Bench & Bar July/August 2025

• Investment managers: Individu als or firms hired to manage the plan’s investments.

quirements, unless the documents themselves violate the law. 4. DUTY TO DIVERSIFY IN VESTMENTS: If the plan in volves investments, the fiduciary must ensure the plan’s investments are diversified to minimize the risk of large losses. 5. DUTY TO AVOID CONFLICTS OF INTEREST: Fiduciaries must avoid any actions that could create conflicts between their personal interests and those of the plan par ticipants. 10 Common examples of ERISA plan fiducia ries include: • Plan administrators: Those who manage the day-to-day opera tions of the plan.

Ongoing administration increases with the amount of discretion employers have in the amount, timing, and form of severance pay ments. A severance package that requires only a straightforward calculation for a one-time obligation will most likely not be determined to be an ERISA-covered plan. Even if a severance program itself is not a covered plan, there are still a number of requirements that must be consid ered as it relates to the existing plans of an employer. For example, the Consoli dated Omnibus Budget Reconciliation Act (“COBRA”) requires employers with 20 or more employees that offer group healthcare benefits to give employees the opportunity to elect continuing coverage if they’ve lost benefits because of a “qualifying event,” including voluntary termination, or a layoff. 11 If an employee elects COBRA cov erage, then such coverage can continue for 18 or 36 months after the date of the loss of employer group health coverage. 12 Health

Fiduciaries can be held personally liable for breaches of these duties, meaning they could be financially responsible if they fail to act in the best interest of the participants, or if they violate ERISA’s rules. This is good motivation to make sure that you, and your clients, know what they are doing when dealing with employee benefits issues. DO BENEFIT PLANS MATTER IN THE EMPLOYEE TERMINATION PROCESS? Most employers realize that their retirement and welfare plans are subject to ERISA and must comply with a variety of requirements. Still, many do not know that severance ben efits can also be an ERISA covered plan. A severance program that requires little to no ongoing administration will likely not be interpreted to be an ERISA covered plan.

• Trustees: Those who have con trol over the plan’s assets and investments.

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