Archived News Release Caution: Information may be out of date.
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Release Date: 12/17/2004
Release Number: 04-11
Contact Name: Gloria Della
Phone Number: 202.693.8664
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Washington, DC - The U.S. Department of
Labor’s Employee Benefits Security Administration (EBSA) today released
Field Assistance Bulletin (FAB) 2004-03 providing guidance to field
investigators on the responsibilities of a directed trustee under the
Employee Retirement Income Security Act (ERISA). |
Consistent
with the department’s brief in the Enron case, the FAB clarifies that a
directed trustee is a fiduciary under ERISA, responsible for carrying out
its duties prudently and solely in the interest of the participants and
beneficiaries of employee benefit plans. The FAB also makes clear that the
named fiduciary, not the directed trustee, is primarily responsible for
ensuring the prudence of plan investment decisions. A directed trustee is
only required to question the directing fiduciary’s instructions
regarding transactions involving publicly traded securities in rare
circumstances. |
The
FAB specifically addresses the responsibilities of a directed trustee in
determining whether a direction is “proper” – consistent with the
terms of the plan and not contrary to ERISA. When a directed trustee has
non-public information regarding a security that is necessary for a
prudent decision by the directing plan fiduciary, the FAB provides that
the directed trustee has a duty to inquire about the named fiduciary’s
knowledge and consideration of the information. In the case of public
information, a directed trustee would be required to question the
instructions of the directing fiduciary only in extraordinary
circumstances. The FAB provides that a directed trustee may have to
question directions involving the purchase or holding of a security where
there are “clear and compelling public indicators” that call into
question the issuer’s viability as a going concern. |
The
FAB is part of the department’s ongoing compliance assistance program to
help employers, plan officials, service providers and others comply with
ERISA. Field Assistance Bulletins are available on the Internet at
www.dol.gov/ebsa. |
U.S. Department of Labor news releases are accessible on the Internet. The information in this news
release will be made available in alternate format upon request (large
print, Braille, audio tape or disc) from the Central Office for Assistive
Services and Technology. Please specify which news release when placing
your request. Call 202.693.7773 or TTY 202.693.7755. |
Archived News Release Caution: Information may be out of date.
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