Which of the following best describes the duty of loyalty for fiduciaries?

The duty of loyalty for fiduciaries fundamentally revolves around the obligation to act in the best interest of the plan participants rather than prioritizing their own interests or personal gain. This duty mandates that fiduciaries navigate decisions and actions with the utmost care, focusing on the benefits and welfare of the individuals they represent, which typically includes employees and beneficiaries of the retirement plan.

Fiduciaries must avoid conflicts of interest and self-dealing, ensuring that their choices are solely aligned with enhancing the interests of the plan participants. This responsibility is critical in maintaining the integrity of the retirement plan and fostering trust among participants who depend on these fiduciaries for sound management of their benefits and resources.

Moreover, while ensuring compliance with federal regulations and consulting with other fiduciaries are important aspects of fiduciary responsibility, they are more aligned with the duty of care and the overall governance of the plan. The primary focus of the duty of loyalty, however, is unequivocally on prioritizing the interests of the participants above any personal or external considerations.