Notifying the DOL of a Fiduciary Breach Will Not Cause Fiduciary Status (Posted December 15, 2003) Technical Tip 36: The following question and answer are from the DOL Q&A Session at the 2000 ASPPA Annual Conference: In cases where the client committed a fiduciary breach, the participants often call the TPA. What is wrong with informing the participant to call the DOL? If a TPA informs the DOL that a fiduciary breach has occurred, is the TPA then deemed to be a fiduciary? In other words, are you damned if you do, damned if you don’t? DOL Response: The DOL encourages participants to call the PWBA [now the EBSA] because it is one of the best targeting methods for PWBA in identifying potential violations. Each of the field offices have Benefit Advisors who handle participant calls. The participant calls are evaluated to determine whether they are good targets for opening an investigation. The mere fact that the TPA informs the DOL that a fiduciary breach has occurred does not necessary make the TPA a fiduciary. PWBA Investigators will conduct an analysis of the actions of the TPA with respect to the fiduciary breach to determine whether the actions of the TPA or any service provider makes them a functional fiduciary. The functional test will examine what actions the TPA or service provider are doing rather than what the contract says or what they say they are doing. Generally, any person who exercises authority or discretionary control over plan assets is a fiduciary. Caveat: The answer was drafted by the program moderators, including Fred Reish, based on their understandings of discussions with four senior officials of the Employee Benefits Security Administration (EBSA) of the U.S. Department of Labor. As a result, it does not represent a formal or binding position statement by the EBSA. View all Tips © 2010 Reish Luftman Reicher & Cohen, a Professional Corporation Important notice: Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner's situation. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of your situation.