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Under ERISA, the persons with overall responsibility for managing
the plan’s assets and overseeing its day-to-day operations are the
plan trustee or trustees and the plan administrator. The
trustees and administrator are required to be identified in the
plan’s Summary Plan Description. In many cases, the company
that sponsors the plan is the administrator and also appoints the
persons who serve as trustees.
If
you have questions you may contact one of our benefits advisors at the
EBSA office nearest you, or contact EBSA by email.
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Plan officials are required to administer ERISA-covered employee
benefit plans according to the plan’s governing documents and
records. Where records are lost or destroyed, that does not
discharge plan officials from their duty to administer the plan in
accordance with its governing instruments, and to provide
participants
and beneficiaries with the benefits they are due under the plan.
When
important plan documents are lost or destroyed, plan officials
should use the most reliable evidence available in continuing to
operate and administer the plan. Plan officials should
determine whether they have access to records or documents from
which the lost or destroyed records could be reconstructed.
For example, service providers or participants may have copies of
important plan documents. Where a copy of a governing document
cannot be located or reasonably reconstructed, the Summary Plan
Description or other summary documents may constitute the most
reliable evidence of the relevant plan terms.
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In the department’s view, a service provider’s reduction,
abatement or waiver of fees charged to a plan, without receipt or
promise of any consideration from the plan, would not be a
transaction prohibited under section 406 of ERISA.
Granting a plan a delay in payment of fees may constitute an
extension of credit subject to ERISA section 406(a)(1)(B). The
department, however notes that Prohibited Transaction Exemption
80-26, 65 FR 17540 (Apr. 3, 2000) (as amended), provides that the
restrictions of ERISA sections 406(a)(1)(B) and (D) and 406(b)(2)
shall not apply to unsecured, interest free loans to a plan for the
payment of ordinary operating expenses to the plan. In the department’s view, under the circumstances of the events of
September 11th, a delay in payment of fees for which delay the
service provider receives no consideration, if prohibited at all,
would be covered under the exemption as an interest free loan to the
plan for payment of ordinary operating expenses.
Further,
the department on September 28, 2001 published at 66 FR 49703, Proposed
Amendment to Prohibited Transaction Exemption 80-26 for other
situations resulting from the events of September 11th which may
have caused temporary cash flow problems that affect essential plan
operations. Such interest free loans or extensions of
credit under the new exemption could be used to facilitate transfers
of all or part of a participant's account from one investment option
to another, participant loans, temporary overdraft protection or
participant withdrawal requests.
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What procedures a plan should follow depends on the terms of the plan and the type of benefit claim
involved. For example, for insured benefits, the insurance
company might be the party responsible for deciding benefit claims
and would generally look to the insurance contract or policy for any
requirements. In cases involving benefits that are not
insured, such as benefits paid out of a trust or from the
employer’s assets, the plan trustees or administrator has
discretion to choose the procedures to use in determining whether a
death has occurred unless the plan document provides for such
procedures. In such a case, the trustee or administrator would
not be required to follow a state law that might be interpreted to
require a delay in the determination of death. Rather, a plan
administrator could rely on evidence other than a death certificate in making a determination
that a death has occurred (if it finds that it is prudent to do so),
such as proof that a person cannot be located and that, based on the
facts determined by the administrator, it is reasonably certain that
a missing person is deceased as a result of the events of September
11th.
In
this regard, Governor George Pataki of New York signed an executive
order on September
24, 2001, which includes alternative death
certificate requirements that are intended to help families of
missing victims of the World Trade Center attack cope with estate
and financial matters.
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In deciding to pay any benefit to a potential beneficiary, the
administrator must act prudently, in the interests of participants
and beneficiaries under the relevant facts and circumstances, and
must use reasonable procedures in making determinations as to who is a
participant’s beneficiary.
When
an administrator receives evidence of claims of beneficiary status,
the administrator must take reasonable steps to determine its
credibility. If the administrator finds there are credible
questions as to the validity of the evidence, the administrator must decide how best to resolve the
question of the validity of the evidence without inappropriately
spending plan assets. The appropriate course of action will depend
on the actual facts and circumstances of the particular case.
Where
ERISA Section 205 governs the plan, a surviving spouse is deemed to
be the participant’s beneficiary unless there is no surviving
spouse or the surviving spouse has consented to a waiver of benefits
in the manner required under ERISA Section 205(c)(2). If a
plan administrator receives information calling into question that
the participant’s surviving spouse is the beneficiary, the plan
administrator must take reasonable steps to determine the
credibility of that information to decide the claim for benefits.
In making such a determination, the plan administrator in its
discretion may rely on a document that appears to be a duplicate of
a participant’s beneficiary designation if the plan administrator
has adopted and uses reasonable procedures designed to detect a
forgery.
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EBSA recognizes that plans, plan fiduciaries, employers, labor
organizations, and service providers affected by the events of
September 11th will encounter a wide variety of compliance-related
issues and concerns over the next few months. While there may
be instances when full compliance with Title I disclosure
obligations may not be possible, plan administrators should make
appropriate efforts under the circumstances to act reasonably,
prudently and in the interest of the plan’s participants and
beneficiaries who rely on their health, pension and other benefits
for their physical and economic well-being.
The Department of Labor, the Internal Revenue Service and the Pension Benefit
Guaranty Corporation granted an extension to plan administrators,
employers and other entities who file the Form 5500 and Form 5500-EZ
as a result of the September 11th terrorist
attacks. Information regarding the extension is available at
the EFAST Web site or by calling
EBSA's Toll-Free Employee & Employer Hotline number, 1.866.444.EBSA
(3272). Questions and Answers relating to the
extension are also available.
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