Prudent Expert Rule
The Employee Retirement Income Security Act (ERISA) applies a revised and restated version of the prudent man rule to pension and profit sharing plans. ERISA requires that a fiduciary discharge his/her duties “with the care, skill, prudence, and diligence, under the circumstances then prevailing, that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.” This statement differs from the classic prudent man rule in that familiarity with such matters suggests a higher standard than simple prudence – hence the name, prudent expert rule.
There have been court cases that enforce the prudent expert rule; as the court ruled in Donovan vs. Cunningham, 716 F 2d 1455, 1467 (5th Cir. 1983) – “A pure heart and an empty head are not good enough.”