Fiduciaries Ordered to Pay Benefits Personally

Larry Beebe, CPA

A U.S. District Court in Oregon ruled that the trustees of a retirement plan must pay a participant’s retirement fund distribution from their own personal funds as a result of failing to prudently invest plan assets.

The plan had invested its assets in a single plat of undeveloped land owner by a real estate development company and in loans to that development company. The development company could not pay on any of its obligations. Because the trustees breached their fiduciary duty to diversify plan assets and by failing to diligently act in collecting on loans by the plan the court ordered the trustees to pay the distribution request from their own personal assets.

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