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Fiduciaries under ERISA do not know their duties

For many who have benefit plans through employers, the results of a recent study may bring shock and fear, especially for those who are nearing retirement. It seems that, in more than half of the cases, no one is minding the store. In other words, those whose duties are to oversee and protect retirement plans and investments covered by the Employee Retirement Income Security Act of 1974 (ERISA) do not know they are fiduciaries. Tennessee participants may want to examine their benefits to see who is monitoring their plans.

The survey asked 1,000 executives about their duties concerning company plans. Based on those descriptions, all who were surveyed were legally fiduciaries of the plans. However, 55 percent believed they were not fiduciaries or were not sure if they were. Some of these executives were supposedly overseeing plans worth hundreds of millions of dollars but had no idea of their responsibilities.

It is true that executives can delegate certain responsibilities to others, such as administrators or consultants, but the process for doing so is difficult and requires careful documentation. Additionally, even after offloading some duties, the executive may not be completely relieved of fiduciary responsibility. In the survey, many who believed they had passed off their fiduciary duties had no idea which, if any, responsibilities they retained.

The publishers of the survey recommended re-education of executives to ensure they understand what is at stake if they fail to uphold their fiduciary duties under ERISA. This may include frequent seminars and training. Meanwhile, those in Tennessee whose plans have suffered because of the negligence of someone who failed to fulfill his or her duties as a fiduciary can consult with an attorney about possible recourse.

Source: pionline.com, “No excuse for fiduciary ignorance“, Feb. 19, 2018