COMMITTEE ON CODES OF CONDUCT
ADVISORY OPINION NO. 33
Service as a Co-trustee of a Pension Trust.
The Committee has received an inquiry asking whether it is proper
for a federal judge to continue to serve as co-trustee of a federal savings
and loan pension trust, which office the judge had assumed before beginning
judicial service.
The judge submitted the following description of the trust and the
trustee's duties:
The trust is almost a dry trust as it is funded by an insurance
policy, which policy is paid for directly by the association. The pension
trust is one approved by the Internal Revenue Department and hence there
are no policy determinations relating to the pension trust. I, of course,
render no legal advice to the trust and the trust has never been in litigation
and it is not likely to be as no difficulty has been experienced during
its almost 17 years of operation. The trust covers the officers and employees
of the association who qualify under its terms. I received no compensation
nor any expenses attendant to this fiduciary obligation which I have continued
as a matter of past loyalty to a valued former client. The duties entailed
are nominal and consist of signing about two checks a year to the insurance
company.
Such a trust would appear to be a part of the arrangement deemed necessary
for managing the affairs of a business, within the meaning of Canon 5C(2)
of the Code of Conduct for United States Judges. It can be viewed as a
segment of a business.
The duties of a co-trustee are, while nominal, fiduciary in nature.
Canon 5D would seem to rule out service as a fiduciary for other than a
trust for a member of the judge's family. Service as a fiduciary for other
than a member of the family is permitted to continue in limited circumstances,
as provided in the Code's "Applicable Date of Compliance" section, but
this section seems to contemplate a relationship with an individual rather
than with a pension plan. In any event, even such a nonfamily fiduciary
relationship is to be terminated as stated in the Compliance section.
A third source of guidance to be derived from the canons is the
bar, in Canon 5B(3), to a judge's giving any investment advice to a civic
or charitable organization which the judge may serve as trustee or director.
In the pension trust above defined, it might be presumed that there could
be some residual duty of giving advice on investments. If so, Canon 5B(3)
would seem, a fortiori, to apply.
If, in fact, no duties other than the ministerial one of check signing
are involved, the practical likelihood of conflict or litigation may be
remote. But the canons, collectively, if not individually, bar the co-trustee
relationship.
March 4, 1974
Revised January 16, 1998