Monthly SHRM Meeting Agenda:

Wednesday, June 9th, 2010

Location:
Corporate & Community Education Center (MAP)
1600 Osgood Street, North Andover, MA

Speakers:
Debra Dyleski-Najjar, Esq. and Charles G. Humphrey, Esq.

Cost: This event is free to members and $25 to non members. Guests may attend the first two meetings at no charge.

Topic: Fiduciary Duties of Plan Sponsors: What Your Third Party Administrator and Other Service Providers Do Not Tell You

Employers who sponsor pension plans, including 401(k) plans, and health and welfare benefit plans are fiduciaries subject to standards of conduct under the Employee Retirement Income Security Act (ERISA).   Fiduciaries have important responsibilities under ERISA, and many plan sponsors fail to understand these obligations. They also fail to understand that these fiduciary responsibilities cannot be eliminated by delegation to service providers and third party administrators.

ERISA imposes personal and criminal liability on people who are fiduciaries. Because ERISA uses a functional definition, any corporate officer or employee with oversight or administration of a plan is potentially a fiduciary. Criminal penalties for individuals can be up to $100,000 and ten years in prison. Criminal penalties for corporations can be up to $500,000.

Fiduciaries are subject to heavy regulation by the Labor Department, IRS, and PBGC and may be sued by participants and the Labor Department for violations of ERISA. The number of DOL investigations is increasing and the average cost of a settlement is approximately $90,000 -- not including legal and other advisor fees. The plaintiff’s bar is increasingly active and knowledgeable. Approximately 10,000 ERISA-based lawsuits are filed each year. Civil damages and penalties can be unlimited, requiring plan fiduciaries to make up plan losses and sometimes requiring the fiduciary to pay attorney fees. According to one survey, the average cost in 2004 of defending an ERISA claim was $365,000. 

There is no escape from this liability.  It cannot be “delegated away” to internal staff or service providers such as consultants, record keepers, actuaries, accountants or attorneys. For example, even when plan investment authority is put in the hands of an investment manager, the appointing fiduciary will be responsible for the selection and monitoring of the investment manager.

Since ENRON, there has been a greater emphasis on corporate accountability (Sarbanes-Oxley). This trend is exacerbated by the current financial debacle.  Added to a baby boomer generation that is ill-prepared to retire (and looking for someone to blame). Plan Sponsors can reasonably expect more and tighter regulation, more regulatory focus on executives, and more litigation.

This seminar will help you:

• Understand your fiduciary obligations under ERISA.

• Identify the most common pitfalls.

• See how potentially costly and damaging it is to continue to neglect fiduciary responsibilities. Potential costs may include fines, excise taxes, embarrassment, jeopardized employee relations, and possible litigation exposure.  

• Get several recommendations for improvement of fiduciary oversight of plan service providers.

 

Who Should Attend?

• Anyone within a company who touches the day-to-day operations of an ERISA plan, such as HR representatives, and finance personnel.

• Plan/investment committee members and executives who are responsible for the overall governance of the plan, and are the most liable regardless of who is directly involved.

• Auditors from accounting firms who wonder if only their clients have these problems.

• Anyone who is involved in governance of a retirement plan or other employee benefit plans.

 

About our Speakers:

Debra Dyleski-Najjar, Esq. is president and founder of the Najjar Employment Law Group, PC.  She has practiced employment law for over twenty-five (25) years, and was an equity partner in the Boston office of Hinckley Allen & Snyder, a large regional law firm, with offices in Boston, Providence and Concord. In April, 2008, she founded The Najjar Employment Law Group, PC as a labor, employment and benefits boutique firm designed to provide top quality advice, as well as litigation expertise, for employers at reasonable rates.

Due to Ms. Najjar’s significant professional accomplishments, in 2007, she was nominated by her peers and inducted as a Fellow of the College of Labor and Employment Lawyers.   She also is a member of the 2005 graduating class of Leadership New Hampshire, and has been recognized as a New England Super Lawyer each year since 2007, a recognition bestowed on only the top 5% of attorneys in New England. She has extensive experience representing employers in litigation under ERISA including defending claims in bankruptcy relating to pension plan termination, upholding the termination of retiree health benefit plans, and defending claims of fiduciary breach and claims relating to withdrawal from multi-employer pension plans. 

Charles G. Humphrey, Esq.   Mr. Humphrey is a senior attorney in The Najjar Employment Law Group, PC and has over thirty (30) years experience as a pension and benefits attorney.  For many years, he worked for the United States Department of Labor in Pension and Welfare Benefits Programs, and in the Employee Plans Division of the Internal Revenue Service. Prior to joining The Najjar Employment Law Group, he founded a fiduciary risk management benefits consulting firm. He is a member of the IRS Northeast Pension Liaison Committee, a former member of the IRS National Determination Letter Committee, and a member of the American Bar Association Tax Section. 

Mr. Humphrey has extensive experience representing private and public companies, governmental and not-for-profit, in a wide range of benefit issues including qualified retirement, executive compensation, and health and welfare benefit plans.  He consults on plan design and taxation, plan administration compliance and ERISA Title I fiduciary issues. He represents clients before the IRS and Labor Department in agency examinations, ruling requests and in obtaining relief under various agency correction programs. Mr. Humphrey also assists clients with employee benefit issues in corporate mergers and acquisitions, in pension plan termination and in the structuring of private equity and similar transactions. Mr. Humphrey is admitted to practice in New York.

 

Session Format:

8:00-8:30 Registration
8:30-9:00 Welcome to New members and guests; Networking
9:00-9:10 Sponsor
9:10-10:15 Program
10:15-10:30 SHRM/GMVHRA business

Our Sponsor for this event is:

About Aon Consulting

Aon Consulting is among the top global human capital consulting firms, with more than 6,300 professionals in 229 offices and 98 countries worldwide. Aon Consulting works with organizations to improve business performance and shape the workplace of the future through employee benefits, talent management and rewards strategies and solutions.

It was named the best employee benefit consulting firm by the readers of Business Insurance magazine in 2006, 2007, 2008 and 2009.

For more information on Aon, please visit www.aon.mediaroom.com.

  
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