Benefits Magazine is running occasional articles explaining the role and responsibilities of the various committees appointed by multiemployer benefit plan boards of trustees. Trustee Handbook: A Guide to Labor-Management Employee Benefit Plans, Eighth Edition provides an overview of these committees.
Serving on an employee benefit plan board of trustees is one of the most rewarding kinds of service that labor trustees can perform. But for trustees who are not experts in finance, plan administration, health care or retirement policy, or the law, being a trustee can be a daunting experience... at least initially. There is so much to absorb about such a broad spectrum of subjects that it can seem unmanageable. But there is a way for trustees to narrow down their focus to a smaller area of knowledge--through committee service.
Serving on a committee can help trustees develop a sense of familiarity and competence in one area. Committees, because of their smaller size and more focused areas of responsibility, sift through material more efficiently and in greater depth and then make recommendations to the board or, if authorized by the board, take direct action. Through that process, trustees become more comfortable with their level of expertise in the committee's area of authority.
This article will focus on the role of the legal committee.
Legal Committee Membership
The legal committee is often seen as the most intimidating on which to serve. Many trustees are concerned that they don't know enough about the law to be on the committee. For this reason, some committees may be primarily composed of trustees from both the union and management sides who are attorneys or who have a background in the law. But it is important that trustees who are not also attorneys be included on legal committees. The plan attorney typically advises the committee but does not serve on it. In the author's experience, the plan administrator attends legal committee meetings only when necessary.
One of the first things new trustees are told is that they need not be experts in investments, actuarial practice, or health care and retirement policy. Rather, it is their responsibility as fiduciaries to seek out the best expert advice they can, listen to it and ask questions to make sure they understand the advice, and then make their decisions in the most responsible way possible. If every trustee had to be an expert in every area of trustee responsibilities, it would be...