Skip to page content
Employee Benefits Security Administration
Bookmark and Share

Frequently Asked Questions for Plan Sponsors, Fiduciaries and Service Providers

What happens if the events of September 11th have made it unclear who can act on behalf of the plan, for example, in making benefit determinations, responding to requests for information, or otherwise conducting the planís business affairs?

Under ERISA, the persons with overall responsibility for managing the planís assets and overseeing its day-to-day operations are the plan trustee or trustees and the plan administrator.  The trustees and administrator are required to be identified in the planís Summary Plan Description.  In many cases, the company that sponsors the plan is the administrator and also appoints the persons who serve as trustees.

If you have questions you may contact one of  our benefits advisors at the EBSA office nearest you, or contact EBSA by email.

As a result of the events of September 11th, some important plan documents or records might have been damaged or destroyed.  What should plan officials do in such cases?

Plan officials are required to administer ERISA-covered employee benefit plans according to the planís governing documents and records.  Where records are lost or destroyed, that does not discharge plan officials from their duty to administer the plan in accordance with its governing instruments, and to provide participants and beneficiaries with the benefits they are due under the plan.

When important plan documents are lost or destroyed, plan officials should use the most reliable evidence available in continuing to operate and administer the plan.  Plan officials should determine whether they have access to records or documents from which the lost or destroyed records could be reconstructed.  For example, service providers or participants may have copies of important plan documents.  Where a copy of a governing document cannot be located or reasonably reconstructed, the Summary Plan Description or other summary documents may constitute the most reliable evidence of the relevant plan terms.

Back to Top

Some banks, insurers and other employee benefit plan service providers have indicated that they might be willing to delay, abate, or waive fees that a plan affected by the disaster owes them.  They want to know, however, whether any of these actions would be considered a prohibited transaction under section 406 of ERISA.

In the departmentís view, a service providerís reduction, abatement or waiver of fees charged to a plan, without receipt or promise of any consideration from the plan, would not be a transaction prohibited under section 406 of ERISA.   Granting a plan a delay in payment of fees may constitute an extension of credit subject to ERISA section 406(a)(1)(B).  The department, however notes that Prohibited Transaction Exemption 80-26, 65 FR 17540 (Apr. 3, 2000) (as amended), provides that the restrictions of ERISA sections 406(a)(1)(B) and (D) and 406(b)(2) shall not apply to unsecured, interest free loans to a plan for the payment of ordinary operating expenses to the plan.  In the departmentís view, under the circumstances of the events of September 11th, a delay in payment of fees for which delay the service provider receives no consideration, if prohibited at all, would be covered under the exemption as an interest free loan to the plan for payment of ordinary operating expenses.

Further, the department on September 28, 2001 published at 66 FR 49703, Proposed Amendment to Prohibited Transaction Exemption 80-26 for other situations resulting from the events of September 11th which may have caused temporary cash flow problems that affect essential plan operations.   Such interest free loans or extensions of credit under the new exemption could be used to facilitate transfers of all or part of a participant's account from one investment option to another, participant loans, temporary overdraft protection or participant withdrawal requests.

Back to Top

A determination that a participantís death has occurred may be necessary to approve a claim for benefits (such as for survivorís benefits under a pension plan or for death benefits).   What procedures should a plan follow in cases where there is no definitive proof of a plan participantís death?

What procedures a plan should follow depends on the terms of the plan and the type of benefit claim involved.  For example, for insured benefits, the insurance company might be the party responsible for deciding benefit claims and would generally look to the insurance contract or policy for any requirements.  In cases involving benefits that are not insured, such as benefits paid out of a trust or from the employerís assets, the plan trustees or administrator has discretion to choose the procedures to use in determining whether a death has occurred unless the plan document provides for such procedures.  In such a case, the trustee or administrator would not be required to follow a state law that might be interpreted to require a delay in the determination of death.  Rather, a plan administrator could rely on evidence other than a death certificate in making a determination that a death has occurred (if it finds that it is prudent to do so), such as proof that a person cannot be located and that, based on the facts determined by the administrator, it is reasonably certain that a missing person is deceased as a result of the events of September 11th.

In this regard, Governor George Pataki of New York signed an executive order on September 24, 2001, which includes alternative death certificate requirements that are intended to help families of missing victims of the World Trade Center attack cope with estate and financial matters.

Back to Top

What should a plan administrator do if it cannot locate a plan participantís beneficiary designation because the planís designation records were destroyed?

In deciding to pay any benefit to a potential beneficiary, the administrator must act prudently, in the interests of participants and beneficiaries under the relevant facts and circumstances, and must use reasonable procedures in making determinations as to who is a participantís beneficiary.

When an administrator receives evidence of claims of beneficiary status, the administrator must take reasonable steps to determine its credibility.  If the administrator finds there are credible questions as to the validity of the evidence, the administrator must decide how best to resolve the question of the validity of the evidence without inappropriately spending plan assets. The appropriate course of action will depend on the actual facts and circumstances of the particular case.

Where ERISA Section 205 governs the plan, a surviving spouse is deemed to be the participantís beneficiary unless there is no surviving spouse or the surviving spouse has consented to a waiver of benefits in the manner required under ERISA Section 205(c)(2).  If a plan administrator receives information calling into question that the participantís surviving spouse is the beneficiary, the plan administrator must take reasonable steps to determine the credibility of that information to decide the claim for benefits.  In making such a determination, the plan administrator in its discretion may rely on a document that appears to be a duplicate of a participantís beneficiary designation if the plan administrator has adopted and uses reasonable procedures designed to detect a forgery.

Back to Top

What should plan administrators do if they have difficulty meeting the deadline for filing a Form 5500 Annual Return/Report or for furnishing a summary plan description, summary of material modifications, summary annual report, or other disclosure required by Title I of ERISA?

EBSA recognizes that plans, plan fiduciaries, employers, labor organizations, and service providers affected by the events of September 11th will encounter a wide variety of compliance-related issues and concerns over the next few months.  While there may be instances when full compliance with Title I disclosure obligations may not be possible, plan administrators should make appropriate efforts under the circumstances to act reasonably, prudently and in the interest of the planís participants and beneficiaries who rely on their health, pension and other benefits for their physical and economic well-being.

The Department of Labor, the Internal Revenue Service and the Pension Benefit Guaranty Corporation granted an extension to plan administrators, employers and other entities who file the Form 5500 and Form 5500-EZ as a result of the September 11th terrorist attacks.  Information regarding the extension is available at the EFAST Website or by calling EBSA's Toll-Free Employee & Employer Hotline number, 1.866.444.EBSA (3272).  Questions and Answers relating to the extension are also available.