Untrustworthy: ERISA's Eroded Fiduciary Law

58 Pages Posted: 8 Nov 2016 Last revised: 8 Aug 2017

See all articles by Peter J. Wiedenbeck

Peter J. Wiedenbeck

Washington University in St. Louis - School of Law

Date Written: November 8, 2016


The trust law analogy has come to dominate judicial thinking about employee benefit plans. Yet despite its rise to rhetorical prominence, ERISA fiduciary law has been dramatically transformed by a series of uncoordinated low-visibility judicial decisions on multiple fronts. These apparently unconnected case law developments reveal a startling pattern of mutually reinforcing restrictions on ERISA’s protection of pension and welfare benefits. This study chronicles ERISA’s trust law turn to expose how untrustworthy workers’ benefit safeguards have become. Both the scope and the intensity of fiduciary oversight have been radically pruned back in the courts. Notwithstanding the congressional declaration that attempts to relax workers’ federal fiduciary protections “shall be void as against public policy,” the Supreme Court has shown the way to curtail fiduciary obligations. That de facto or implicit exculpation, combined with unilateral employer control over both plan terms and plan interpretation, indicate that the federal courts have defanged — or deranged — ERISA’s fiduciary regime. Despite their importance to personal financial security and overall economic welfare, workers repeatedly discover the fragility of the interests they earn under employer-sponsored health insurance and retirement savings programs. The new property in employee benefits is, along multiple dimensions, remarkably weak property.

Keywords: ERISA, Employee Retirement Income Security Act, Fiduciary Duties, Employee Benefit Plan, Trust Law, Pension Plan, Welfare Plan, Exclusive Benefit Rule, Duty of Loyalty, Duty of Care, Exculpatory Provisions, Conflicts of Interest, Fiduciary Definition

Suggested Citation

Wiedenbeck, Peter J., Untrustworthy: ERISA's Eroded Fiduciary Law (November 8, 2016). Forthcoming: 59 William & Mary Law Review ____ (2018), Washington University in St. Louis Legal Studies Research Paper No. 16-11-01, Available at SSRN: https://ssrn.com/abstract=2865752 or http://dx.doi.org/10.2139/ssrn.2865752

Peter J. Wiedenbeck (Contact Author)

Washington University in St. Louis - School of Law ( email )

Campus Box 1120
St. Louis, MO 63130
United States

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