Common Terms and Definitions
Best Practices are the most efficient (least amount of effort) and effective (best results) ways of fulfilling a fiducary organization's duty based on repeatable procedures that have proven themselves over time for large numbers of people. Best Practices are accompanied by proper processes, checks, testing, and produce a desired outcome that can be delivered with fewer problems and unforeseen complications.
Fiduciary is a term applied to the individuals and/or organizations in whose hands are entrusted, by others, the vast majority of the world's liquid investable wealth.
Fiduciary Standards are documented agreements containing technical specifications or other precise criteria to be used consistently as rules, guidelines, or definitions of characteristics to ensure that a fiduciary organization's processes are fit for their purpose. A particular fiduciary standard is a living agreement that can have a profound influence on the safe handling of other people's money by employers, charitable organizations, investment firms, recordkeepers, and Third Party Administrators. Authentic Fiduciary Standards are developed and maintained by entities that have no economic conflict of interest in how they are used.
Investment Stewards are organizations that posses the legal responsibility for managing investment decisions on behalf of others. They include: corporate retirement plan sponsors, endowments, foundations, public pensions, and private trusts.
Law that Guides Charities on the Investment of Funds is The Uniform Prudent Management of Institutional Funds Act ("UPMIFA").
Pension Laws include the following:
- Employee Retirement Income Security Act of 1974 ("ERISA")
- Pension Protection Act of 2006 ("PPA")
- Management of Public Employees Retirement Systems Act ("MPERS").
Service Providers are businesses that provide services to Investment Stewards. They include Investment Advisors and Consultants, Investment Managers, and vendors of fiduciary support services such as Recordkeepers and Third Party Administrators.
Trust Laws include the following:
- Uniform Prudent Investor Act ("UPIA")
- Trustee Act 1956 - New Zealand