WHAT PRIVATE EQUITY FUNDS SHOULD KNOW ABOUT ERISA
By Joe Urwitz
Basics of ERISA Coverage
The Employee Retirement Income Security Act of 1974, as amended
(ERISA) imposes numerous duties on fiduciaries holding employee
benefit plan assets. This includes the manager of a private equity
fund who is responsible for investing the assets of a fund that
holds plan assets. Failure to follow fiduciary duties can result in
lawsuits, Department of Labor (DOL) investigations and penalty
taxes, for which fiduciaries may be personally liable.
Under ERISA, individuals who i) exercise authority or control
respecting the management or control of ERISA plan assets, or ii)
give investment advice for a fee or other compensation with respect
to the assets of an ERISA plan, or have any authority or
responsibility to do so, is an ERISA fiduciary.
