§ 154-181. Responsibilities of named fiduciaries.

(a)

Fiduciary responsibilities. The employer and the members of the board of trustees who, as fiduciaries along with the employer, shall be responsible for the administration and operation of the plan and trust. The fiduciaries so named and any other person or entity to whom any fiduciary responsibilities are allocated or delegated shall discharge all duties with respect to the plan and trust solely in the interest of the participants and beneficiaries and:

(1)

For the exclusive purpose of providing benefits to participants and beneficiaries and defraying reasonable expenses of administering the plan and trust;

(2)

With the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims; and

(3)

In accordance with the terms of the plan and trust and applicable law.

No fiduciary or other person or entity to whom fiduciary responsibilities are allocated or delegated shall cause the plan or the trust to engage in any transaction that he or she knows or should know is a transaction prohibited by applicable law.

(b)

Liability of employer. Neither the employer nor any employee shall be liable for an act or omission of any person or entity named as a fiduciary in carrying out responsibilities assigned to such person or entity except to the extent that:

(1)

The employer or an employee knowingly participates in or knowingly undertakes to conceal an act or omission of such person or entity knowing such act or omission to be a breach of such person's or entity's fiduciary duty; or

(2)

It is clearly imprudent for the employer to name such person or entity as the fiduciary to whom such responsibility is assigned or to continue such person or entity as the fiduciary named to such responsibility.

(c)

Liability of fiduciary for other fiduciaries. No fiduciary named by the employer and no other person or entity to whom any fiduciary responsibility is allocated or delegated pursuant to the terms of the plan and trust shall be liable for an act or omission of any other fiduciary hereunder except to the extent that:

(1)

Such fiduciary participates knowingly in or knowingly undertakes to conceal an act or omission of such other person or entity, knowing such act or omission is a breach of such other person's or entity's fiduciary duty;

(2)

Such fiduciary, by the failure to carry out his duties in accordance with the standards set forth in subsection (a) of this section in the administration of his specific responsibilities that give rise to fiduciary status, has enabled such other person or entity to commit a breach;

(3)

Such fiduciary has knowledge of a breach by such other person or entity, unless he or she makes reasonable efforts under the circumstances to remedy such breach; or

(4)

Such fiduciary violates the standards set forth in subsection (a) of this section with respect to the allocation or delegation of fiduciary duties, with respect to the establishment or implementation of the procedure for allocation and delegation of fiduciary duties, or in naming or continuing such other person or entity as a fiduciary under any power of allocation or delegation granted to such fiduciary under the terms of the plan and trust.

(91-RC-669, § 7.1, 12-18-91)