I am the Settlor of a Retirement Plan…What do I do Now?
Last Updated: October 27, 2015
Protecting the Employer – Part 2Part 1 of this series looked at the trust law roots of the Employee Retirement Income Security Act of 1974 (“ERISA”), focusing on determining who is considered the “settlor” of a retirement plan. Once the individual or group of individuals acting as the settlor of a plan have been identified, it is important to understand what their role is, and equally important what their role is not. It is first important to understand that settlor decisions are not fiduciary decisions, and do not carry with them the same high standards of conduct that fiduciary decisions do. Settlor decisions are business decisions that do not, for example, have to be made in the best interest of plan participants. Settlor decisions include:
- The decision to sponsor a plan
- The decision to voluntarily amend a plan
- The decision about what benefits to provide through the plan
- The decision to terminate a plan