ERISA makes a plan fiduciary liable for a breach of fiduciary responsibility by another fiduciary for the same plan if: (a) the fiduciary participates knowingly in, or knowingly conceals an act or omission of a co-fiduciary which he knows constitutes a breach; (b) by his failure to comply with the prudence, diversification, or loyalty requirements or failure to follow plan documents in the course of his own fiduciary duties, he enables another fiduciary to commit a breach; or (c) he has knowledge of a breach of the other fiduciary and does not make reasonable efforts under the circumstances to remedy the breach.

Participating knowingly in or concealing a breach. E and F are co-trustees and the terms of the plan allow no investments in commodity futures. If F invests in such futures at the suggestion of E, both E and F will be liable for the breach. Similarly, if F independently invests in commodity futures and tells E of this investment, E would be liable as well as F for the breach if E concealed the improper investment.

Enabling the breach. Co-trustees E and F jointly manage the plan assets. E improperly allows F to have the sole custody of the plan assets and makes no inquiry as to his conduct. F is thereby enabled to sell the property and to embezzle the proceeds. E is liable for a breach of fiduciary responsibility.

Failure to remedy. Based on the first example, above, if E has authority to do so and it is prudent under the circumstances, he may be required to dispose of the commodity futures acquired by F. Alternatively, the most appropriate steps may include notifying the plan sponsor of the breach or proceeding to an appropriate federal court for instructions, or bringing the matter to the attention of the Secretary of Labor.

The Department of Labor has provided guidance regarding remedial measures necessary to prevent co-fiduciary breaches. Co-fiduciaries must take all reasonable and legal steps to prevent the breach. Such steps might include obtaining an injunction in Federal court, notifying the Department of Labor, notifying the plan sponsor or publicizing the breach. Further, all meetings concerning management and control of plan assets should be documented and any objections alleging potential violations of fiduciary responsibilities should be made part of the record. If a fiduciary believes a co-fiduciary has already committed a breach, the Department of Labor has warned that resignation as a protest against a breach will not generally discharge the duty to make reasonable efforts to remedy a breach.