In short, the answer is YES.
Every week, new lawsuits are filed against companies and individuals, claiming that one or more breaches of fiduciary duties have been committed in connection with duties owed to employee benefit plans subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). Many such cases seek damages of $1 million or more.
While there is a broad spectrum of alleged failures stated in connection with the ERISA-related lawsuits, there are common themes among the lawsuits. Most ERISA lawsuits allege that one or more employee benefit plan fiduciaries took action – or failed to take an action – relating to the benefit plan or its assets that was not solely in the interest of the affected plan and plan participants.
Employee benefit plan fiduciaries are required to comply with ERISA requirements relating to conduct. These ERISA requirements are known as “fiduciary duties”.
In addition to institutional professional fiduciaries who are very knowledgeable regarding their ERISA-related responsibilities, many individual employees, who may not be as knowledgeable about ERISA requirements, agree to serve in fiduciary capacities with respect to both employer-provided pension (including 401(k) and employee stock ownership) plans and health and welfare benefit plans.
Under ERISA, an individual is considered to be a fiduciary in connection with an employee benefit plan, including a plan sponsored by his or her employer, to the extent such individual has any discretionary authority or control relating to employee benefit plan management, administration or assets.
It is very important for employers to provide fiduciary training for all plan fiduciaries on a regular (not less than annual) basis. This training should also be provided for any individuals who become plan fiduciaries following the annual training.
Properly conducted ERISA fiduciary training for all individuals who serve any role with respect to an employee benefit plan serves many objectives, including:
- Assisting and educating employees in determining fiduciary status under ERISA;
- Guiding employees who actually are fiduciaries in meeting their fiduciary responsibilities under ERISA and, hopefully, avoiding lawsuits for their actions or failure to take an action;
- Potentially avoiding conflict scenarios between employer and plan service, which also can result in a lawsuit; and
- Guiding plan fiduciaries in properly documenting any actions taken in a fiduciary capacity.
Fraser Stryker’s Employee Benefits and ERISA law practice group provide fiduciary training for fiduciaries serving all types of employee benefit plans. The training is customized for the employer and can be provided virtually or in person.
Author: Emily Langdon
This article has been prepared for general information purposes and (1) does not create or constitute an attorney-client relationship, (2) is not intended as a solicitation, (3) is not intended to convey or constitute legal advice, and (4) is not a substitute for obtaining legal advice from a qualified attorney. Always seek professional counsel prior to taking action.