Confero Summer 2013: Issue 3 - Page 8

RES IPSA LOQUITUR “the thing itself speaks” FIDUCIARY GOVERNANCE: TRUST ME By Diana K. Powell, Esq. “The best way to find out if you can trust somebody is to trust them.” — Ernest Hemingway T he term fiduciary comes from the Latin term fiducia which means “trust.” According to the Department of Labor (DOL) a plan fiduciary is “a person or entity that uses discretion in administering and managing a plan or controlling a plan’s assets to the extent of that person or entity has discretion or control.” This operation of a plan is the exercise of fiduciary governance of plan fiduciaries. Under the Employee Retirement Income Security Act (ERISA) 404(a)(1) “… a fiduciary shall discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries and for the exclusive purpose of: • Providing benefits to participants and their beneficiaries; and • Defraying reasonable expenses of administering the plan. ERISA 404(a)(1)(A) the Duty of Loyalty to plan participants and their beneficiaries requires that in discharging his fiduciary duties, the fiduciary’s decisions … “Must be made with an eye single to the interests of the participants and be