Employment law case analysis 2-3 pages
The administrators of Kent Company’s pension plan decided to use the pension plan assets to purchase the company’s stock to help defend the company against a hostile takeover by PWS Co.; the administrators were major shareholders of Kent Co. The takeover attempt was eventually defeated, and Kent Co. was then taken over by a “white knight”, West Co. The takeover by West generated a substantial profit to the pension plan fund and to the administrators through the sale of their shares of stock in Kent to West. After the takeover was completed, the Secretary of Labor brought a suit against the administrators for breach of their fiduciary duties under ERISA; the administrators argue that the fund suffered no loss, and actually made a substantial gain.
The Employee Retirement Income Security Act (ERISA) exists to protect retirement plans assets by requiring that the person’s selected to oversee the management of such plans are subject to fiduciary duties. The main duties of fiduciaries according to ERISA is to run the retirement plan in the interest of the participants and beneficiaries (Hutchinson & Ifshin, 1978). The fiduciaries are required to follow all the rules and regulations of the plan an…