Fiduciary Duties with Respect to the Payment of Commissions for Insured Group Health Plans. A White Paper by Alison Smith Fay Boutwell Fay LLP

Transcription

1 A. Introduction Fiduciary Duties with Respect to the Payment of Commissions for Insured Group Health Plans A White Paper by Alison Smith Fay Boutwell Fay LLP The purpose of this White Paper is to lay out the statutory and regulatory framework for fiduciary duties under the Employee Retirement Income Security Act of 1974, as amended ("ERISA") with respect to payment of commissions in connection with the purchase of insured employer-provided group health plan coverage. The discussion will focus on a fiduciary's duty to ensure that commissions paid for such coverage are reasonable and will describe best practices for fulfilling this duty. The paper is organized as follows: 1. First, we describe the legal basis for the imposition of fiduciary duties under ERISA as applied in the context of an insured group health plan. 2. Next, we describe who might be considered to be an ERISA fiduciary with respect to an insured group health plan, with a particular focus on those plans without formal governing plan documents, and what the consequences of fiduciary status are. 3. Next, we consider when an insured group health plan has "plan assets" triggering a fiduciary duty for the prudent disposition of those assets. 4. Finally, we conclude that the payment of premiums for group health plan coverage with participant contributions that are plan assets triggers a duty on the part of plan fiduciaries to ensure that the premiums paid, including any embedded commissions, are reasonable plan expenses. We also describe best practices for managing potential liability in connection with the payment of commissions for insured group health plan coverage. B. Executive Summary Plan fiduciaries of insured group health plans are subject to ERISA s fiduciary duty rules including the requirement to use plan assets only for paying benefits or defraying the reasonable 1

2 expenses of the plan and to act prudently in the disposition of plan assets. Employees or others who control plan assets may be characterized as plan fiduciaries. Participant contributions that are deducted from wages become plan assets as soon as they can reasonably be segregated from the employer s general assets. If participant contributions are not forwarded to the carrier before they become plan assets, fiduciaries who control the payment of premiums with participant contributions are subject to fiduciary standards. Fiduciaries of an insured group health plan have a duty to ensure that the assets of the plan, including participant contributions that have become plan assets, are used only to pay the reasonable expenses of the plan including premiums for the purchase of coverage. If the premiums, including any commissions that are embedded in the premiums, are not reasonable, then plan fiduciaries will have breached their fiduciary duties. To avoid potential liability, plan fiduciaries should compare estimates from prospective insurance brokers, ask which services are covered for the estimated costs and which are not, and then compare all services to be provided with the total cost for each proposal. C. Discussion 1. Insured Group Health Plan Fiduciary Duties. When an employer purchases group health insurance for its employees, it generally establishes an ERISA welfare benefit plan. 1 There are some exceptions for church and governmental employers; however, substantially all private sector employers that provide health insurance to 1 With certain limited exceptions, Section 4 of ERISA imposes any number of statutory requirements on plan sponsors and plan fiduciaries under ERISA Title I with respect to "employee benefit plans that are established or maintained by any employer engaged in commerce or any industry or activity affecting commerce." The requirement that an employer be "engaged in commerce" or "affect commerce" means that ERISA's coverage has an extremely broad reach. Section 3(3) defines an "employee benefit plan" as either a pension benefit plan or welfare benefit plan, and Section 3(1) defines a "welfare benefit plan" to include any plan, fund or program established or maintained by an employer for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, medical, surgical or hospital care or benefits among other types of benefits. Thus, an insured group health plan will constitute an ERISA welfare benefit plan, as defined in ERISA Section 3(1), and therefore, also an ERISA employee benefit plan, as defined in ERISA Section 3(3). 2

