Don’t miss this interesting article by PlanSponsor.com called “Lawyering Up” discussing how ERISA lawsuits are at an “all-time high.” ERISA experts make the following comments about the up-tick in lawsuits as follows:
What should plan fiduciaries be doing in light of the trend? Hiring a qualified ERISA attorney to advise the plan sponsor and fiduciaries about best practices and “prudent process and procedures” is really the best first step that a plan sponsor can take in protecting the company and fiduciaries from liability due to unexpected ERISA lawsuits. Burying one’s head in the sand is not an option, as the fiduciaries mentioned in this previous post here found out the hard way.
In addition, it is always amazing to me how little attention is given to plan documents and communication materials that are really the source for determining the fiduciary structure of an ERISA plan. If you have read and kept up with this “evolving” ERISA law, you will note that plaintiffs’ attorneys do a good job of exploiting and uncovering all of the weaknesses of a plan document in making their case for a fiduciary breach. (For instance, the plan document will be the starting point for determining whether or not a board of directors will be considered to be fiduciaries under ERISA.) In fact, many documents are never reviewed by an attorney experienced in ERISA, and many employers are not even aware of the weaknesses in their documentation and materials until they are uncovered in a lawsuit.