Law Offices of Mauro Fiore, Jr.
Call for a free consultation
Toll-free: 866-583-9564 Local: 626-593-9031
Se Habla Español
SE HABLA ESPAÑOL free consultation

ERISA fiduciaries and their outsourcing

  • Rated By Super Lawyers | Mauro Fiore, Jr.| Selected in 2017 | Thomson Reuters
  • Consumer Attorneys Association of Los Angeles | CAALA
  • TLC Los Angeles Trial Lawyers’ Charities

When Californians choose to set up certain retirement plans, they are not without safeguards established by the federal government. The Employee Retirement Income Security Act of 1974 (ERISA) mandates certain minimums standards, which must be complied with by plan administrators in the private sector. ERISA protects individuals by requiring those who control plans to be held to the highest fiduciary standards. The law also requires that individual participants be kept informed about their plans and able to submit grievances in order to secure their plan benefits. In the event that a fiduciary breaches certain duties outlined under ERISA, the same is liable to an individual participant for their breaches. A person who sues under the law may be entitled to attorney fees.   

Under ERISA, the person who manages and controls the plan is required to administer it according to the requirements of law, ensure the plan functions properly, and make prudent investments with the funds held in trust. As reported by the Advisory Council on Employee Welfare and Pension Benefit Plans, many of the duties of trustees are often outsourced, especially those dealing with investment and administration. Where matters pertaining to investments, including strategy, selection, management and allocation are outsourced, a co-fiduciary may become jointly and severally liable for a breach.

Areas of outsourcing employed by plan administrators often include preparing required ERISA government forms and keeping records. Also outsourced are the processing of contributions, distribution and participant claims for benefits. Access to better technology is one of the stated reasons for outsourcing recordkeeping, transactions, reporting and plan access.

Participants in California may be leery upon learning that several “hands” have touched their plans. However, the duties imposed on plan administrators by ERISA as a practical matter may not only necessitate outsourcing but also prove to be a benefit to individual participants.

No Comments

Leave a comment
Comment Information

Monrovia Office
136 E. Lemon Ave.
Fiore Legal Building
Monrovia, CA 91016

Toll Free: 866-583-9564
Phone: 626-593-9031
Monrovia Main Office Map

West Covina Office
1901 W. Pacific Ave.
Suite 260
West Covina, CA 91790

Toll Free: 866-583-9564
Phone: 626-593-9031
West Covina Law Office Map

Los Angeles Office
10866 Wilshire Blvd.
Suite 400
Los Angeles, CA 90024

Toll Free: 866-583-9564
Phone: 626-593-9031
Los Angeles Law Office Map

Palm Desert Office
77564 Country Club Dr.
Suite 126
Palm Desert, CA 92211

Toll Free: 866-583-9564
Phone: 760-407-6780
Palm Desert Law Office Map