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Breach of Fiduciary Duty? Basic Life Plan Clearly Subsidized by Voluntary Life Plan


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Is this a breach of fiduciary duty under ERISA?

Company sponsors a group term life plan. Company provides a basic life benefit at no cost to employees. Employees may purchase supplemental life.

Basic and Voluntary life are with the same insurer.

The basic life loss ratio runs pretty consistently around 150-200% per year.

Voluntary life loss ratio runs a pretty consistent loss ratio of about 30%.

It is clear that the voluntary life is subsidizing basic life, is this a breach of fiduciary duty?


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