Increased Liability for Fiduciaries, Trustees and Plan Sponsors?
Fiduciary liability is serious stuff. As earlier discussed, ERISA litigation statistics suggest a precipitous increase, especially with respect to issues of fiduciary breach. (See "Pension Lawsuits".)
According to Reish Luftman Reicher & Cohen attorney Joe Faucher, ERISA fiduciary liability can apply "when the plan expressly designates a person as a fiduciary, generally as the plan administrator, plan trustee, or member of an administrative committee". It is also relevant when "a manager performs a function that ERISA deems a fiduciary function". Examples include the following:
1. Influence or control "over the management of the plan or any authority or control over management or disposition of the plan assets"
2. Provision of investment advice in exchange for a fee
3. Discretionary authority as regards plan administration
On June 13, Greenberg Traurig attorney and Chairman of the Employee Benefits Group, Jeffrey D. Mamorsky, will be joined by Rhonda Prussack, Fiduciary Liability Product Manager for the National Union Fire Insurance Company and IRS Senior Employee Plans Examiner and Large Case Reviewer, Randy G. Sammons.
The topics?
1. Trends in Litigation
2. Regulatory Environment
3. IRS Audit Initiatives
4. Prescriptive Techniques to Avoid Litigation
Is a new wave of trouble about to crash around us?
With an increased focus on compliance, governance and best practices, we're likely to hear much more about fiduciary breach. Keep in mind that even service providers such as CPAs, money managers and consultants are vulnerable, personally and professionally. (The author is neither an attorney nor CPA. Readers are urged to seek advice from appropriate professionals as to whether they are fiduciaries to a plan and what that entails.)
Though not a panacea for eliminating oversight duties, outsourcing is gaining in popularity. Independent Fiduciary Services CEO Samuel (Skip) Halpern provides some compelling reasons as to why and when to seek help in the form of an independent fiduciary.
Look for much more on this topic in coming months!
