FIDUCIARY/PENSIONS ALERT: Retained Asset Accounts Don’t Meet ERISA Asset Criteria
Beneficiaries of employee benefit plans sued claiming that the plan as administered by the plan administrator, MetLife, violated its ERISA duties to act solely in the interest of plan participants and beneficiaries and avoid self-dealing in plan assets. However, the court did not view the retained asset accounts as plan assets, thus no fiduciary duties under ERISA attached. Rather, after depositing the life insurance proceeds into retained asset accounts, the relationship of the beneficiaries and the plan administrator became one of debtor-creditor under state law. Commentators agree that this case should not be read to imply that retained asset accounts or other similar disbursement methods are always outside the bounds of fiduciary duties governed by ERISA.