugely important topic. I hope that my comments are informative and helpful to readers. Let me know what you think. Click here to read "Testimonial Remarks Presented by Dr. Susan Mangiero."