Corporations and law firms alike should seriously consider augmenting their current employee benefits plans governance structures with the addition of a welfare plan committee, primarily due to sweeping changes in the legal landscape. As new legal obligations take shape, there are fiduciary risks for welfare plans that are quite similar to those existing for retirement plans. Therefore, it would be prudent to adapt current corporate structures to these shifting legal dynamics.
Plan fiduciary risks related to welfare schemes are increasingly being recognized as analogous to the risks retired personnel face with retirement plans. If your company hasn’t considered this yet, it’s high time to revisit your company’s governance of employment benefits plans.
New developments and obligations in the legal domain are reshaping the ways corporations have to manage their employee welfare schemes. The imposition of fiduciary responsibilities on corporate bodies presiding over welfare plans is among the most significant changes seen recently. The potential for legal and financial fallout from improper handling of these responsibilities underscores the importance of instituting a welfare plan committee.
A welfare plan committee could provide an added layer of security, given that it would comprise individuals who are aware of and prepared to handle these new fiduciary duties. Furthermore, having a dedicated committee places the onus on a team of individuals rather than loosely spread out across the organization, thereby improving accountability and efficiency.
These recommendations come from the legal firm Holland & Hart – The Benefits Dial. The idea is largely built on the presumption that the earlier practices of corporate bodies regarding employee benefits governance need a thorough reassessment given the changing legal paradigm. Therefore, establishing a welfare plan committee seems to be a step in the right direction.