For those dealing with the finances of others, whether acting in accordance with job descriptions duties or providing investment services as done through an employee benefit plan, there is a concern that an individual may never receive the benefits as promised or indicated. This scenario is what Axis consider a fiduciary liability. There are several common areas of complaints where fiduciary insurance claims are filed against an employer.
- An employee was advised of the soundness of investing in a guaranteed plan, yet the employee lost money due to poor performance on the account. The employee can sue for breach of fiduciary responsibility based on poor advisement.
- An employee indicated a desire to retire and asked for details concerning his pension. The administration team delays the requests, and during that time, the stock market dropped considerably, causing a significant loss in profit. The delay and inactions are considered a break for fiduciary liability.
- An employee notices that their pension plan calculations do not include time spent on maternity leave or another qualified leave of absence. The resulting claim of fiduciary liability could wind the employer up in court for a settlement.
A company must look at how they are protecting both their employees but also their staff in these areas of liability. Having checks and balances for processing, auditing, reporting, and a paperwork trail can help reduce your risk in this area.