Pension & Retirement

The Employee Retirement Income Security Act is a federal law that establishes minimum standards for voluntarily established pension and other benefit plans in the private sector. ERISA does the following:

• ERISA requires plans to provide participants with information about the plan including important information about plan features and funding. The plan must furnish some information regularly and automatically. Some documents are available free of charge, some are not. The most a plan can charge for a document that they are not otherwise required to disclose is 25 cents per page.

• ERISA sets minimum standards for participation, vesting, benefit accrual and funding. The law defines how long a person may be required to work before becoming eligible to participate in a plan, before being allowed to accumulate benefits, and how long a person must work before obtaining a non-forfeitable right to pension benefits. The law also establishes detailed funding rules that require plan sponsors of “defined benefit” pension plans to provide adequate funding.

• ERISA requires accountability of plan fiduciaries. ERISA generally defines a fiduciary as anyone who exercises discretionary authority or control over a plan's management or assets, including anyone who provides investment advice to the plan. Fiduciaries who do not follow the principles of conduct may be held responsible for restoring losses to the plan.

• ERISA gives participants the right to sue for benefits, for breaches of fiduciary duty and for violation of the specific rules and protections contained in the law. In certain circumstances a pension plan participant must appeal to the plan fiduciaries before bringing a lawsuit and there may be strict time limits for filing a plan “appeal” or for initiating a lawsuit even, in some cases, where the plan fiduciaries have not ruled on the appeal.

• ERISA guarantees payment of certain benefits if a defined benefit plan is terminated through a federally chartered corporation, known as the Pension Benefit Guaranty Corporation (PBGC).

The primary responsibility of fiduciaries is to run the plan solely in the interest of participants and beneficiaries and for the exclusive purpose of providing benefits and paying plan expenses. Fiduciaries must act prudently and must diversify the plan's investments in order to minimize the risk of large losses. In addition, they must follow the terms of plan documents to the extent that the plan terms are consistent with the Employee Retirement Security Act (ERISA). They also must avoid conflicts of interest. In other words, they may not engage in transactions on behalf of the plan that benefit themselves or parties related to the plan, such as other fiduciaries, services providers or the plan sponsor (employers and unions).

Fiduciaries who do not follow these principles of conduct may be personally liable to restore any losses to the plan, or to restore any profits made through improper use of plan assets. Courts may take whatever action is appropriate against fiduciaries who breach their duties under ERISA including their removal.

ERISA also protects your plan's assets by requiring that those persons or entities who exercise discretionary control or authority over plan management or plan assets, anyone with discretionary authority or responsibility for the administration of a plan, or anyone who provides investment advice to a plan for compensation or has any authority or responsibility to do so are subject to fiduciary responsibilities. Plan fiduciaries include, for example, plan trustees, plan administrators, and members of a plan's investment committee.

Multi-employer union pension plans may terminate benefits and demand repayment based on claims the retiree returned to employment after retirement that was “prohibited” or that they did not properly retire. We’ve successfully handled multiple cases involving claims for unlawful suspension or termination of pension benefits based on assertions that certain post-retirement employment is prohibited or disqualifying.

The law requires a pension plan to increase your pension benefits or pay you past benefits with interest if you wait until you are past “normal retirement age” before you collect your pension benefits- so long as you were not otherwise working in “prohibited” or “suspendible” employment. Some pension plans define “normal retirement age” as age 60 or 62 while most define it as age 65. If you first apply for benefits after your plan’s “normal retirement age” you may be entitled to increases benefits or payment of benefits you would have received if you had applied for a pension when you turned 65 ( or such earlier “normal retirement age” that the plan may specify. We’ve successfully handled multiple cases involving claims for additional pension benefits for persons who did not collect benefits from the time they attained “normal retirement age” under the plan.

In the construction trades and other industries, many plans have agreements allowing employees to receive pension credit for working out of state or under a different local’s jurisdiction. Some plans have failed to apply all monies received under reciprocity agreements correctly, thereby depriving employees of pension benefits they are entitled to. Some pension plans have unlawfully imposed charges or deductions on the monies received where the reciprocal agreement says no charges may be imposed. If your pension plan had reciprocal or reciprocity agreements with unions in other localities, ask to see the agreement and the contributions credited to your account. Make sure you are getting all the service credit, benefit credit, and benefits you are entitled to. We have successfully challenged a union pension plan’s failure to allocate reciprocity payments to employees’ individual accounts.

We’ve represented several retirees against claims that their benefits were overpaid or who almost lost their pension benefits due to corporate restructuring. In one instance, a retired mine supervisor had been receiving a pension for 18 years and was 79 years old when he received a letter from the Retirement Plan that stated he would no longer receive his benefits based on an alleged error and that he had accumulated an over-payment of $18,363.44. Martin & Bonnett worked on behalf of the retiree, his benefits were reinstated, and the claim for repayment was dropped.

ERISA requires plan administrators - the people who run plans - to give plan participants in writing the most important facts they need to know about their retirement plans including plan rules, financial information, and documents on the operation and management of the plan. Some of these facts must be provided to participants regularly and automatically by the plan administrator. Others are available upon request, free-of-charge, or for copying fees. All requests for plan documents should be made in person or in a writing addressed to the “Plan Administrator.”

One of the most important documents participants are entitled to receive automatically when becoming a participant of an ERISA-covered retirement plan or a beneficiary receiving benefits under such a plan, is a summary of the plan, called the summary plan description or SPD. The plan administrator is legally obligated to provide to participants, free of charge, the SPD. The summary plan description is an important document that tells participants what the plan provides and how it operates. It provides information on when an employee can begin to participate in the plan, how service and benefits are calculated, when benefits becomes vested, when and in what form benefits are paid, and how to file a claim for benefits. If a plan is changed, participants must be informed, either through a revised summary plan description, or in a separate document, called a summary of material modifications, which also must be given to participants free of charge.