When ESOPs were established in 1974, Congress expressly sought to promote the adoption and successful operation of ESOPs. In the nearly 50 years since then, however, risk and liability have grown significantly. DOL investigations and plaintiff’s lawsuits place the target on trustees, who find themselves under fire in a minefield of liability. This situation results in higher fees and insurance premiums. Some companies are dissuaded from ESOPs altogether from the perception of the current environment of increasing liability. As a result, fewer ESOPs are adopted, and there are significant threats to the successful operation of ESOPs, the exact opposite of Congress’s intent. Please join us to explore the risks associated with key trustee activities, identify the measures trustees take to navigate risks, and discuss solutions that are currently on the table, as well as new solutions that should be considered. NCEO Resource: The Inside ESOP Fiduciary Handbook
Learning Objectives:
Identify main sources of risk for ESOP trustees and related consequences of those risks
Understand measures trustees take to mitigate ERISA decision-making risk
Consider and evaluate potential solutions for reducing liability
