I volunteer on the Board of Directors, I don't have liability, right?
I volunteer on the Board of Directors, so I don’t have liability, right?
~ Can’t Touch This in Colorado
Liability is a complicated topic. If the plan is an ERISA plan, then state law is immaterial. Compensation has zero impact on whether an individual is a fiduciary. It is role and control that are the determinants. If you can exercise control or authority over the assets or management of the plan, you are a fiduciary. Ultimately the terms of the plan document will govern, but 90 percent of the time the organization is the named fiduciary or plan administrator. Because the board controls the organization, and thus can control the plan, the members thereof are typically fiduciaries.
If you sit on a committee and partake in fiduciary decisions, you have potential liability. I would recommend fiduciary liability insurance and specifically make sure it covers all committee members regardless of their employee status.
2 legit 2 quit,
Joel Shapiro, JD, LLM
About Joel Shapiro, JD, LLM
As a former practicing ERISA attorney Joel works to ensure that plan sponsors stay fully informed on all legislative and regulatory matters. Joel earned his Bachelor of Arts from Tufts University and his Juris Doctor from Washington College of Law at the American University.