In December 2016, the U.S. Department of Labor (DOL) finalized new disability benefit claims regulations that apply to ERISA plans. The new regulations were originally going to be effective for claims for disability benefits filed on or after January 1, 2018. However, the DOL subsequently delayed the effective date. They are now effective for claims for disability benefits filed after April 1, 2018.
In this article, we address the question of whether a successor can become personally liable for a breach of fiduciary duty under ERISA (and the federal common law of trusts), if the breach occurred prior to the fiduciary’s appointment as trustee. We also will look into whether a successor trustee has a duty to investigate actions (or failures to act) by the prior trustee to determine whether they may constitute a fiduciary breach, prohibited transaction or other malfeasance.
ERISA's definition of "fiduciary" basically encompasses three categories of responsibility or activities with respect to an employee benefit plan. In addition to anyone who is specifically named as a fiduciary by the terms of an ERISA plan, a person is a fiduciary of a plan to the extent that he or she:
Although you already may have gotten wind of these new requirements, we want all of our plan sponsor, plan adviser and plan fiduciary clients and contacts to make sure they are on track to comply with the new participant-level investment and fee disclosure rules scheduled to take effect for some plans as soon as August 30, 2012 (or 60 days after the first day of the first plan year beginning on or after November 1, 2011, if later).