Successor Trustee duty w/ respect to prior breach

[Guest halka]

Looking for some support to my conclusion.... ERISA 405(a) deals w/ co-fiduciary liability and a fiduciary’s duty to resolve/report breach by a co-fiduciary. 409(B) says a fiduciary is not liable for a breach that occurred prior to his becoming a fiduciary. Situation: Successor Trustee of a 401(k) discovers Prior Trustee incorrectly (and w/o malice) allocated plan earnings and resulting distributions for several years. PTtee is currently an executive and major shareholder of the Company and continues as a participant in Plan. Does the STtee have the 405(a) duty to resolve/report errors?? Is Yes, would the answer be “No” if the PTtee did not still have a fiduciary role (due to his role w/ Plan Sponsor) w/ respect to the Plan? If not, why not ?? All anecdotes, cites, or guidance appreciated.

[Guest greggi39]

the successor fiduciary is not laible for a breach committed prior to him/her becoming a fiduciary. but if the successor fiduciary has knowledge of a breach and does not make a reasonable effort to remedy, he/she can be held liable. this is in the erisa fiduciary answer book, not sure the question number(not in front of me).

[rcline46]

First be sure this is a fiduciary breach!!!!

Look at RR 2002-47 and see if it is covered under any compliance program and avoid fiduciary problems.

You do not want it to be a fiduciary breach, just a math mistake in allocations!