Chicago ERISA Lawyer Discusses Pension Funds and Plans under ERISA
Not every private employer in the U.S. is required to provide access to an employer-sponsored pension or retirement plan. However, if a private sector employer does choose to do so, they do not have the discretion to completely design a plan however they wish. Instead, such pension funds and plans must comply with the Employee Retirement Income Security Act of 1974, commonly known as ERISA. The following is some information regarding pension funds and plans under ERISA.
Types Of Pension Plans
Not all pension plans are the same. Employers can choose from different types of plans, each of which has its own requirements under the law. The two main options include:
- Defined benefit plan. The employer promises to pay eligible participants a certain amount after retirement. It may be a fixed amount or may be based on factors such as salary, tenure at the company, and others; and
- Defined contribution plan. You choose how much to contribute to your pension fund directly through your payroll service. Your employer may or may not match part of your contribution and you generally have control over how to invest the funds. The most common defined contribution plan is a 401(k), while others include simplified employee pension plans (SEP), SIMPLE IRA plans, profit-sharing plans, employee stock ownership plans (ESOP), and more.
Requirements Under ERISA
No matter what type of pension fund or plan an employer chooses to provide, ERISA has several requirements for them, including the following:
- Minimum standards for eligibility to participate, how and when benefits will accumulate, when pension rights vest, when employees have non-forfeitable rights to plan benefits, and how much work an employee may miss before giving up their benefits;
- Providing employees with certain and regular information regarding the plan, including funding and plan features;
- All managers of pension plan funds must abide by a fiduciary duty when it comes to investment decisions and other management of pension plan assets; and
- Plan participants have the right to take legal action for any non-compliance with ERISA requirements.
Legal Claims Can Arise
If an employer fails to comply with a provision of ERISA and it affects employee benefits in some way, the employee has the right to file a legal claim against their employer. Claims may involve many different types of retirement plans and may arise from breach of fiduciary duty, to appeal a benefits denial, to clarify future benefits, to recover benefits owed to an employee, and many more violations of ERISA.
Contact A Chicago ERISA Pension Attorney For Assistance Today
Pension plans and funds can be confusing, as the laws surrounding these plans are complex and employers often do not provide adequate information to employees. If you believe that your rights under ERISA have been violated or have other legal questions regarding your employer-provided pension plan, you should consult with a highly experienced ERISA lawyer as soon as possible. Other attorneys who handle employment-related matters may not fully understand the legal implications of ERISA. Please call Roberts Bartolic LLP in Chicago today at 312-635-1600.