3 their employees are subject to ERISA, regardless of the number of employees covered by the plan. While some small insured group health plans -- those with fewer than 100 participants -- are exempt from the Form 5500 filing requirement, they are nonetheless still covered by ERISA. Section 404(a)(1) of ERISA imposes on plan fiduciaries, including fiduciaries of insured group health plans, the following duties: (a) Duty of Loyalty. Plan fiduciaries must act solely in the interest of participants and beneficiaries. This duty of loyalty under ERISA is derived from the trust law and imposes the duty to act with "complete and undivided loyalty" to participants 2 and with an "eye single to the interests of the participants and beneficiaries." 3 (b) Exclusive Purpose Rule. In addition, plan fiduciaries must discharge their duties for the exclusive purpose of providing benefits to participants and beneficiaries. Courts have found a breach of the exclusive purpose rule where plan fiduciaries diverted plan assets to related parties. (c) Prudence Rule. Plan fiduciaries must act with "the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims." 4 Courts typically focus on the process that plan fiduciaries have used in making a decision rather than the result of the decision. 5 (d) Diversification Requirement. The assets of an ERISA plan must be diversified "so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so." 6 An insured group health plan, if properly managed, will not have plan assets. 7 And even when an insured group health plan has plan assets, it is most likely they will need to be kept in cash, rather than diversified, to facilitate the payment of premiums. (e) Requirement to Follow Plan Terms. Plan fiduciaries are bound to follow the terms of "the documents and instruments governing the plan insofar as such documents and instruments are consistent with [ERISA]." While ERISA Section 402(a)(1) requires that every employee benefit plan be "established and maintained pursuant to a written 2 Freud v. Marshall & Isley Bank, 485 F. Supp. 629 (W.D. Wis. 1979). 3 Donovan v. Bierwirth, 680 F.2d 263 (2d Cir. 1982). 4 ERISA 404(a)(1)(B). 5 Donovan V. Mazzola, 716 F.2d 1226 (9 th Cir. 1983). 6 ERISA 404(a)(1)(C). 7 See Section 3 of the White Paper for a discussion of when an insured group health plan has plan assets. See footnote 28 for a description of how to avoid plan assets. 3

4 instrument," this requirement is frequently ignored by employers with respect to their group health plans -- either out of ignorance or because of their unwillingness to incur the cost of having a plan document drafted. Often plan sponsors, if required to produce a plan document, will resort to bundling together a group of documents -- usually the insurance policy 8 or contract that provides the benefits and a more detailed certificate of coverage that describes the benefits provided that may be labeled as a summary plan description ("SPD"). 9 As a result, it is often difficult to determine which document or documents governs the plan. For this reason, it may be in the employer's best interest to adopt a "wrap document" that will include provisions designed to satisfy ERISA and will incorporate by reference insurance company documents that accurately describe the benefits. In the absence of such a document, plan sponsors and fiduciaries may be forced to improvise in the event a participant requests a copy of the plan document. 10 The duty of loyalty described in (a) above is supplemented by ERISA Section 403(a), which requires that all assets of an employee benefit plan be held in trust, and Section 403(c), which provides, "the assets of a plan shall never inure to the benefit of any employer and shall be held for the exclusive purpose of providing benefits to participants in the plan and their beneficiaries and defraying reasonable expenses of administering the plan." These rules along with the prohibited transaction rules described below are designed to avoid self-dealing on the part of plan fiduciaries. ERISA Section 406 prohibits certain related party transactions to prevent abuses with respect to the use of plan assets. Section 406(a) prohibits transactions between a plan and a party in interest. A party in interest includes both fiduciaries and any person providing services to a plan among others. 11 Section 406(b) prohibits fiduciary self-dealing in various forms. Because of 8 In Cinelli v. Security Pacific Corporation, 61 F3d 1427 (9 th Cir. 1995), the court held that an insurance policy can constitute a written instrument of an ERISA plan. 9 These documents are frequently drafted by insurance companies and are not designed to comply with ERISA requirements. As a result, they often fall short of ERISA s requirements. Moreover, the employer loses the opportunity to include plan language and design the plan in a way that is favorable to the employer. For example, it is not unusual for an insurance company document to fail to designate a named fiduciary or provide for the allocation of fiduciary responsibilities. See Section 2 of this White Paper for a discussion of the consequence of failing to designate a named fiduciary. 10 Participants are entitled to receive a copy of the plan document and the plan administrator can be subject to a $110 per day penalty for failing to produce it. 11 See ERISA 3(14). 4

