May 19, 2004
BB 04—58

In this issue:

  • DOL Launches National Fiduciary Education Campaign
  • DOL Proposes Partial Settlements in Cases Against Enron Corporation
  • House Rejects Bill Requiring Employers to Pay for Uncompensated Care of Illegal Immigrants

DOL Launches National Fiduciary Education Campaign

On May 18, The Department of Labor's (DOL) Employee Benefits Security Administration unveiled the "Getting It Right—Know Your Fiduciary Responsibilities" campaign designed to educate employers and service providers about their obligations under the Employee Retirement Income Security Act (ERISA).

The program will focus on steps for avoiding the most common problems encountered by the DOL during enforcement activities, and includes a series of seminars emphasizing the obligation of plan sponsors and other fiduciaries to:

  • Understand the terms of their plans;
  • Select and monitor service providers carefully;
  • Make timely contributions to fund benefits;
  • Avoid prohibited transactions; and
  • Make timely disclosures to participants and beneficiaries and reports to the government

The seminars will be held as follows:

  • June 17: Miami, FL
  • July 29: Columbus, OH
  • September 8: Burlington, MA
  • September 23: Phoenix, AZ

The campaign also includes educational materials on topics such as understanding fees, selecting an auditor, and meeting fiduciary responsibilities. The materials and information on the upcoming seminars are available at For more information, contact Jan Jacobson, Council director, retirement policy, at (202) 289-6700.

DOL Proposes Partial Settlements in Cases Against Enron Corporation

The Department of Labor (DOL) has filed proposed partial settlements to restore at least $66.5 million to Enron Corporation's 401(k) and employee stock ownership plans, according to a May 12 press release. The proposed settlements cover agreements in both a lawsuit filed by the DOL as well as a private class action litigation filed on behalf of plan participants. The agreement in the DOL action covers the former outside directors of Enron's board of directors, while the proposed partial private litigation settlement would also cover the outside directors, as well as the plan's administrative committee and some others. In addition to the monetary damages, the outside directors are barred from knowingly assuming fiduciary responsibility of ERISA-covered plans for five years unless agreed to by the DOL. The settlement must be approved by the judge in the federal district court in Houston.

If approved, neither settlement would apply to the company itself, its former executives and inside directors Kenneth L. Lay and Jeffrey K. Skilling, former auditor Arthur Andersen, and former directed trustee Northern Trust Co. (both Arthur Andersen and Northern Trust Co. were named in the private litigation but not the DOL lawsuit).

The DOL suit, filed on June 26, 2003, alleged that the defendants violated the Employee Retirement Income Security Act (ERISA) by failing to protect the retirement accounts of Enron employees and by failing to consider the prudence of Enron stock as an appropriate investment for the plan. DOL originally asked the court to force the defendants to restore to the plan beneficiaries all losses with interest while forfeiting their right to benefits from the plans. The court also seeks to permanently bar all defendants from serving as fiduciaries to any ERISA plan.

In late 2002, DOL filed an amicus brief in the private class action suit against Enron. A summary and analysis of this amicus brief, prepared by Council member Martha Hutzelman of Ice Miller, and a summary of Enron litigation, prepared by Groom Law Group, are available on the Council Web site. For more information, contact Jan Jacobson, Council director, retirement policy, at (202) 289-6700.

House Rejects Bill Requiring Employers to Pay for Uncompensated Care of Illegal Immigrants

On May 18 the House of Representatives defeated the "Undocumented Alien Emergency Medical Assistance Amendments" (H.R. 3722) by a vote of 88-331. The bill would have required health care providers to report illegal immigrants to the Department of Homeland Security in order to receive money from a $1 billion fund established in the Medicare Modernization Act of 2003 to reimburse hospitals for uncompensated treatment they must provide under a federal mandate.

The bill also would have made employers liable for reimbursing the costs of health services rendered to undocumented workers unless the employer certified that it verified the worker's eligibility for employment at the time of hire and provided medical insurance and workers' compensation benefits.

Hospitals, immigration advocacy groups and employer groups opposed the measure. The Council will continue to monitor this issue, though it is unlikely to be considered again this year in either the House or the Senate, given the overwhelming vote by which the bill was rejected. For more information, please contact Maria Ghazal, Council director, health policy, at (202) 289-6700.


The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council's members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.