1. Fingers are pointed everywhere.
Fiduciary suits can — and do — target; directors, officers, Human Resource managers, plan fiduciaries, and other executives, as well as consulting firms, lawyers and other people who provided advice to the organization being sued.
2. Governmental regulators want their piece too.
Given the nature of pension plans, if employees or retirees suffer from bad fiscal management and oversight, the regulators step in and punish those who allowed it to take place under their watch.
3. Many fiduciaries are widely exposed, but don't know it.
Many executives are unaware how far reaching their fiduciary duty is. In addition to pension plans and trust funds, there are other funds that fall into the same category, such as profit sharing plans, employee stock ownership plans, and even health and wellness plans. In addition, many directors and officers believe that the decisions made under their watch are protected by the company's D&O policy. In most cases, they aren't as D&O policies exclude fiduciary liability exposures.
4. It's not all about money.
Employers have many fiduciary duties. Although the press of the Enron and Worldcom employee pension plans got our attention, the courts have been receptive to broader interpretations for things such as employee discrimination, denial of benefits claims, reduction of benefits limits and other HR issues. While the focus might not be on a financial payout, it still costs a company a tremendous amount of money to defend.
5. It *is* about the money.
The Towers Perrin Fiduciary Liability Survey states that it costs, on average, $126,000(USD) to defend a Fiduciary claim. During the same time period, the average court award was $1.25 million (USD). Of course, those are the averages. It is not uncommon for awards to reach tens, if not hundreds of millions, of dollars.