Coverage Scenarios

There are numerous situations that may cause a fiduciary liability claim to be filed. Below are some possible scenarios.

ERISA Violations

A shoe factory employee files suit against a pension plan and its trustees alleging violation of ERISA guidelines in conjunction with the adoption of plan amendments. The employee sought benefits due and reimbursement for defense fees. The courts found in favor of the employee on all counts.

Breach of Duty

Beneficiaries of a corporate pension plan brought suit against the plan trustees alleging breach of duty. The beneficiaries alleged that the plan trustees paid a disproportionate amount of money for their liabilty insurance and were seeking reimbursement to the pension fund in an amount of $90,000. After year-long court proceedings, the case was settled in favor of the beneficiaries.

Benefits Error

A class action suit is filed by all the past and present employees of a large manufacturing firm. The suit alleges that the plan administrator and the sponsoring organization calculated the pension benefits of the plan in error. When accounting procedures were examined, it was discovered that the sponsor organization had used social security estimates to generate their figures. These estimates turned out to be wrong, so all the pension benefits assigned to the employees were called into question. The full investigation and court case dragged on for almost 2 years.