Author: Jonathan Nolan, CFA
Under ERISA, plan fiduciaries shoulder a series of important responsibilities, dutybound to act solely in the best interest of plan participants and make decisions that would meet the standard of a “prudent expert.” While prudence must be demonstrated, 1988’s landmark case Whitfield v. Cohen made clear that, “Prudence is determined by the process, not the outcome.” Since 1988, courts have consistently reaffirmed this standard, making a clearly defined process the backbone of well-constructed benefit plan oversight.
It’s not enough to simply establish a process, plan fiduciaries must also be diligent in executing and documenting that process. Minutes are often the primary evidence to prove a committee met regularly, understood its role, and reviewed relevant data. Minutes allow plan sponsors to “show their work” years later and preserve institutional memory through periods of changing personnel. Without them, regulators or plaintiffs may assume a committee failed to act in a prudent manner.
What to Include in Meeting Minutes
To communicate the committee’s process effectively, minutes should capture:
Logistics and Attendees: date, time, location, and the names of all attendees, both internal and external.
Procedural Governance: the approval of prior meeting minutes to demonstrate stated governance procedures are being followed.
Substantive Topics: a high-level description of covered topics, referencing included materials such as benchmarking reports or investment performance data.
Formal Actions: a clear record of any votes taken and the associated decisions made, along with the high-level rationale linking back to plan goals or the plan’s Investment Policy Statement.
Accountability: status of to-do items from the prior meeting and a list of new action items assigned to specific parties with established deadlines.
What NOT to Include in Meeting Minutes
Meeting minutes should be substantive but not exhaustive. It is best to avoid the inclusion of:
Granular Deliberations: do not include detailed accounts of discussions or disagreements. Plaintiffs can point to these disagreements in arguments asserting the committee was uncertain or dismissive of risks.
Specific Vote Accounting: minutes should record that a decision was made rather than providing a specific accounting of how individual members voted.
Extraneous Information: avoid adding non-factual information or context that was not formally discussed during the meeting.
The Risks of Artificial Intelligence
While AI tools are rapidly improving and increasingly available, using these tools to capture and record meeting minutes can introduce significant fiduciary risk, as plaintiff’s attorneys and the Department of Labor are increasingly requesting AI-generated meeting transcripts in discovery.
If AI is used to capture meeting minutes, unaudited and unedited minutes should never be adopted. Minutes must be audited to ensure they accurately reflect the final consensus and tie to the committee’s process, rather than the midpoints of deliberation. Any associated recordings should be deleted once the formal, written minutes have been edited and finalized.
Because of discovery risks, it is safer to avoid using AI for recording altogether. AI may be better suited as a post-meeting drafting tool to organize notes recorded manually by members of the committee.
The information contained herein is provided for informational purposes only and does not constitute legal, tax, or investment advice. Plan fiduciaries should consult qualified legal counsel regarding their ERISA obligations. The information provided is from sources we believe to be reliable, but we cannot guarantee its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Francis LLC does not offer personal legal advice.