5 the prohibition on transactions between service providers and a plan, ERISA Section 408(b)(2) provides an exemption in the case of a service provider who provides services that are necessary and appropriate, the arrangement under which the service provider operates is reasonable, 12 and the service provider s fee is reasonable. 13 Internal Revenue Code Section 4975 imposes similar, but not identical, prohibited transaction rules, that subject disqualified persons, a term similar to parties in interest, to excise taxes if they are violated. 2. Who is an ERISA Fiduciary? The definition of "fiduciary" for purposes of ERISA is set forth in Section 3(21)(A) of ERISA and provides in pertinent part that "a person is a fiduciary with respect to a plan to the extent that: (i) he exercises any discretionary authority or discretionary control respecting management of such plan, or (ii) exercises any authority or control respecting management or disposition of its assets, or... (iii) he has any discretionary authority or discretionary responsibility in the administration of such plan DOL Reg b-2(c) provides, No contract or arrangement is reasonable within the meaning of section 408(b)(2)... if it does not permit termination by the plan without penalty to the plan on reasonably short notice under the circumstances to prevent the plan from becoming locked into an arrangement that has become disadvantageous. 13 For certain covered pension plans and certain covered service providers, additional disclosure requirements must be satisfied by the service provider for the exemption under Section 408(b)(2) to apply. See DOL Reg b- 2(c). These disclosure rules are not applicable to welfare plans, although the DOL may impose similar rules to welfare plans in the future. 14 A fiduciary also includes a person who renders investment advice for a fee or other compensation, direct or indirect, with respect to any plan assets, or has the authority or responsibility to do so. Because insured group health plans typically have few plan assets, rarely is there an investment advice fiduciary with respect to such a plan. 5

6 An employer that sponsors a group health plan will frequently be the administrator for the plan and by reason of holding that position, it will be a fiduciary. 15 In the case of a group health plan that is funded by a trust, the trustee of the trust will also be considered a fiduciary. As explained in DOL Regulation Section D-3 Q&A, "other offices and positions [other than administrator and trustee] should be examined to determine whether they involve the performance of any of the functions described in Section 3(21)(A)." Thus, the DOL has adopted a functional definition, and the courts have followed this approach, defining fiduciary conduct "in functional terms of control and authority over the plan." Mertens v. Hewitt Assocs., 508 U.S. 248, 262 (1993). Where a person performs any of the functions that define fiduciary status under 3(21)(A), that person will be a fiduciary regardless of whether that person has been appointed or otherwise designated as having fiduciary responsibilities. 16 A recent case, Perez v. Geopharma, Inc., 2014 WL (M.D. Fla, July 25, 2014), provides a good example. In that case, the DOL brought an action against Geopharma and officers of Geopharma alleging that they had breached their duties as ERISA fiduciaries. According to the complaint, Geopharma established a group welfare plan that provided medical, dental, prescription drug, and short-term disability benefits to its employees, and the plan was funded by both employer and employee contributions. The complaint further alleged that Geopharma failed 15 ERISA Section 3(16) provides that if the plan sponsor fails to designate a person as the administrator, the administrator is the plan sponsor. Since most employer plan sponsors fail to designate an administrator, the employer becomes the administrator by default. The administrator under ERISA should not be confused with a third party administrator, who may be hired to carry out some or all of the functions for which the administrator is responsible. These include certain reporting and disclosure requirements, for example, providing participants with a summary plan description and filing the Form 5500, if required. 16 Relying on the to the extent limit in the definition of fiduciary under ERISA, the courts have recognized a distinction between settlor or business functions, which are not subject to a fiduciary standard under ERISA, and fiduciary functions which are subject to ERISA. ERISA allows an individual to wear two hats one fiduciary and one settlor. The most common settlor functions are those involving plan design decisions, for example, the decision to amend or terminate a plan. 6

7 to segregate employee contributions from the company s general assets as soon as it reasonably could do so and failed to use those contributions to pay claims. The court denied the defendants motion to dismiss and held that the allegation that the defendant had signature authority on Geopharma s bank accounts and that employee contributions were commingled with Geopharma s general assets was sufficient for the court to reasonably infer that [the defendant] exercised authority or control over Geopharma s Plan assets as a ERISA fiduciary when employee premiums were commingled with Geopharma s general assets. The DOL argued, and it appears the court agreed, that the defendant, as Chief Executive Officer, Secretary, and Director of Geopharma,... had signature authority on Geopharma s bank accounts. Therefore when Geopharma employee premiums were commingled with Geopharma's general assets and never remitted or used to pay claims, [the defendant] allegedly exercised fiduciary authority or control over both Geopharma s assets and Plan assets simultaneously. ERISA contemplates that an employer establishing an ERISA-covered plan will adopt a governing plan document and Section 402(a)(1) requires that the plan document designate one or more "named fiduciaries," who will have authority to control and manage the operation and administration of the plan. The purpose of having a named fiduciary is "to enable employees and other interested persons to ascertain who is responsible for operating the plan." DOL Regulation Section FR-1 Q&A. But what happens when an employer either fails to adopt a governing plan document or the document fails to designate a named fiduciary, a situation that occurs quite frequently with many insured group health plans? It is unclear what the answer is. Since it is the plan sponsor that 7

