Litigation-Resistant Program Elements
- 1Fiduciary committee: Quarterly meetings with detailed minutes
- 2Annual benchmarking: Compare plan costs to Medicare rates and industry peers
- 3Vendor performance reviews: Quarterly reviews with documented outcomes
- 4Conflict of interest management: Review and document vendor compensation disclosures
- 5MHPAEA compliance: Current comparative analysis with outcomes data
- 6CAA compliance: Broker disclosures reviewed; gag clause attestation submitted
- 7ERISA counsel review: Annual review of fiduciary compliance posture
Documentation as Defense
Documentation is the primary defense against fiduciary litigation. A plan that can produce: (1) fiduciary committee minutes showing active cost oversight; (2) annual benchmarking reports; (3) vendor performance reviews; (4) conflict of interest disclosures and reviews; and (5) ERISA counsel opinions — is far less vulnerable to litigation than one that cannot.
The Cost of Compliance
IQ Insight
The investment in fiduciary compliance — ERISA counsel, fiduciary committee, annual benchmarking — is far less than the cost of litigation. A single ERISA fiduciary lawsuit can cost $500,000–$5 million in legal fees and settlements. The annual cost of a robust fiduciary compliance program is $25,000–$75,000. The ROI of fiduciary compliance is exceptional.