The Employee Retirement Income Security Act ("ERISA") is a federal law that protects participants of employee benefit plans. Congress attempted to achieve this by assigning duties to co-fiduciaries that are responsible for managing plan assets. Despite allocating a variety of obligations among co-fiduciaries, ERISA does not specify whether co-fiduciaries can seek contribution or indemnification as an equitable remedy. To date, the circuit courts are split as to whether such equitable remedies should be implied under ERISA.
In Chesemore v. Fenkell, the Seventh Circuit incorrectly held that ERISA authorized the district court to provide contribution or indemnification to co-fiduciaries. The statute's express language makes it abundantly clear that Congress was not concerned about remedying co-fiduciaries. Moreover, implying such rights under ERISA will only increase the cost of litigation without deterring liable parties. As the purpose of ERISA is geared towards deterring the mismanagement of plan assets, the Seventh Circuit failed to incorporate ERISA's legislative history and the applicable federal common law.
Nicholas L. DeBruyne,
ERISA Remedies: Rethinking Indemnification and Contribution for Co-Fiduciaries,
Seventh Circuit Rev.
Available at: http://scholarship.kentlaw.iit.edu/seventhcircuitreview/vol12/iss1/8