ERISA Legal News - 4th Quarter 2011 - Volume 2, Number 4


In this issue: Fiduciary or Not Fiduciary? That is a Difficult Question; Select Case Summaries; and Dickinson Wright ERISA Attorneys.

Excerpt from "Fiduciary or Not...?":

If you are an employer, plan administrator, or financial advisor, how can you tell whether you are a fiduciary as defined by ERISA? There is a myriad of case law addressing this exact issue, but still, bright line rules are difficult to identify.

Fiduciary status can be created in two ways. First, fiduciary status is created if a person or persons are expressly named as fiduciaries in the plan documents. 29 U.S.C. § 1102 (a). If not named specifically in the plan, fiduciary status can be created through action to the extent a party: (1) exercises any discretionary authority or control regarding management of a plan or exercises any authority or control respecting management or disposition of its assets; or (2) renders investment advice for a fee or other compensation, direct or indirect, with respect to any moneys or other property of such plan, or has any authority or responsibility to do so; or (3) has any discretionary authority or discretionary responsibility in the administration of such plan. 29 U.S.C. § 1002(21)(A). Thus, the concept of fiduciary under ERISA is broader than common law concept of trustee and it includes not only those named as fiduciaries in the plan or those who, pursuant to procedure specified in the plan, are identified as fiduciaries, but any individual who de facto performs specified discretionary functions with respect to management, assets, or administration of plan. Custer v. Sweeney, 89 F.3d 1156, 1161 (4th Cir. 1996).

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