Mandating company stock investments does not shield fiduciaries, DOL says

Defined contribution plan fiduciaries must assess the prudence of a company stock fund despite plan terms mandating the investment, according to a Department of Labor (DOL) brief filed in the US Second Circuit Court of Appeals (In Re: Citigroup ERISA Litigation). The trial court ruled that because the plan required a company stock option, committee members had no discretion and were not fiduciaries with respect to offering company stock. DOL asserts this would immunize fiduciaries from responsibility for “even the most imprudent and disloyal investments” and was “flatly contradicted” by ERISA.  (Select News, 11 Feb 2010)

• Full text of DOL's amicus brief in In Re: Citigroup ERISA litigation (PDF)
• Full text of district court's opinion in In Re: Citigroup ERISA Litigation (PDF)