Protecting the personal assets of plan fiduciaries
Is Insurance important for ERISA Plan Administrators?
The Employment Retirement Income Security Act (ERISA) requires that a fiduciary of an employee benefit plan act solely in the best interest of participants and beneficiaries.
Fiduciaries can be held personally liable for any breach of their responsibilities.
Recent studies indicate significant increases in claims severity and frequency over the past several years:
The frequency of claims against fiduciaries increased threefold
during the late 1990’s. Plan fiduciaries now
surpass the medical profession as a target for litigation.
The average claim has surpassed
$800,000–up from $700,000 just five years earlier. Defense costs
during this same period rose 471%.
More than 90% of the claims are filed by plan participants. Unions,
government agencies, and other entities make up the remainder.
Nearly 50% of the claims arise out of benefits disputes. Other
issues that may give rise to legal action include administrative
errors and deficiencies in the communication of participant
