:: Court Imposes Personal Liability And Attorney Fees On Plan Fiduciary For Breach

Derived from these components, the Sixth Circuit has held that an ERISA fiduciary has a duty to “give complete and accurate information in response to participants’ questions.” Drennan v. Gen. Motors Corp., 977 F.2d 246, 251 (6th Cir. 1992). Furthermore, “misleading communications to plan participants regarding plan administration . . . will support a claim for breach of fiduciary duty” because “a fiduciary may not materially mislead those to whom the duties of loyalty and prudence described in 29 U.S.C. § 1104 are owed.” Berlin, 858 F.2d at 1163.

Overall, this “‘duty to inform is a constant thread in the relationship between beneficiary and trustee; it entails  not only a negative duty not to misinform, but also an affirmative duty to inform when the trustee knows that silence might be harmful.’” Krohn, 173 F.3d at 548 (quoting Bixler v. Cent. Pa. Teamsters Health & Welfare Fund, 12 F.3d 1292, 1300 (3d Cir. 1993)).

Safran v. Donagrandi, 2009 U.S. Dist. LEXIS 7715 ( E.D. Mich. Jan. 30, 2009)

In difficult economic times, an employer may experience difficulty in meeting the funding requirements of employee benefit plans.  Safran illustrates the risks these circumstances pose to plan fiduciaries.