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(i) A determination by the fiduciary that the
particular investment or investment course of action is
reasonably designed, as part of the portfolio * * *, to
further the purposes of the plan, taking into consideration
the risk of loss and the opportunity for gain (or other
return) associated with the investment or investment course
of action, and
(ii) Consideration of the following factors * * *
(A) The composition of the portfolio with regard
to diversification;
(B) The liquidity and current return of the
portfolio relative to the anticipated cash flow
requirements of the plan; and
(C) The projected return of the portfolio
relative to the funding objectives of the plan.
29 C.F.R. sec. 2550.404a-1(b)(2).
The Department of Labor requirements appear consistent with
criteria set forth by the Commissioner in Rev. Rul. 69-494, 1969-
2 C.B. 88, for testing compliance with the exclusive benefit
requirement of section 401(a)(2). Those criteria are: (1) Cost
must not exceed fair market value at the time of purchase; (2) a
fair return commensurate with the prevailing rate must be
provided; (3) sufficient liquidity must be maintained to permit
distributions in accordance with the terms of the plan; and (4)
the safeguards and diversity that a prudent investor would adhere
to must be present. We previously have indicated that the
criteria listed in Rev. Rul. 69-494, supra, although not binding
on the Court, are relevant to a determination as to whether the
prudent investor requirements have been satisfied. See Winger's
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