Fiduciary Responsibility: Questions and Answers

ALTHOUGH IT IS PERMISSIBLE TO NAME A COMPANY AS A NAMED FIDUCIARY, IT IS NOT WISE TO DO SO. ONE PURPOSE OF THE NAMED FUDICIARY IS TO IDENTIFY AN INDIVIDUAL TO WHOM PARTICIPANTS CAN GO WITH PROBLEMS. ALSO, IF THE COMPANY IS NAMED AS FIDUCIARY, SOME SORT OF ATTRIBUTION MAY RUN THROUGH THE CORPORATE STRUCTURE TO THE BOARD-OF-DIRECTORS, WHO SHOULD HAVE PROTECTION. A CONTRARY VIEW STATES THAT SINCE THE COMPANY WILL BE LIABLE UNDER SOME CIRCUMSTANCES, AND THE CORPORATE TREASURY IS EXPOSED, AT LEAST THE COMPANY SHOULD BE THE PLAN SPONSOR, WITH RESPONSIBILITIES DEFINED AS THOSE THINGS WHICH REALLY ONLY THE CORPORATE BOARD OF DIRECTORS CAN DECIDE. WHETHER OR NOT THE FIDUCIARY ACTED IN A PRUDENT MANNER IS UP TO THE JURY, WHICH WILL ALSO DECIDE THE DEGREE TO WHICH IT WILL DEPEND FOR ITS DETERMINATIONS ON HINDSIGHT.