The LTG Advantage: Most plan fiduciaries do not understand the personal liability inherent in this role. For that matter, many fiduciaries do not even know they are acting in a fiduciary capacity. More on liability
LTG Capital helps minimize fiduciary liablity through:
Maintaining comprehensive knowledge of standards, laws, and trust provisions
Diversifying assets to specific risk/return profile
Preparing/reviewing/updating the Investment Policy Statement
Selecting, using, and monitoring "prudent experts" (money managers)
Controlling, accounting, and justifying all plan expenses
Preventing conflicts of interest and prohibited transactions
How One Becomes Named a Fiduciary
Typically, a fiduciary includes anyone who participates in making decisions regarding the plan, such as plan trustees, investment committee members, money managers, custodians, CFOs, HR directors, and investment advisors.
Potential Liabilities for a Plan Fiduciary
Liabilities associated with failed fiduciary decision-making extend from plan disqualification, monetary penalties, and incarceration, to plan participant lawsuits that may put the personal assets of the plan fiduciaries at risk. Fiduciaries are personally responsible for the retirement plans they oversee.
There is a significant history of court cases in which plan fiduciaries as individuals, not corporations, where sued for breaches of fiduciary duty. "Breach" in this context means "error." These individuals were sued by their employees for not knowing what processes to follow. (For instance, Hurd v. Ross; Herman v. Schwent; Rhoades v. Casey; Bowles v. Reade are all cases in which individuals faced personal liability under ERISA, UPIA or MPERS.)
LTG Capital's fiduciary consulting services help protect our clients from all of the above.
The following are 2002 statistics:
10,000
Private ERISA fiduciary lawsuits
5,000
DOL ERISA fiduciary lawsuits
3,200
Arbitration cases involving fiduciary breaches
18,200
*Total
*These numbers have increased at a rate of 25% per year over the last 2 years.
