Fiduciary duties under ERISA are often referred to in caselaw as "the highest known to law” (Donovan v. Bierwirth, 680 F.2d 263, 272 (2d Cir. 1982)). And yet, many individuals are not aware that they are engaged in activities which would render them to be fiduciaries under ERISA.
Under ERISA, individuals can become fiduciaries in three ways: (1) By being named in plan documents (2) by being designated according to procedures in plan documents, or (2) by being engaged in activities for a plan which are fiduciary in nature (referred to as "Functional Fiducaries"). It is this Functional Fiduciary status which can often take people by surprise.
The DOL has a couple of Interpretative Bulletins online which provide some guidance for determining who is a fiduciary under ERISA:
29 CFR 2509.75-5 - Questions and answers relating to fiduciary responsibility
In addition, the DOL last week in its webcast made these informal comments about the subject of who is a fiduciary under ERISA:
(1) The DOL noted that services providers may become fiduciaries if they provide individualized advice (even though their provider contracts might provide that they are not fiduciaries). The examples given by the DOL were accountants who provide investment advice to Trustees on a regular basis or recordkeepers who make final determinations regarding eligibility for benefits.
(2) The DOL also noted that giving investment advice is a fiduciary act, while providing investment education is not. However, monitoring those who provide investment education to participants is a fiduciary act, according to the DOL.
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