Anyone with responsibility for health, benefit, disability, severance, education or other benefit plans is a “fiduciary.” And fiduciaries can be held personally liable for plan errors under the Employee Retirement Income Security Act (ERISA). According to Sherwin Kaplan, an attorney with Nixon Peabody in Washington, D.C., employers should take these steps to avoid errors that could subject a fiduciary to liability:
- Adopt good written policies and procedures for each plan—and follow them.
- Document all significant decisions with and filed memos.
- Always be able to explain why you took (or didn’t take) any significant action.
- Conduct a formal bidding process for benefit providers.
- Make sure anyone communicating with employees on behalf of the plan are providing accurate information.