Lots of people in business aspire to be on a corporate board of directors. It's a position of power. It's a position of prestige. You get to rub elbows with movers and shakers. Depending upon whose board it is, you may get paid a lot of money. And, you may be an accidental fiduciary in a retirement plan.
What was that? What did you say, dear blogger author person? Did you just tell me that being on a corporate board could saddle me with fiduciary responsibilities in a corporate retirement plan? Doesn't that mean that I am mutually and severally responsible for ensuring that what goes on in the plan is done in the best interests of plan participants?
How in the world did this happen?
You may recall that earlier this month I posted about the dangers of boilerplate work. Back then, I did it in the context of providers bidding low amounts to provide services and then providing you with exactly the same work product they have given to everyone else. It's not just consultants, some attorneys do this as well.
Just last week, I was speaking with an attorney friend of mine (yes, even an actuary can have an attorney friend or two). He warned me that this was going on and while I was not surprised to hear it, I was a little surprised with regard to the specific context.
And, then I saw it. With my own two eyes, aided by some pretty spectacular reading glasses, I saw it.
The Plan Committee shall be responsible for the operation of the Plan. The Board of Directors, or if so specified by the Board of Directors the Compensation Committee of said Board, shall be responsible for the selection of said Committee.
Bam! That's how a Board member can become a plan fiduciary and be legally and financially responsible for the actions of that plan committee.
Maybe being a corporate board member has some downside, too.