Misconceptions about ERISA 404(c)

Many Plan Fiduciaries fail to secure the statutory protection of ERISA 404(c) because they, or their advisors, either have a genuine misunderstanding of the requirements of 404(c), or have the inability to distinguish among service providers as to their abilities to help the Plan fulfill operational requirements.

Few Plan Fiduciaries have read ERISA, let alone the Department of Labor's various Regulations, Interpretative Bulletins or Field Assistance Bulletins-and this is perfectly understandable given that this should not be their area of expertise or focus. Sadly, this lack of study is also true for many Plan consultants. Most consultants have only read commentaries about ERISA rules and regulations. It is all too common to see mistakes in such commentaries.

Consequently, many Plan fiduciaries and their advisors operate under many misconceptions that only result in personal liability to the Plan fiduciary.