ERISA and Global Benefits
401(k) Committee Minutes, and Attorney-Client Privilege
By The Global Compensation, Benefits & ERISA Practice Group
It is generally smart to presume that the records of 401(k) and other ERISA plan committee meetings will be disclosed if plan participants commence litigation contesting plan administration or investments. There are attorney-client exceptions, however, and those were discussed and applied in Kenney v. State. St. Corp. (D. MA). Citing extensive ERISA case law, the Massachusetts district court articulated two guiding principles for exceptions to the general rule that favors disclosure, to participants, of the minutes of plan committee meetings.
First, the attorney-client privilege is available for settlor matters, such as "adopting, amending, or terminating an ERISA plan" because those decisions do not involve ERISA fiduciary functions of managing or administering the plan (PDF page 5).
Second, the attorney-client privilege is available to a plan fiduciary who seeks the advice of counsel in response to a threat of litigation by plan beneficiaries (or the government) against the fiduciary.
The State Street case involves one more dimension that is instructive, namely: the presence of Watson Wyatt as an advisor to the committee, with attorney-client privilege being lost because nothing in the minutes indicated that disclosure to Watson Wyatt was necessary for the legal advice that was provided at the meeting.
Overall, the decision in this case highlights the difficulty of establishing attorney-client privilege, and thereby the prudence of anticipating that committee minutes will be discoverable in ERISA litigation. Because statements often can be taken out of context, Plan committees should consequently consider having ERISA legal counsel either attend meetings and draft their minutes, or oversee the process for the preparation and finalization of meeting minutes.