8 establishes and maintains the plan, one can make an excellent argument that it is the employer's responsibility to adopt a governing plan document and to designate the named fiduciary in that document. If that is true, then one might argue further that it is the employer's governing board (for example, the board of directors in the case of an employer that is a corporation) that has the responsibility to appoint the named fiduciary for the plan. DOL Regulations Section D-4 Q&A provides some support for this position. In response to the question of whether the members of an employer's board of directors are considered to be fiduciaries of a plan established and maintained by the employer, the regulation provides as follows: "Members of the board of directors of an employer which maintains an employee benefit plan will be fiduciaries only to the extent that they have responsibility for the functions described in section 3(21)(A) of the Act. For example the board of directors may be responsible for the selection and retention of plan fiduciaries. In such a case, members of the board of directors exercise 'discretionary authority or discretionary control respecting management of such plan' and are, therefore, fiduciaries with respect to the plan." If the board has failed to appoint and monitor fiduciaries of a plan maintained by the employer and employees of the plan sponsor use plan assets in a way that violates the exclusive benefit rule or prudence rule, then members of the board may be personally liable to make the plan whole for fiduciary breaches by those employees who have become functional fiduciaries of the plan. Fiduciaries who breach their duties under ERISA are personally liable to make good any losses to the plan on account of the breach. 17 So for example, a fiduciary could be liable to restore to the plan any excessive fees or commissions paid out of plan assets. The courts continue to consider the issue of excessive fees for retirement plans. In Tussey v. ABB, Inc., 746 F.3d 327 (8th Cir. 2014), the court held that there was a breach of fiduciary duty when plan fiduciaries 17 ERISA 409(a). 8

9 failed to adequately consider fees and expenses embedded in investment funds offered by a 401(k) plan. The court awarded damages of $13.4 million in damages in excessive recordkeeping fees. In a somewhat different situation, the Sixth Circuit upheld the District Court s award of damages of approximately $285,000 after finding that Blue Cross, a service provider to a multiemployer health plan, was a fiduciary and that it had breached its fiduciary duty by imposing hidden fees. 18 The measure of the damages awarded was the amount of the hidden fees paid by the plan. In a similar case with almost identical facts, the court awarded damages of over $5.0 million against Blue Cross for the same sort of breach of fiduciary duty. 19 Often the existence of plan assets is a crucial step in a finding of fiduciary status and the imposition of fiduciary duties. When it can be established that a person has discretionary control over plan assets, that person will be deemed to be a fiduciary for ERISA purposes. That is why we focus next on the existence of plan assets in the context of an insured group health plan. 3. Plan Assets for Insured Group Health Plans. There is no statutory definition of plan assets under ERISA. However, DOL Regulations Section (a) provides the following definition: [T]he assets of the plan include amounts that a participant has withheld from his wages for contribution... as of the earliest day on which such contribution can reasonably be segregated from the employer s general assets. Paragraph (c) of the regulations establishes that notwithstanding the general rule under paragraph (a), participant contributions to a welfare plan become plan assets no later than 90 days after the date such contributions are withheld from the participant s wages. In addition, there is a special safe harbor for plans with fewer than 100 participants that provides participant contributions that 18 Pipefitters Local 636 Insurance Fund v. Blue Cross and Blue Shield of Michigan, 722 F.3d 861 (6 th Cir. 2013). 19 Hi-Lex Controls, Inc. v. Blue Cross Blue Shield of Michigan, 751 F.3d 740 (6 th Cir. 2014). 9

