DOL Rules that Plan Fiduciaries May Not Increase Expenses, Sacrifice Investment Returns, or Reduce the Security of Plan Benefits to Promote Collateral Public Policy Goals
After AFL-CIO officials reportedly suggested that plan fiduciaries could spend plan assets to inform plan participants about the current debate on Social Security and could hire and fire plan service providers based on the providers’ opinions on Social Security, the DOL issued an advisory opinion expressing grave concern about such statements.
According to the DOL, plan assets cannot be used for any purpose other than to pay benefits and defray reasonable administrative costs. Under ERISA’s stringent standards of prudence and loyalty, it would be unlawful for a plan fiduciary to review the plan’s service providers based, not upon the quality and expense of their services, but rather on their views on Social Security or any other broad area of public policy.
