Fiduciary Services provides superior skill and expertise

Fiduciary Services provides superior skill and expertise where an independent fiduciary or investment manager is needed to make evaluations and final decisions on behalf of retirement plans, including those plans with company stock. In the case of Employee Stock Ownership Plans (ESOPs), the need arises when capital changes or ownership transitions are being anticipated at the company that affect the plan participants.

The Need for an Independent Fiduciary or Trustee for Retirement Plan Decisions Involving Company Stock

In recent years we have all read and heard news about a proliferation of employee retirement plan litigation leveling charges against internal trustees, plan committees as well as the company officers and directors. These law suits and regulatory actions allege conflicts of interest and failure to take appropriate actions against these parties. Conclusions coming out of these cases make it clear that when important fiduciary decisions on behalf of plan participants need to be made, an independent fiduciary can be a critical element to avoid liability.

The independent fiduciary is usually brought in to make determinations on behalf of the plan participants that the plan trustee is not comfortable making. This is due either to the need to avoid the appearance of a conflict of interest in the case of the plan trustee, who may also be an officer/director of the company, or in some cases due to the need for a higher level of expertise on the part of the current trustee.

In these situations, Fiduciary Services, as independent fiduciary, steps in and directs the action a retirement plan committee or plan trustee should take relating to a proposed purchase, sale or disposition of stock of the company or other plan investments. The company stock transactions often involve the exchange between an owner/officer of the trust or some other third party such as an aquirer of the company in a merger and the trust. FSI as independent fiduciary can also provide the requisite status to receive exemption for prohibited transactions on the settlement of litigation by employee benefit plans with parties in interest.

Fiduciary Services offers extensive experience and capability to ensure the transaction is handled in a professional manner. This will help the company, its officers and directors to avoid potential liability from litigation or critical review by regulatory authorities.