Team & Fiduciary Responsibility | Attorney
Role
If you are the attorney, your role is to:
- Provide legal advice concerning the design of the plan.
- Assist with the preparation and review of the plan documents and any amendments to the plan.
- Provide legal advice concerning the operation of the plan (including assisting the employer or the plan administrator with the correction of any defects) and cautioning the plan's fiduciaries against prohibited transactions.
- Assist the employer and the plan administrator with government audits and investigations.
As the employer's employee benefits attorney, you are expected to provide expert advice on the overall strategy and development of the plan itself, plus answer any questions surrounding the roles and responsibilities of all parties involved. You are expected to review plan and trust documents, participant communications, the overall operation of the plan and, most crucially, any audits or investigations by the Internal Revenue Service or the Department of Labor.
Many of the laws applicable to retirement plans are extremely complex. A violation can result in fines, otherwise avoidable excise taxes, and even the disqualification of the entire plan to the detriment of the employer and the participants. More and more frequently, you may be asked to work with the plan administrator and the TPA to determine if a plan compliance issue has occurred and the best way to correct any identified problems.
Attorney Liability In General
Much like the situation of an actuary or an accountant, an attorney is in business to provide specific plan related services (in this case, legal) to plan sponsors and plan administrators. In most cases, the attorney is not a plan fiduciary.
In rare cases, an attorney that exercises discretion and control over the plan, or some part of it, may become a plan fiduciary. The courts often examine the issues of differing fact patterns to determine who is and who is not a plan fiduciary and although they seem to be becoming more and more liberal in their interpretations of facts the underlying rule remains the same. Discretion and control over the plan, its operation and its terms are the keys.
Limiting Attorney Liability
The best way for an attorney to control and limit its ERISA liability is to educate the plan sponsor, the trustee and the plan administrator about their roles regarding the operation and administration of the plan and to make sure it does not make discretionary decisions with respect to the plan. In order to keep the respective roles and duties straight, we strongly recommend that the attorney use a written service agreement that clearly spells out its role, its services, and most importantly, those responsibilities that do not belong to it but rather to the other parties.