Compliance

DoL Provides Guidance for Madoff-Maimed Plans

By Nevin E. Adams | February 05, 2009
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February 5, 2009 (PLANSPONSOR.com) - With an expanding list of retirement plans snared by investments tied to Bernard L. Madoff, the Labor Department has published some guidance for plan sponsors.

Apparently the DoL has been getting calls on the subject.   In announcing the guidance, the Labor Department noted that "Recent events regarding Bernard L. Madoff Investment Securities LLC have resulted in fiduciaries, investment managers and other investment service providers asking the Department of Labor about steps they should be taking in connection with employee benefit plans they believe may have exposure to losses as a result of plan assets being invested with Madoff entities."

  

Granted, the "guidance" is largely a common sense recitation of what any fiduciary, charged with responsibility for the assets of others, would be expected to do under the circumstances.   In fact, the Labor Department goes so far as to say that ERISA fiduciaries "…should address these events in a manner consistent with their fiduciary duties of prudence and loyalty to the plan's participants and beneficiaries."

Essentially, the guidance boils down to this:   once you have determined that plan assets were invested with Madoff entities, and it seems that material losses are likely, "appropriate steps should be taken to assess and protect the interests of the plan and its participants and beneficiaries."