Colonial Surety Insight

Text Box: The new retirement plan environment referred to in the headline includes a recent case unanimously decided by the U.S. Supreme Court that has significant implications for plan fiduciaries. On February 20, 2008 in LaRue v. DeWolff Boberg & Associates, Inc., et al., the Court ruled 9-0 that Section 502(a)(2) of the Employee Retirement Income Security Act of 1974, as amended (ERISA), “does not provide a remedy for individual injuries distinct from plan injuries,” but that provision “does authorize recovery for fiduciary breaches that impair the value of plan assets” in one or more, but not all, participants’ accounts. In non-legalese, the Court held that individual participants in a defined contribution plan can sue for a breach of fiduciary duty that results in a loss to the participant’s own account,

Text Box: even if not all participants’ accounts have similar losses. No one knows, of course, whether we will see an increase in lawsuits against fiduciaries, but many ERISA attorneys predict that LaRue’s victory means that there is likely to be a significant increase in litigation involving 401(k) plans, and that plan fiduciaries may be confronted with a variety of claims brought by plan participants

Text Box: seeking to recover losses to their individual accounts. In this new environment, we think that fiduciaries should think in risk management terms and consider whether they should purchase fiduciary liability insurance. This newsletter is published for information purposes only and should not be considered tax or legal advise.

Text Box: Supreme Court Rules 401(k) Participants Can Sue

Text Box: Special points of interest: DOL Issues Final Form 5500 Regulations The DOL, IRS and PBGC have released final annual reporting and disclosure regulations which, among other things, postpone the mandatory electronic filing requirement for Form 5500 for an additional year. They have also revised the 2009 forms to accommodate e-filing by ERISA covered pension and welfare benefit plans. Final Regulations

Colonial Surety Insight

Text Box: Fiduciary Liability Insurance Coverage is available from Colonial Surety as an endorsement to our ERISA/

Text Box: Fidelity bonds for qualifying plan assets. This coverage will protect plan sponsors and trustees from personal

Text Box: liability for defense costs and penalties if they are sued for fiduciary decisions. Why do I need Fiduciary Liability?

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