10 are deducted from wages will not become plan assets any earlier than seven business days following the date on which such amounts otherwise would have been paid to the participants. In our experience the DOL, when it audits a 401(k) plan, has taken the position that participant contributions deducted from wages can reasonably be segregated from the employer s general assets within three or four business days or sooner. We suspect the DOL would take a similar position with respect to participant contributions to welfare plans. In Hi-Lex Controls, Inc. v. Blue Cross Blue Shield of Michigan, 751 F.3d 740 (6th Cir. 2014), the Sixth Circuit held that participant contributions deducted from employees pay and sent to BCBSM to pay claims and administrative costs were plan assets. The court cited DOL Regulations Section (a) (see above), DOL Advisory Opinion No A, which provides, all amounts that a participant pays to or has withheld by an employer for purposes of obtaining benefits under a plan will constitute plan assets, and United States v. Grizzle, 933 F.2d 943 (11 th Cir. 1991), which provides, in the words of the Hi-Lex court, that plan assets may be composed of employee contributions even before their delivery to the plan. 20 Thus, in the typical situation where an employer pays the premiums due to the insurance carrier once per month after the coverage for that month has commenced and employee contributions 20 See also In re College Bound, Inc., 172 B.R. 399, 404 (Bankr.S.D.Fla. 1994); Bannister v. Ullman, 287 F.3d 394, 402 (5 th Cir. 2002). In Hi-Lex Controls, Inc. v. Blue Cross Blue Shield of Michigan ( BCBSM ), which is part of a group of cases brought against BCBSM, the court held that BCBSM functioned as a fiduciary because it collected a hidden fee without disclosing it to the plan sponsor, and therefore exercised control over plan assets. Citing Pipefitters Local 636 Ins. Fund v. Blue Cross, 722 F3d 861 (6th Cir. 2013), the court relied, in part, on its finding that participant contributions deducted from employees pay and sent to BCBSM to pay claims and administrative costs were plan assets. Citing Pipefitters again, the court affirmed the District Court s holding that BCBSM violated its fiduciary duty by providing the plan sponsor false and misleading information about its fees and by engaging in self-dealing. 10

11 are deducted from pay twice per month or every two weeks, there is a risk that at least half of participant contributions could become plan assets before they are forwarded to the carrier. The DOL has muddied the water somewhat by the publication of Technical Release Nos and 92-1, both of which provide for a non-enforcement policy with respect to the treatment of participant contributions. In 1988 shortly before the plan asset participant contributions regulations first became effective, the DOL stated in Technical Release 88-1that it would not assert a violation in any enforcement proceeding solely because of the failure to hold participant contributions to a cafeteria plan in trust. Later in Technical Release No , the DOL expanded its non-enforcement policy to certain welfare plans where participant contributions are applied only to the payment of premiums and where certain additional conditions are met. These are the conditions in DOL Regulations Section (b)(2)(ii) or (iii) that apply to exempt a plan with fewer than 100 participants from the requirement to file a Form , and in Section (b)(1)(ii) or (iii) that exempt a plan with 100 or more participants from the requirement that the plan to be audited by an independent qualified public accountant, 23 and are as follows: (i) Benefits are paid solely from the general assets of the employer (or employee organization) maintaining the plan; or (ii) Benefits are provided exclusively through insurance contracts or through a qualified health maintenance organization (HMO), the premiums for which are paid directly by the employer (or employee organization) from its general assets or partly from its general assets and partly from contributions from its employees (or members), provided that contributions by participants are forwarded to the insurance carrier or HMO by the employer (or employee organization) within three months of receipt; or FR (June 2, 1992). 22 DOL Reg DOL Reg

12 (iii) Benefits are provided partly from the general assets of the sponsor and partly through insurance contracts or through a qualified HMO, as described in (ii). Most insured group health plans will satisfy (ii) above and therefore can rely on the nonenforcement policy to avoid having to hold participant contributions in trust so long as those contributions are forwarded to the insurance carrier within three months of receipt. The DOL makes it clear, however, that its non-enforcement policy applies only for purposes of the trust requirement and the reporting exemptions under DOL Regulations Sections and , and does not extend relief from compliance with the exclusive benefit rule as follows: The Department cautions that the foregoing enforcement policy in no way relieves plan sponsors and fiduciaries of their obligation to ensure that participant contributions are applied only to the pay of benefits and reasonable administrative expenses of the plan. Utilization of participant contributions for any other purpose may result not only in civil sanctions under Title I of ERISA but also criminal sanctions under 18 U.S.C See U.S. v. Grizzle, 933, F2d 943 (11 th Cir. 1991). Thus, even though the DOL will not enforce the requirement to hold participant contributions in trust under Technical Release No. 92-1, once those contributions can reasonably be segregated, they become plan assets and therefore are subject to the exclusive benefit rule. As a result, participant contributions to an insured group health plan that are not used to pay insurance premiums within seven days generally will be considered plan assets and must be used in a way that is consistent with the exclusive benefit rule under ERISA Section 403(c). 12

