The focus of the paper is on retirement plans whose members derive financial claims directly or indirectly from financial investments made by them or by others on their behalf (as contrasted with what are termed “pay-as-you-go” plans). Central to the efficacy of funded plans are the roles and responsibilities of those with ultimate authority to make the required investment- related decisions and effective fulfillment of them by those to whom we refer to as “investment decision-makers”.) Although the matter of efficacy quite obviously is rooted in concern for sought-for outcomes for individual plan members there are also significant implications for the larger economy and society. Discussion with respect to those roles and responsibilities often falls in whole or part under the rubric of what is termed “fiduciary duty”; however, there are other important and related roles and responsibilities which occasion the choice of title for the paper.
More particularly, it considers key issues encompassed by discourse in India and the United States pertaining to fiduciary duty as they concern investment decision makers. In part the premise is that there can be much that each country can learn from the other in view of their different experiences in that regard. In part it is also in recognition of the fact that retirement plans in each country have made or may make investments in the other and that insofar as such investments might be mutually desirable having a sufficient understanding of how fiduciary duty shapes the expectations and channels the needs of plan members is critical to achievement of that shared goal.
In our view the available literature in these terms has been modest indeed so in a number of respects it has been unchartered territory. Moreover, the retirement systems in both countries are composed of a range of rather different kinds of plans, many of which have a rich and varied history and diverse associated institutions, policies, and practices the attributes of which are not immediately or readily made transparent or accessible, especially to those in another country.
With that in mind, this paper sets the stage for and makes an initial foray into debate in both countries in relevant terms, identifying key concepts and modes of thinking and implementation. We strive to flesh out the foregoing by an in-depth illustrative discussion of the issues as they relate to one important kind of plan within the retirement system of each country. We do so with any eye to structuring the analysis to establish the basis for an inquiry in a subsequent essay with not only potentially greater depth but also a broader reach in terms of the types of plans canvassed. In the concluding section of this paper we offer what might be termed observations but which may also be viewed as recommendations for others concerned with these issues, especially those with authority as to what fiduciary duty should entail. That being said we do so recognizing that given the distinctive experience of each country those observations (or recommendations) may have greater or less import or play out in a different way.