Do you know what you are? Erisa titles matter.
The questions may sound like the title to a Dr. Seuss book, but it has great bearing on how you are treated under ERISA. Knowing your title also creates clarification as to what your duties are, and what they are not.
Take the term “plan administrator.” The plan administrator, responsible for managing the day-to-day operations of the plan, is designated in the plan documentation as "administrator." If no one is otherwise designated, the plan administrator is the plan sponsor (unusually the employer). This was relevant in a recent decision finding that a plan sponsor (employer) was not liable for the failure to send a COBRA notice because COBRA requires the plan administrator to send notices, and the plan designated an insurance company as the plan administrator. So, if the duty is on the plan administrator, then you need to know if you are a plan administrator.
But plan administrator may not be the same as “claims administrator," the entity that processes claims, but may not necessarily administer the plan. Designating a claims administrator would not be enough to name someone other than the employer as the plan administrator.
Similarly, “plan sponsor” is just that: the entity that sponsors the plan. This could be the employer or an organization or a group of employers. But status as a plan sponsor or status as a “fiduciary” can be different. It matters particularly when evaluating the difference between decisions that implicate settler functions (such as the decision to terminate a benefit plan) and those that implicate plan administration functions (such as the obligation to provide appropriate notice about the termination of a plan). Of course, “fiduciary” has its own distinction. A fiduciary under ERISA terms is someone designated as such by the plan, or someone who exercises “discretionary authority” over the administration of the plan. Fiduciaries have specific responsibilities to the plan beneficiaries and can be sued for “breach of fiduciary duty.”
The point of this post is not to answer definitively what you are, but to make sure you know to ask what you are. The point is what you are matters. If you are an employer with a benefit plan, you are one and may be all of the above. What you are defines your risks and responsibilities.
Keith R. McMurdy, partner at Fox Rothschild LLP in New York, can be reached at
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