13 4. Consequences of Participant Contributions Becoming Plan Assets. The preamble to the plan assets participant contributions regulations 24 states the DOL s position on the consequences of participant contributions becoming plan assets for an insured group health plan: The Department does not agree that the concept of participant contributions becoming plan assets as soon as they can reasonably be segregated from the employer s general assets has no relevance to welfare plans. In the view of the Department, employees who agree to deductions from their wages for contributions to a plan are entitled to have the assurance that when the employer decides to purchase an insurance policy or medical services for the plan, it is acting as a fiduciary of the plan and is governed by the fiduciary standards of ERISA in so doing. The fact that the participant contributions may be used to repay an employer for advancing funds for the plan s expenses does not, in the view of the Department, change the character of the participant contributions. When participant contributions become plan assets, not only is the trust requirement under ERISA Section 403(a) triggered for which relief may be available under the DOL s nonenforcement policy, but also the requirement under ERISA Section 403(c) that those contributions be used for the exclusive purpose of providing participant benefits or defraying the reasonable expenses of the plan, for which the non-enforcement policy provides no relief. The use of participant contributions that are plan assets for any other purpose will cause plan fiduciaries who authorize such use to have breached their fiduciary duties. 25 Fiduciaries of an insured group health plan have a duty to ensure that the assets of the plan, including participant contributions that have become plan assets, are used only to pay the reasonable expenses of the plan including premiums for the purchase of coverage. If the premiums, including any commissions that are embedded in the premiums, are not reasonable, 24 DOL Reg See Prof. Helicopter Pilots Ass n v. Denison, 804 F. Supp (M.D. Ala. 1992). 13

14 then plan fiduciaries will have breached their fiduciary duties under ERISA Section 404(a)(1)(A) and (B), and may be liable to make the plan whole. 26 To avoid potential liability for a fiduciary breach in connection with the payment of fees and commissions for insured group health coverage, plan fiduciaries should follow the advice outlined in the DOL s publication Understanding Your Fiduciary Responsibilities Under a Group Health Plan, which provides as follows: 27 Fees are just one of several factors fiduciaries need to consider in deciding on service providers. When the fees for services are paid out of plan assets, fiduciaries will want to understand the fees and expenses charged and the services provided. While the law does not specify a permissible level of fees, it does require that fees charged to a plan be reasonable. After careful evaluation during the initial selection, the plan's fees and expenses should be monitored to determine whether they continue to be reasonable. In comparing estimates from prospective service providers, ask which services are covered for the estimated fees and which are not.... Compare all services to be provided with the total cost for each provider. Consider whether the estimate includes services you did not specify or want. Remember, all services have costs. Some service providers may receive additional fees from third parties, such as insurance brokers. Employers should ask prospective providers whether they get any compensation from third parties, such as finder s fees, commissions, or revenue sharing.... [T]he fiduciary must ensure that those fees and expenses are reasonable, necessary for the operation of the plan, and not excessive for the services provided. 26 See Lancaster v. Plumbers & Pipefitters Local 454 Health & Welfare Fund, 55 F3d 1034 (5 th Cir. 1995). Cases involving excessive fees in retirement plans not only implicate the exclusive benefit rule, but also procedural prudence. See Braden V. Wal-Mart Stores, Inc., 588 F.3d 585 (8 th Cir. 2009). 27 Another way that may be possible to avoid potential liability is for the employer to forward to the carrier participant contributions before they can become plan assets, that is, as soon as they can reasonably be segregated from the employer s general assets. Attempting to prove a fiduciary breach when it cannot be established that there are plan assets is a much more difficult proposition than if the existence of plan assets is not in question. 14

15 This White Paper has been prepared by Boutwell Fay LLP for informational purposes only and does not constitute legal advice. Transmission of the information in this White Paper is not intended to create, and receipt does not constitute, an attorney-client relationship. Anyone reading this White Paper should not act upon the information included in it without seeking legal counsel. 15