Pensioners Fighting for ERISA Rights

Sacramento, CAWith so many people living longer into retirement, companies are forced to pay more in benefits for their former employees. The Employee Retirement Income Security Act (ERISA) was created to protect those benefits, including employee stock options and pension plans. However, some people believe that because they are living longer than their employers expected them to, those employers are refusing to pay the benefits properly.

One such woman is Pauline Keehn, who spoke with CBS 13 about her battle against AT&T. Pauline says that her husband's retirement money was supposed to go to her if he died before she did. Unfortunately, he died a year ago—but the pension stopped coming when he passed away. For the past year, Pauline has had to make do without money she thought she could count on.

Pauline says that Bill worked 30 years for his pension and wanted her to have survivor benefits. But AT&T says that they have no evidence Bill signed the proper papers for that. Of course, the papers were signed 35 years ago—who knows where those papers are now. According to the US Department of Labor, employers only have to keep benefit records for 7 years. That means it's up to employees to hold onto their records and keep them in a safe place.

The kicker is that AT&T's chairman, who is recently retired, is reported to have received a $158 million dollar pension package.

Some people are now expressing concern that, because former employees are living longer into retirement, companies are looking for ways to avoid paying pension benefits to employees and their spouses.

Meanwhile, a lawsuit filed against Schering-Plough regarding employee company stock investments has been given the go-ahead to move forward as a class action lawsuit. The judge found that the plaintiffs can move forward based on 3 allegations that were filed under ERISA laws. Those allegations include that Schering-Plough failed "to prudently and loyally manage the plan's investment in Schering-Plough stock," and failed to ensure that the plan's investment committee had appropriate information regarding the company.

Naturally, many people who have company stock options count on those options and other benefits to be available for them upon retirement. They expect that their plan's advisors will make the appropriate investment decisions for the employees and will act in a prudent and loyal way. Employees expect that their fiduciaries will act in the employees' best interests.

They are shocked to learn that after years of hard work and loyalty to a company, they or their beneficiaries might not receive the benefits they signed up for and sometimes paid into. Or, they discover that money they thought they had for retirement is no longer available for them because of inappropriate actions on the part of their plan fiduciaries. The sad thing is that by the time they realize something is wrong, a lot of the money is gone.

Luckily, they can file lawsuits under ERISA laws, but employees already have to fight for enough. They shouldn't have to fight for their money, too.