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Tag: Pension

Department of Labor Stepping Up Audits of Pension Plans

Department of Labor Stepping Up Audits of Pension Plans

In 2016, the Department of Labor (DOL) announced that it was stepping up efforts to ensure that terminated vested participants receive the pension benefits they are due under the terms of their plan. The DOL’s primary targets? Large Fortune 500 defined benefit pension plans whose Form 5500 filings show high numbers of participants eligible for benefits, but not receiving them. The impetus for this increased enforcement was that audits revealed that many plans had inadequate procedures for locating participants or…

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Court of Appeals Hands Victory to Plaintiffs in Lawsuit Alleging Detroit Edison Company Misled Them Into Transferring to Volatile Cash Balance Plan

Court of Appeals Hands Victory to Plaintiffs in Lawsuit Alleging Detroit Edison Company Misled Them Into Transferring to Volatile Cash Balance Plan

On March 23, 2021, the Sixth Circuit Court of Appeals issued a major victory to pension plaintiff Leslie Nolan in her putative class action against The Detroit Edison Company (DTE), ruling that she plausibly alleged in her complaint that DTE misled her and other employees into transferring out of its “traditional” pension plan (TP) and into a new cash balance pension plan (CBP) without disclosing, among other things, that if interest rates fell there was a risk they would earn…

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Just How Accurate Is Your Social Security Benefit Estimate?

Just How Accurate Is Your Social Security Benefit Estimate?

Each year the Social Security Administration (SSA) mails about 15 million benefit estimate Statements to persons age 60 or older who are not receiving Social Security benefits and do not have an online Social Security account. The Statement is also available online to individuals age 18 or older. Among other things, the Statement provides workers with their earnings record and a personalized estimate of their future Social Security retirement benefits. But just how accurate are those benefit estimates? A recent…

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Million Dollar Pension Dispute Highlights Importance of Designating a Beneficiary

Million Dollar Pension Dispute Highlights Importance of Designating a Beneficiary

When a vested pension plan participant dies without having named a beneficiary, there is bound to be litigation as to who is entitled to the participant’s pension benefits. Kinder Morgan, Inc. v Crout, No. 19-20037 (5th Cir. May 18, 2020) is just such a case. In Kinder, Danny Lee Crout was an employee of Kinder Morgan Inc. and participated in its retirement Savings Plan until his death in 2016. As of his passing, Danny’s account balance under the Plan totaled…

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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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Commit a Crime? Risk Having Your Retirement Account Garnished

Commit a Crime? Risk Having Your Retirement Account Garnished

If you are in a private-sector pension plan covered by the Employee Retirement Income Security Act (ERISA), you may have been told that your pension benefits cannot be “alienated.” That is, creditors cannot touch your employer-provided pension or retirement funds while those funds are in the plan. However, ERISA’s anti-alienation rule only goes so far, as one criminal recently learned. United States v. Frank, No. 1:17-cr-114 (E.D. Va. May 6, 2020). In 2017, Lawrence Frank pled guilty to one count…

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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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Decreasing Fertility and Increasing Life Expectancy Threaten the Solvency of Our Nation’s Social Security Retirement Program

Decreasing Fertility and Increasing Life Expectancy Threaten the Solvency of Our Nation’s Social Security Retirement Program

On November 4, 2019, the Social Security Administration issued a report addressing the funded status of the Social Security retirement program. “Social Security: Demographic Trends and the Funding Shortfall” (Report). The Report’s findings and conclusions should be of great concern to anyone who is, or may be, dependent on Social Security benefits for a comfortable retirement. The Social Security program pays benefits to retired or disabled workers and their families and to family members of deceased workers. It was set…

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