Ninth Circuit Rejects Funds’ “Plan Assets” Theory
Trustees of multi-employer employee benefit trust funds sued the employer's owners, who were also company officers, claiming breach of fiduciary duty and seeking unpaid contributions allegedly owed pursuant to contracts governing the benefit plans under Employee Retirement Income Security Act (ERISA). The funds asserted that unpaid contributions to the plan owed by the company were “plan assets” governed by ERISA. They sought recovery from the company as well as the officers in an individual capacity. The Appellate Court affirmed dismissal of the case because it found the owners were not fiduciaries under ERISA with respect to the unpaid contributions. Employers and executives alike can rest more easily that such plan documents may not classify unpaid contributions as plan assets thus invoking fiduciary status on an employer, its owners and officers.