Opinion ID: 781612
Heading Depth: 2
Heading Rank: 1

Heading: erisa requirements

Text: 27 As this Court has recently observed, ERISA was enacted in order to protect employee pension and retirement plans. Harris Trust & Sav. Bank v. John Hancock Mut. Life Ins. Co., 302 F.3d 18, 26 (2d Cir.2002) (citing H.R. REP. No. 93-533, at 1 (1974), reprinted in 1974 U.S.C.C.A.N. 4639, 4639). One way the Act pursues this purpose is by imposing certain general fiduciary duties applicable to the management of [ERISA-regulated] plans. Varity Corp. v. Howe, 516 U.S. 489, 496, 116 S.Ct. 1065, 134 L.Ed.2d 130 (1996). At oral argument, Salovaara declined to concede that he was a fiduciary with respect to the Plan. It is clear to us, however, that he is: During all relevant times he was a 50% co-owner of SSP, which is indisputably a fiduciary pursuant to ERISA. Furthermore, he represented himself as an ERISA fiduciary in his complaints in Salovaara II, and Hindes, two of the very court proceedings at issue in this appeal. Finally, and most importantly, Salovaara alleges that he is entitled to reimbursement from the assets of the partnership for the costs associated with independently bringing the six underlying lawsuits. Thus, under his own interpretation of the South Street partnership agreement, Salovaara effectively exercised discretionary control over the disposition of ERISA plan assets, so as to trigger ERISA's fiduciary duty requirements. 28 Section 404(a) of the Act contains a clause that imposes a general standard of duty on all fiduciaries: 29 (1) [A] fiduciary shall discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries and — 30 (A) for the exclusive purpose of: 31
32 29 U.S.C. § 1104(a)(1)(A)(i). This statutory duty of loyalty has been described by this Court as requiring that a fiduciary act, in Judge Friendly's felicitous phrase, with an eye single to the interests of the participants and beneficiaries. Donovan v. Bierwirth, 680 F.2d 263, 271 (2d Cir.). This requirement has also been described as the exclusive benefit rule. New England Health Care Employees Union, Dist. 1199 v. Mount Sinai Hosp., 65 F.3d 1024, 1032 (2d Cir.1995). 33 ERISA further seeks to safeguard the interests of fund recipients by imposing strict regulations on the ability of parties in interest with respect to a fund to transfer moneys from the fund to themselves or to third parties. The basic rule is set forth in ERISA section 406: 34
35 (1) A fiduciary with respect to a plan shall not cause the plan to engage in any transaction, if he knows or should know such transaction constitutes a direct or indirect — 36 (D) transfer to, or use by or for the benefit of, a party in interest, of any assets of the plan[.] 37 29 U.S.C. § 1106. Section 406 thus acts as a blanket ban, exempting only the specified transactions that are enumerated in Section 408. Section 408 provides, in relevant part: 38
39 The prohibitions provided in section 1106 of this title shall not apply to any of the following transactions: 40 (2) Contracting or making reasonable arrangements with a party in interest for office space, or legal, or accounting, or other services necessary for the establishment or operation of the plan, if no more than reasonable compensation is paid therefor. 41