Top on Assistant Secretary of Labor Olena Berg's list is fixing what she calls the "erosion of protections for plan participants."
The erosion stems from the June 1, 1993, Supreme Court decision in Mertens vs. Hewitt Associates. The court found that pension plan participants could not sue non-fiduciaries, such as accountants, actuaries and attorneys, for knowingly participating in a fiduciary breach.
"My worry in the context of Mertens, is that there is nothing to deter service providers - non-fiduciaries - from assisting fiduciaries to do things that they know are not in accord with the law," Ms. Berg said. "And so I think that somehow, maybe by looking very hard again at how we define the fiduciary, we need to get that deterrent back so that people know that if they help a breach happen, that they somehow will be held accountable for their actions."
Ms. Berg, who heads the Pension and Welfare Benefits Administration, said the decision has hurt the Labor Department's ability to litigate cases against non-fiduciaries. Four cases litigated by the DOL lost the non-fiduciary issue because of the Mertens decision, a PWBA spokeswoman said.
But Ian Lanoff, former Department of Labor ERISA administrator, said that although he does not agree with the Supreme Court decision, it hasn't made much difference in service provider practices.
What may happen is that this field will be left to the larger accounting firms, law firms, and other non-fiduciaries, Mr. Lanoff said.
"Service providers are always looking for protections," he said. "They are more comfortable if they are not held liable."
After the decision, Sen. Howard Metzenbaum nearly introduced an amendment to last year's budget bill that would have increased potential liabilities on service providers.
But Ms. Berg said she would like the law returned to its original state, where Title I, which covers fiduciary issues, would be read as a broad remedial statute. She said that she hopes the issue will be addressed next session after health care reform is decided.
"ERISA has tried to craft a balance between the needs for plan sponsors so that they will be protected from frivolous lawsuits and having everything end up in litigation," Ms. Berg said. "On the other hand, the whole purpose of ERISA was to ensure to plan participants that promises made to them are kept. And I think that some of the recent court decisions have eroded that balance.
"There are people that argue that yes there are other statutes, fraud, malpractice and other laws, but they don't cover all the cases," she said. "And we, the Department of Labor, can't go into state court with a lot of those cases. So in my view, an important protection for participants is eroding."
