So, You've Been Appointed to the Retirement Plan Committee

Are you responsible for the actions of the prior members of the retirement plan committee? Fiduciaries have a duty to remedy the continuing effect of their predecessors’ breach if they know of the breach. But what type of knowledge is required for liability to attach? In Fuller v. SunTrust Banks, Inc., a federal court evaluated whether actual or constructive knowledge is sufficient. The court found that successor fiduciaries must have actual knowledge of their predecessors’ breach to be held liable. In so finding, the court rejected plaintiffs’ reliance on general trust law principles which adopt a constructive knowledge standard, and favored the approach endorsed by the Department of Labor and other courts which require actual knowledge. Although the court’s reasoning is arguably circular at times and may be appealed, the decision is a win for today’s plan fiduciaries seeking to avoid liability for their predecessors’ mistakes.

KMK Law articles and blog posts are intended to bring attention to developments in the law and are not intended as legal advice for any particular client or any particular situation. The laws/regulations and interpretations thereof are evolving and subject to change. Although we will attempt to update articles/blog posts for material changes, the article/post may not reflect changes in laws/regulations or guidance issued after the date the article/post was published. Please consult with counsel of your choice regarding any specific questions you may have.

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