Did You Know?
Under the federal Employee Retirement Income Security Act of 1974 (ERISA) recognizes that pension and 401k plan trustees owe fiduciary duties to the participants and beneficiaries in these plans.
Has the pension plan you provide for your employees been tanked? Has the money you thought was put aside for retirement suddenly disappeared? Pension Plan Fraud has become a regular topic in the news media lately. If you suspect that your financial advisor or broker, or someone you trusted with your hard-earned money may be to blame for the losses to your pension plan you should consult with Securities Fraud attorney to help you sort out the details of your tanked pension plan.
Most Employers Are Fiduciary
Most employers are fiduciaries with respect to pension plans that they have established or maintain. A fiduciary is a person or entity with special obligations arising from the relationship of trust between the fiduciary and the beneficiary. The fiduciary holds rights that would normally belong to another person, and is therefore held to a high standard of care in the exercise of those rights.
Providing misleading or incomplete information violates this obligation. As part of the employer's duty to inform, every plan participant has the following rights:
- The right to obtain a copy of the plan document from the plan administrator.
- The right to receive a summary plan description (SPD) upon joining the plan and at specified intervals thereafter. The SPD is a description of the plan's terms that is (or should be) in language that is understandable.
- The right to obtain a copy of the plan's most recent annual statement (Form 5500).
A pension plan is governed by ERISA if it is a plan, fund, or program established or maintained by an employer (or an employee organization, or both) that, either explicitly or because of surrounding circumstances, (1) provides retirement income to employees or (2) results in a deferral of income by employees until after termination of covered employment or beyond.
You must request these documents from the plan administrator in writing, and the plan administrator has 30 days from the receipt of your request to respond. If the administrator fails to give you information you are entitled to within 30 days of your written request, and the reasons for the delay are within the administrator's control, you also have the right to bring a lawsuit against the plan administrator, and ask the court to make the plan administrator pay you a fine of up to $100 a day for every day the administrator goes over the 30-day deadline.
Who Governs Pension Plan Fraud?
Three federal government agencies have authority to investigate possible violations of the rules for private pension plans and to bring lawsuits or assess penalties against individuals engaged in illegal actions: the Department of Labor, the Internal Revenue Service and the Justice Department.
Department of Labor.
If you think the plan trustees or others responsible for investing your pension money have been violating the rules, you should call or write the nearest field office of the U.S. Department of Labor's Pension and Welfare Benefits Administration (PWBA). The Labor Department has authority to investigate complaints of fund mismanagement. If an investigation reveals wrongdoing, the Department can take action to correct the violation, including asking a court to compel plan trustees and others to put money back in the plan. Courts can also impose penalties of up to 20 percent of the recovered amount and bar individuals from serving as trustees and plan money managers.
Internal Revenue Service.
If you suspect that individuals providing services to the plans have gotten loans or otherwise taken advantage of their relationship to the plan, the Employee Plans Division of the Internal Revenue Service may want to take a closer look. The Internal Revenue Service is authorized to impose tax penalties on people involved in unlawful "party in interest" transactions.
Department of Justice.
Cases of embezzlement or stealing of pension money, kickbacks or extortion should be referred to the Federal Bureau of Investigation or the Labor Department field office in your area. If illegal activities are found, the case can be referred to the U.S. Department of Justice for prosecution. Criminal penalties can include fines and prison sentences, or both. Federal pension law makes it unlawful for employers to fire or otherwise retaliate against employees who provide the government with information about their pension funds' investment practices.
The right to sue must be exercised within six years of the employer's breach, or within three years of the employee's actual knowledge of the breach. A breach can involve an overt act by an Employer, or an omission - that is, a failure to act when action was required.
CONTACT A SECURITIES FRAUD ATTORNEY IN YOUR AREA
If you believe that you have suffered a loss because your employer breached its obligations with respect to a pension plan of which you are a participant or a beneficiary, you should contact an attorney as soon as possible. An attorney can help ensure that you are aware of the available legal remedies and applicable deadlines, and that you act in a timely fashion to preserve your rights.
If you are in need of legal advice or services, or simply wish to speak to an attorney who has successfully handled Securities Fraud Litigation in your state, you may use our Free Online Consultation Form.
There is NO COST or obligation for this service.
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