Attorneys Charles C. Jackson and D. Ward Kallstrom from the Morgan Lewis & Bockius firm and Alison L. Martin from the Specialty Claims Department of the Chubb Group of Insurance Companies outline the various responsibilities of those associated with pension and benefit programs.
The authors of “Who May Sue You and Why: How to Reduce Your ERISA Risks, and the Role of Fiduciary Liability Insurance” also outline steps ERISA fiduciaries can take both in plan design and administration to protect one’s legal position.
Some of their suggestions include:
- delegate fiduciary functions to committees with members who have the expertise and time to properly perform their duties;
- establish programs to train fiduciaries on their responsibilities;
- ensure the plan’s fiduciary structure and documents do not conflict with plan practices;
- review fees and expenses at least annually to make sure the plan is not charged for costs that should be allocated to the plan sponsor; and
- accurately document all meeting conversations and decisions and recommendations made by outside service providers.
“ERISA class action lawsuits are not confined to the largest employers. Employers and plans of all sizes are vulnerable,” the authors wrote. “Particularly in times of economic transition—when layoffs, workforce adjustments, and corporate mergers and acquisitions are more likely to occur—more plan participants are willing to step forward as ERISA plaintiffs.”
The report is available online at http://www.chubb.com/businesses/csi/chubb12107.pdf.
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