Fiduciary — as defined by the Employee Retirement Income Security Act (ERISA), an
individual or corporation that: (1) exercises any discretionary authority or
discretionary control in managing a pension or benefit plan or exercises any
authority or control in managing or disposing of its assets; (2) renders
investment advice for a fee or other compensation, with respect to any monies
or other property belonging to the plan; or (3) has any discretionary authority
or responsibility in administering the plan. ERISA, which was passed in 1974,
not only formalized the law associated with the administration of employee
pension and benefit plans; it also broadened the scope of such liability so
that it became a "personal" rather than simply a
"corporate" liability. The effect of this change was that soon after
ERISA's enactment, insurance companies began offering fiduciary liability
insurance policies, which were specifically designed to cover this newly
legislated exposure.