On June 4, 1975, the Department of Labor issued an interpretive bulletin, ERISA IB 75-4, announcing the Department's interpretation of section 410(a) of the Employee Retirement Income Security Act of 1974, insofar as that section relates to indemnification of fiduciaries. Section 410(a) states, in relevant part, that “any provision in an agreement or instrument which purports to relieve a fiduciary from responsibility or liability for any responsibility, obligation, or duty under this part shall be void as against public policy.”
The Department of Labor interprets this section to permit indemnification agreements which do not relieve a fiduciary of responsibility or liability under part 4 of title I. Indemnification provisions which leave the fiduciary fully responsible and liable, but merely permit another party to satisfy any liability incurred by the fiduciary in the same manner as insurance purchased under section 410(b)(3), are therefore not void under section 410(a).
Examples of such indemnification provisions are:
(1) Indemnification of a plan fiduciary by (a) an employer, any of whose employees are covered by the plan, or an affiliate (as defined in section 407(d)(7) of the Act) of such employer, or (b) an employee organization, any of whose members are covered by the plan; and
(2) Indemnification by a plan fiduciary of the fiduciary's employees who actually perform the fiduciary services.
The Department of Labor interprets section 410(a) as rendering void any arrangement for indemnification of a fiduciary of an employee benefit plan by the plan. Such an arrangement would have the same result as an exculpatory clause, in that it would, in effect, relieve the fiduciary of responsibility and liability to the plan by abrogating the plan's right to recovery from the fiduciary for breaches of fiduciary obligations.
While indemnification arrangements do not contravene the provisions of section 410(a), parties entering into an indemnification agreement should consider whether the agreement complies with the other provisions of part 4 of title I of the Act and with other applicable laws.
[40 FR 31599, July 28, 1975. Redesignated at 41 FR 1906, Jan. 13, 1976]
Notes of Decisions
Cited in
23
cases (
4 in the last 5 years), 1982–2026 · leading case:
Johnson v. Couturier, 572 F.3d 1067 (9th Cir. 2009).
Johnson v. Couturier, 572 F.3d 1067 (9th Cir. 2009).
· cites it 2× “29 C.F.R. § 2509.75-4 . In other words, an indemnification provision is valid if it “merely permit[s] another party to satisfy any liability incurred by the fiduciary in the same manner as insurance.”
Pfahler v. Nat'l Latex Prods. Co., 517 F.3d 816 (6th Cir. 2007).
“” 29 C.F.R. § 2509.75-4 . The Secretary explains in the regulations that “[ijndemnification provisions which leave the fiduciary fully responsible and liable, but merely permit another party to satisfy any liability incurred by the fiduciary in the same manner as insurance…”
Perelman v. Perelman, 919 F. Supp. 2d 512 (E.D. Pa. 2013).
· cites it 3× “29 C.F.R. § 2509.75-4 . “Indemnification of a plan fiduciary by (a) an employer, any of whose employees are covered by the plan” is an example of a permitted indemnification provision.”
Donovan v. Cunningham, 541 F. Supp. 276 (S.D. Tex. 1982).
· cites it 2× “The Department of Labor issued an interpretive bulletin June 4, 1975 which is contained within 29 C.F.R. 2509.75-4. 29 C.F.R. 2509.75-4 provides in pertinent part: The Department of Labor interprets this section (29 U.”
Wells Fargo Bank v. Bourns, Inc., 860 F. Supp. 709 (N.D. Cal. 1994).
· cites it 2× “Examples of such indemnification provisions are: (1) Indemnification of a plan fiduciary by (a) an employer, any of whose employees are covered by the plan____ 29 C.F.R. § 2509.75-4 . The court finds that indemnification agreements are enforceable under ERISA through federal…”
David Tullis v. UMB Bank, N.A., 423 F. App'x 567 (6th Cir. 2011).
“2007) (quoting 29 C.F.R. § 2509.75-4 ). The doctors dispute none of these points, but argue that we should wave away these provisions as a matter of equity.”
Kayes v. Pac. Lumber Co., 51 F.3d 1449 (9th Cir. 1995).
“See 29 C.F.R. § 2509.75-4 (1993) (interpreting the statute in the above manner).”
Moore v. Williams, 902 F. Supp. 957 (N.D. Iowa 1995).
“However much plaintiffs may press the issue of whether or not Williams is a fiduciary, and whether he breached his fiduciary duties, the court concludes that these are not the determinative issues on Williams’s motion for partial summary judgment to compel advancement of legal…”
Dardaganis v. Grace Capital Inc., 889 F.2d 1237 (2d Cir. 1989).
“29 C.F.R. § 2509.75-4 (1988). The department’s regulations also interpret section 1002’s definition of “fiduciary” as extending to corporate officers, directors, and partners when they personally render investment advice through their affiliated corporation.”
Pfeifer v. Wawa, Inc., 214 F. Supp. 3d 366 (E.D. Pa. 2016).
“or liability” from ERISA-mandated duties. 29 U.S.C. § 1110 (a), (b)(3).”
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