Pension plans are generally associated with employment. An employer takes a portion of its own funds and invests those funds on behalf of the employee. Once the employee retires, they are entitled to a specific amount of money, plus the amount of money that the investment earned. This money is known as retirement income and includes the specific sum as well as the investment income. Retirement income payments may be guaranteed until the end of the worker’s life.
A pension plan is similar to a retirement plan, although there are some slight differences between the two. Many retirement plans that are available through employers, such as a 401(k), place the responsibility on the employee to contribute to their plan. Additionally, the employee is responsible for choosing their retirement investments. On the other hand, pension plans guarantee a specific amount of monthly income in retirement. Additionally, all investment risks fall to the employer, instead of the employee.
What Are Pension Plan Disputes?
The most common disputes regarding pension plans arise over payments made to those who are retired, through the pension funds. Such a situation generally involves some conflict between the retiree and their former employer. However, disputes similar to this example could also involve other parties.
Some of the most common examples of pension plan disputes include but may not be limited to:
- Disagreement regarding the timing or amount of the payments from the pension plan
- Disputes over taxes, insurance, and/or other related matters
- Disputes involving the denial of rightful pension benefits
Some retirement benefit disputes may also apply to pension plan disputes. This could include premature or forced retirement, which could affect an employee’s eligibility status. Various issues involving employment discrimination may also arise during pension plan disputes. Some pension benefits can be shared with other parties, such as a spouse or significant other. This could lead to pension plan disputes connected to other legal proceedings, such as a divorce. Another example would be the distribution of property according to a person’s will once they die.
A pension plan dispute lawyer can assist in the dispute resolution process. As they have a better understanding of the laws governing pensions and retirement benefits, as well as the laws governing property distribution, they will know the best way to proceed.
How Are Pension Plan Disputes Resolved?
Any pension plan dispute resolution must adhere to the specific statutes governing pension plans. The first of such statutes is the Pension Protection Act of 2006, or “PPA.” In short, PPA requires employers to take certain precautions in order to ensure pension plans are properly funded. It exists to protect employees and their retirement funding by enforcing provisions that provide requirements for companies whose pension plans are underfunded.
Another statute governing pension plans is the Employee Retirement Income Security Act, or “ERISA.” ERISA was created to reform pension and retirement plans for those who work in the private sector, and prevent the abuse of those plans by their administrators.
Among other provisions, ERISA requires that administrators provide employees with information regarding the general features of the plan and how it is funded. This also includes information about vesting, as well as the claims and appeals process for participants. ERISA has set minimum standards for pension plans which guarantees that they cannot be unfairly denied or revoked.
These laws work together to lay out specific guidelines that are to be followed in terms of pension benefits. Additionally, these laws provide some protections for employees if certain types of plans cannot pay all of the benefits that the employees are rightfully entitled to. PPA and ERISA maintain reporting requirements which act to ensure compliance, and therefore reduce the likelihood of disputes.
Should disputes arise, routes for resolving those disputes generally include following legally required internal (or human resources) dispute resolution protocol. In some cases, the dispute can only be resolved through a retirement plan lawsuit filed by the employee in order to potentially recover lost benefits.
What Are the Claim Procedures for a Pension Plan Dispute?
Under ERISA, all pension plans are to have an established claims procedure. Once your claim has been filed, you must receive a written decision regarding your claim within a “reasonable” time. This timeframe may vary based on the type of pension plan, as well as the nature of the claim. If your benefits have been denied, the response must provide specific reasons as to why they were denied. It must explain the basis for determining any benefits that were granted.
After receiving the written decision regarding your pension plan claim, you have sixty days in which to file a written appeal. The rules regarding where and how you are to file your appeal must be explained in your plan’s summary. If your claim is still denied once you have appealed the decision, you have the right to pursue your claim in either a state or federal court.
If the process gets to that point, you should consult with a pension plan dispute lawyer. They will be able to better understand the details of your plan, as well as the rules regarding the appeals process. The attorney can walk you through the process and ensure all deadlines are met, giving you the best chance of success. And, if other employees have similar disputes, you could consider filing a class action lawsuit. A pension plan dispute lawyer can also assist in putting such a lawsuit together.
Legal remedies for pension dispute cases could involve the recovery of lost benefits, as previously mentioned. They could also include the court ordering the employer to adjust their pension policies; in cases involving misrepresentation or fraud, criminal consequences may even occur.
Do I Need a Lawyer for Help to Resolve a Pension Plan Dispute?
If you have a pension plan dispute, you may be confused and overwhelmed about how you can resolve the issue. A pension plan dispute lawyer can provide you with the best possible representation for your case.
There are several different categories of pension plan disputes that may arise, such as disputes over pension benefits, benefit calculation, and beneficiary issues. An attorney can help an individual with all of these issues.
Pension Benefits
In some situations, you may have thought you would receive certain retirement benefits but your employer did not agree. This may occur because of misinformation related to the employer’s ability to offer you the benefits you should receive based on your years of service, salary, or other factors.
All businesses have to follow criteria for eligibility that includes the individual’s age, their years of service, and other details to calculate their retirement plan. If you believe you did not receive fair retirement benefits according to the factors, your lawyer can file a lawsuit against your employer.
Benefit Calculation
Benefit calculation is an issue that employers and employees frequently disagree upon. An employer will likely calculate the benefits based on the age of the employee, their position, and their years of service at the business.
Sometimes, a company will offer employees the ability to retire early. However, this typically comes with certain terms and conditions attached, such as pension cuts, minimal benefits, or other reductions.
If either you or your former employer misunderstood these terms, it may lead to an early retirement dispute. Your lawyer can help you resolve any benefit reductions or changes with your former employer.
Beneficiary Issues
Some business entities will offer retirement plans to former employees that allow them to designate a beneficiary or beneficiaries. These individuals will receive the benefits if the retirement plan holder passes away.
It is important to note that some companies only allow you to choose your immediate family members, such as your spouse or children, to be named as a beneficiary. In some instances, your family members may have to resolve a dispute related to receiving their benefits.
Your lawyer can help ensure that your beneficiaries are properly designated and, in the event of your passing, can help them receive the benefits you want them to receive. In addition, your lawyer can provide you with information regarding class action lawsuits and advise you on moving forward if the option is available.
A pension plan dispute lawyer, such as a workers’ compensation lawyer, will represent your interests in court as needed. This includes representing you any time you have to appear in court as well as assisting with any negotiations with your former employer.
