Practical Considerations In Pension Plan Administration During COVID-19

Plan administrators are subject to fiduciary duties and a duty of care in plan administration. The COVID-19 pandemic does not change this but likely creates practical difficulties in discharging the duties. This article highlights various difficulties an administrator may face as a result of the pandemic.

Conflict of interest

One of the key fiduciary duties of a plan administrator is to avoid conflicts of interest. There is always a risk of a conflict (potential or actual) where the employer is also the plan administrator. Financial difficulties due to the pandemic make the risk even more apparent when the employer has become unable to meet its obligations under the plan. An employer who is also the administrator should be sensitive to situations that may put itself in a conflict of interest and should take appropriate action in addressing the conflict.