Two Hats, One Head, No Heart: The Anatomy of the ERISA Settlor/Fiduciary Distinction

Congress enacted ERISA, the comprehensive employee benefits reform statute, in 1974.ERISA created a strict fiduciary standard for those involved in the administration or management of employee benefit plans or their assets, a standard that requires such actors to make decisions solely in the interests of the plan's participants and their beneficiaries.The Department of Labor and the federal courts, however, have held that employer decisions on whether to adopt or terminate a plan, or how to design the provisions of a plan, are plan "settlor" functions, akin to a grantor's design of a trust under the common law, and thus not subject to ERISA's fiduciary duties.Courts have used this distinction between "settlor" and "fiduciary" functions to recognize the employer's own interests in employee benefit plans and to mediate between