ERISA provides for the allocation and delegation by named fiduciaries of duties that do not involve "trustee responsibilities." "Trustee responsibilities" means any responsibilities provided in the plan's trust instrument to manage or control the assets of the plan, other than a power under the trust instrument of a named fiduciary to appoint an investment manager. Generally, only named fiduciaries may allocate and delegate their duties to enable participants and beneficiaries to determine the identity of those responsible for managing the plan.
If properly allocated to others, named fiduciaries incur no liability for acts or omissions of persons to whom duties have been allocated. The named fiduciary retains liability to the extent that the named fiduciary violates ERISA -- with respect to the allocation or delegation, with respect to the establishment or implementation of the procedure for allocation or delegation, or in continuing the allocation or delegation. Also, the named fiduciary remains liable for the acts of co-fiduciaries. ERISA endorses only prudent delegations. The Department of Labor has also stated that the appointing fiduciary should ensure proper performance and compliance by reviewing the performance of appointed fiduciaries at reasonable intervals. The appropriate review procedure will vary with the facts and circumstances.
A different set of rules governs delegation of the authority to control or to manage plan assets. ERISA does not allow named fiduciaries to delegate such "trustee responsibilities." ERISA provides that a trustee holding plan assets has exclusive authority and discretion to manage and control those assets unless an investment manager has been appointed or the trustees are subject to the direction of a named fiduciary. If two or more trustees hold the assets of a plan, they must jointly manage and control the plan assets, unless the plan instrument provides for allocation among themselves of specific responsibilities. Each trustee must use reasonable care to prevent a co-trustee from committing a breach.
