Delegating Benefits Decisions Doesn't Make You Safe Under ERISA

Are CEOs Personally Liable Under ERISA?

Yes. By default, ERISA treats the board of directors as the plan''s named fiduciary, which means personal liability attaches to leadership automatically, before anyone signs a delegation document. According to Benefits Law Advisor, that default holds until the board formally delegates authority in writing to a named committee or third party.

This isn''t theoretical. In Trustees of Sheet Metal Workers Int''l Ass''n Local No. 30 Vacation Fund v. Hopwood (S.D.N.Y. 2012), a federal court held a company CEO personally liable for $216,132 in unpaid fringe benefit contributions, finding he had exercised discretionary control over plan assets and breached his ERISA fiduciary duties. Seyfarth Shaw flagged the case as a direct warning: a CEO title doesn''t insulate the person inside it. ERISA liability follows the individual.

Does Delegating to a Broker or TPA End Your Liability?

No. Delegation moves the line. It doesn''t erase it. Mercer explains that properly executed delegation can contractually shift fiduciary responsibility for specific decisions, like investment selection, to a qualified provider. But the plan sponsor "always retains a residual fiduciary responsibility" and "cannot rid itself of the fiduciary responsibility related to selecting the delegated investment service provider and monitoring the continuing appropriateness of the chosen provider."

Translation: if you hire the wrong vendor and never check in, you''re still exposed. The ERISA lawsuits being filed against employer plans right now show exactly where ongoing oversight gets tested.

There''s also a category of decisions ERISA never lets you delegate at all. Establishing the plan, amending it, choosing which benefits to offer, deciding how much to contribute. Those are settlor functions. They stay with leadership, no matter how clean the delegation paperwork is.

How Bad Is the ERISA Litigation Environment Right Now?

The plaintiff bar is not slowing down. According to Encore Fiduciary, plaintiff firms filed 155 new ERISA fiduciary class actions in 2025. Defined contribution plans accounted for 98 of those. Health plans accounted for 39, a meaningful jump driven by post-CAA fee transparency.

Mid-market employers used to assume size made them invisible. That assumption is dead. The mid-market plan in the $250M to $750M range is now a primary target. Do you know what your last fiduciary review actually found? Without your own claims data and a defensible basis for plan decisions, there''s very little for the committee to review.

What Documentation Actually Protects a CEO From ERISA Liability?

Process. Not outcomes. Courts review whether you followed a prudent process, documented it, and acted on what the documentation showed. That''s the defensible position. Three artifacts do most of the work.

• A written delegation of fiduciary authority to a named committee, with a committee charter that defines the scope, signed and dated by the board.
• Documented committee meetings held at least semi-annually, with minutes that show what was reviewed, who attended, and what was decided.
• A vendor monitoring log showing ongoing review of your broker, TPA, PBM, and plan administrator. The broker compensation red flags are exactly what your monitoring log should be tracking.

If any of those three are missing, your delegation is a handshake. Not a legal shield.

Fiduciary liability insurance matters too. These policies can cover claims tied to the administration and operation of both retirement and health and welfare plans. But insurance doesn''t substitute for the documented process. It just covers the gap if the process breaks down. Plans without documentation pay higher premiums and face more carrier scrutiny at renewal.

The Implication You Can''t Ignore

If your plan documents don''t name a fiduciary committee with a written charter, and there are no meeting minutes showing prudent review, your personal assets are closer to this risk than you think. The litigation market is organized, well-funded, and growing. The gap between "we delegated it" and "we documented the delegation" is exactly where personal liability lives.

Frequently Asked Questions

Who is the ERISA "named fiduciary" if my plan documents don''t specify one?

By default, the plan sponsor''s board of directors (or the equivalent governing body for LLCs and partnerships) is the named fiduciary. ERISA Section 402 requires a written delegation procedure before that authority can move to a committee or third party.

Can I be personally sued under ERISA even though I''m not on the benefits committee?

Yes, if you exercise discretionary authority over plan administration or assets, you can be a "functional fiduciary," regardless of title. The Hopwood case extended liability to a CEO who controlled unremitted contributions. Decision-making authority creates exposure. Job titles do not.

What is the difference between settlor and fiduciary functions?

Settlor functions are business decisions about whether to have a plan, what benefits to offer, how much to contribute, and when to amend or terminate. These are not fiduciary acts and cannot be delegated to a fiduciary committee. Fiduciary functions involve administering the plan and managing its assets prudently, which can be delegated through proper written processes.

Does fiduciary liability insurance cover both retirement and health plans?

Most fiduciary liability policies cover claims related to the administration and operation of both retirement plans and health and welfare plans, but coverage scope varies. Confirm with your broker that health-plan exposures, including CAA fee disclosures and mental health parity, are inside the policy''s definitions before you sign.

How often does an ERISA fiduciary committee need to meet?

ERISA does not set a frequency. Courts and the DOL look for "regular" and "prudent" oversight, which in practice means at least semi-annually for most plans, and quarterly for plans with active investment decisions or vendor changes. The minutes are what gets reviewed in litigation.