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What's your fiduciary liability IQ? If it needs to be raised, and it probably does, just follow these steps.

Publication: Directors & Boards
Publication Date: 22-SEP-09 		Format: Online
Delivery: Immediate Online Access
Full Article Title: What's your fiduciary liability IQ? If it needs to be raised, and it probably does, just follow these steps.(RISK MATTERS)

Article Excerpt
CALL IT a ripple effect of America's economic slump. Companies are facing increasing risk of fiduciary liability lawsuits from disenchanted employees who are seeing their retirement benefits diminished, their employer matching contributions eliminated, or their benefits reduced or terminated.

If the overall economic impact on investment returns isn't enough to make plaintiff attorneys cheer, regulatory and legal changes have also helped land today's fiduciaries in the hot seat. Changes in the laws governing employee benefit plans such as the Employee Retirement Income Security Act (ERISA), the Pension Protection Act of 2006, the Consolidated Omnibus Budget Reconciliation Act (COBRA), and the Health Insurance Portability and Accountability Act (HIPAA), make it even more challenging for fiduciaries to navigate. In addition, the U.S. Supreme Court ruling in 2008 in LaRue v. DeWolf makes it easier for current and former employees to sue fiduciaries.

Despite the increased exposure, fiduciary liability is often a misunderstood risk for boards in some small to midsize firms. Boards that are responsible for appointing ERISA fiduciaries to oversee their companies' benefit plans are also responsible for monitoring those appointed to serve in that capacity. If board members fail in these...

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