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15
CLAIM EXAMPLES THAT
SHOW WHY FIDUCIARIES NEED COVERAGE
- The
trustees of a self-insured benefit plan claimed that its
administrator was negligent in failing to properly investigate
claims, thus causing the plan to pay fraudulent claims.
- Employer
trustees of a multi-employer, self-insured benefit plan claimed
that the plan administrator, together with employee trustees,
wasted plan assets through negligent management practices.
- Trustees
brought an action against the administrator of an insured benefit
plan claiming the administrator’s selection of an insurance
company caused a substantial loss because premiums were excessive.
- The
Department of Labor brought a claim against plan Fiduciaries to
recover severance pay granted to a long-time employee who was,
after the adoption of ERISA, unemployable under Section 411 of the
Act.
- A
class of beneficiaries of a self-insured pension fund brought a
claim against the Fiduciaries alleging depletion of the fund by
payment of benefits to persons who were not qualified.
- A
beneficiary brought a suit against the plan and its trustees
claiming the Fiduciaries permitted Group coverage to lapse.
- A
class of beneficiaries brought suit against the plan Fiduciaries
claiming personal liability as the result of a negligent amendment
of the plan.
- A
beneficiary of a terminated plan claimed Fiduciaries were
negligent in identifying liabilities of the trust and caused him
to miss out on the distribution of assets.
- Beneficiaries
of a self-insured plan claimed that the sole sponsor erred in
computing eligibility, causing an overpayment of benefits.
- The
Department of Labor brought a claim against fiduciaries alleging
that negligent investment practices needlessly depleted plan
assets.
- A
dispute between employer/employee trustees produced charges and
counter-charges of negligent investment decisions with each
attempting to establish personal liability on the part of certain
individuals.
- A
beneficiary sued the plan trustees individually in an attempt to
recover a benefit lost because of inadequate instruction.
- The
Department of Labor claimed the trustees’ failure to sell the
employer/sponsors stock caused material depletion of plan assets.
- The
beneficiaries of a bankrupt plan brought action against the
administrator to recover losses incurred when the
employer/sponsors defaulted on loans made pre-ERISA.
- A
beneficiary sought compensation from the plan administrator for a
pension lost by reason of incorrect interpretation of eligibility.
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