Plan Fiduciary Must Disclose Material Information Regarding Potential Service Providers Even If Fidcuciary is Not Participating in Decision-making About that Service Provider in order to Avoid Conflict of Interest
ERISA prohibits plan fiduciaries from acting, in his individual or other capacity, in any transaction involving the plan on behalf of a party whose interests are adverse to the plan.
A fiduciary may avoid this prohibition by removing himself or herself from all consideration whether or not to hire a service provider in which the fiduciary has an interests. The DOL ruled that even if the plan fiduciary removes himself or herself from such consideration, the fiduciary still has an overriding duty to the plan to disclose all material information regarding potential service providers that would be necessary for other plan fiduciaries to make an appropriate and meaningful decision.
