Board Resolution - Amendment Authority

[waid10]

My company currently has several retirement and health plans. Whenever a change to a plan needs to be made, a board resolution must go to the Board of Directors. It is very difficult to get on the docket for the Board meetings. And the Board members often don't think they need to deal with certain ministerial plan changes. Most of our plans currently state that amendments to the plan are to be made by the employer. We have interpreted that to mean the Board of Directors. So all plan changes, major and minor, have been going to the Board for approval.

So I have been assigned to work on putting together a document that lists all types of plan changes and who has the authority to make them. Then we will try to get the Board to formally delegate authority to subcommittees or individuals (Finance Committee or VP of HR) to make those changes. Knowing our Board, my document and the types of changes permitted to be made by someone other than the Board will need to be finely defined.

Has anyone tried to put anything like this together? Any recommendations on sources or websites?

I know that if I say that "minor plan amendments" can be made by the VP of HR or Finance Committee, the Board will ask what "minor" means. So I will likely need to come up with a list of all types of plan changes. Has anyone seen this type of list?

Please help.

Thanks.

[david rigby]

You don't indicate how large is the company, or the Board. Not a direct response to your question, but I suggest being very careful about delegating any "amending authority" to an individual. Almost always better to use a committee. Likely, some of the attorneys who frequent these message boards will have other input.

[waid10]

It is a large company, but some of the small changes should be able to be made by the VP of HR.

[Everett Moreland]

A standard list I often use is to give a designated officer the power to amend the plan to clarify the plan, to facilitate the administration of the plan, and to make changes adapting the plan to the requirements of law, changes in law, or the terms of a collective bargaining agreement, all as determined in the designated officer's discretion.

[mbozek]

Most employers delegate authority to sign welfare plan contracts/amendments to corporate officers without any oversight by the board because board members dont consider employee benefit plans to be important enough to review in the limited amount of time allowed for board meetings. Pension plan matters are delegated to corp officers unless there is a material effect on employer's financial condition.

[QDROphile]

A large company would probably find it worthwhile to have its legal counsel be involved in establishing or affecting corporate governance. Among other things, someone should consider who is covered by applicable insurance for various functions and how to implement and document the delegation of authority.

[AndyH]

Note that plan language may need to be altered. Our VS plans, for example, specifically state that any amendments must be approved by "formal action of the Board of Directors". So it may be more than an issue of interpretation.

[mbozek]

Boards can delegate authority to sign instruments to corporate officers or one member of the board. Alternatively a corporate officer can sign on behalf of the corporation subject to ratification by the board at a later date. Plan amendment is not required where state law permits delegation of authority to act.