Restorative Payments

[Guest kveldenator]

Has anyone dealt with the issue of a fiduciary liable for breach of fiduciary duty waiving his share of benefits from restorative payments to the plan? The result would be a smaller restorative payment, but would still restore participant accounts properly. A DOL agent commented that he had seen guidance disallowing this type of waiver, but I have not been able to find anything. I'm sure he would like to disallow it because it would also reduce the amount of any penalty. I did find some PLRs that approved restorative payments with this structure but nothing from the DOL. Any thoughts or citations?

[Kevin C]

Here is a news release where the DOL sought using an offset of a fiduciary's balance as part of the correction to restore balances.

http://www.dol.gov/ebsa/newsroom/2010/10-354-ATL.html

The only time I've had this come up was a case we became involved with after the DOL came calling. The proposed correction included an offset of the owner's benefit. The DOL response was basically that it could be done either with or without the offset, but they would make it more difficult and more expensive penalty-wise unless the entire amount was restored. The fiduciary restored the full amount.