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Category: Pension

Employers Must INDEFINITELY Maintain Records Sufficient to Determine Their Employees’ Pension Eligibility

Employers Must INDEFINITELY Maintain Records Sufficient to Determine Their Employees’ Pension Eligibility

I cannot tell you how many times over the years pension plan participants have called me to complain that their employer or pension plan administrator has told them they cannot find documents needed to determine whether they are eligible for a pension and, if so, the amount. That is ridiculous! Under §209 of the Employee Retirement Income Security Act (ERISA), employers must maintain records with respect to each of their employees sufficient to determine any benefits which are, or may…

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Beware Before You Sign a Separation Agreement: It Could Impact Your Pension Benefits

Beware Before You Sign a Separation Agreement: It Could Impact Your Pension Benefits

In conjunction with an employee’s separation of employment, employers frequently ask the employee to sign a separation agreement in exchange for a sum of money, assistance in finding another job, or some other consideration. For many employees, the lure of the money motivates them to sign the separation agreement. However, most separation agreements include a broad release of claims against the employer and its agents, affiliates, representatives, employees and other related individuals and entities. If you later discover that your…

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An Idea Whose Time Has Come: A National “Lost and Found” for Retirement Accounts

An Idea Whose Time Has Come: A National “Lost and Found” for Retirement Accounts

As explained in my prior Post, each year millions of Americans lose thousands of dollars in retirement savings in the process of changing jobs. The problem largely results from employers shifting from defined benefit plans that pay an annuity for life to defined contribution plans, like 401(k) plans, that pay a lump sum upon separation from employment or at a later date when the participant elects to take his/her lump sum. If a separated participant chooses to leave the lump…

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Did You Know? Crimes Committed By Your Spouse May Be Detrimental to Your Pension

Did You Know? Crimes Committed By Your Spouse May Be Detrimental to Your Pension

Our intuition suggests this cannot be the case. After all, YOU did not commit the crime. However, at least in Texas (and possibly some other states) our intuition would be wrong if the retirement savings were jointly possessed during the marriage. A recent Fifth Circuit Court of Appeals decision makes this point abundantly clear. United States v. Berry, No. 19-20050, 2020 U.S. App. LEXIS 6260 (Feb. 28, 2020) In the Berry case, Gwendolyn Berry was convicted of wire fraud, mail…

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Out of a Job Due to Covid-19? You May Be Eligible for a Fully Vested Pension

Out of a Job Due to Covid-19? You May Be Eligible for a Fully Vested Pension

Most of us would be hard pressed to find anything positive to say about the Covid-19 pandemic. But, if you lost your job on account of the pandemic and were a participant in a pension plan where you had not yet vested in your pension, there may be a wee bit of good news. Under the Internal Revenue Code, participants automatically become vested in their accrued pension benefits upon the termination or partial termination of the pension plan. In the…

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It’s High Time to Do-Away With the “Arbitrary and Capricious” Standard of Review for Employee Benefit Claims

It’s High Time to Do-Away With the “Arbitrary and Capricious” Standard of Review for Employee Benefit Claims

The Employee Retirement Security Act (ERISA) has long-required that employee benefit plans (e.g., pension and welfare plans) provide “a full and fair review” of any decision denying a participant’s claim for benefits. ERISA §503, 29 U.S.C. §1133. Accordingly, most employee benefit plans provide procedures for submitting a claim for benefits to the plan administrator and for requesting a review of any denial of the claim. Often, the merits of a participant’s claim will turn on the interpretation of disputed plan…

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Growing Trend: Employers Are “De-Risking” Their Pension Plans Through the Purchase of Group Annuity Contracts

Growing Trend: Employers Are “De-Risking” Their Pension Plans Through the Purchase of Group Annuity Contracts

The past five years have seen a growing trend among sponsors of single-employer defined-benefit plans: They are “de-risking” their pension plans by transferring all or a portion of their pension obligations to a life insurance company through the purchase of a group annuity contract. Thereafter, the life insurance company is responsible for paying retirees’ pension benefits. The arrangement is appealing to plan sponsors because it enables them to reduce the risks of funding their pension obligations in a volatile asset…

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