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Employee Retirement Income Security Act


The Employee Retirement Income Security Act of 1974 (ERISA) was designed to protect employees from private employers who might mismanage employee benefits plans. Among the items covered in ERISA laws are health benefits, pension plans, and employee stock ownership plans. In cases where ERISA protections are violated, employees can file a lawsuit to hold those responsible accountable for their actions and receive compensation for their losses.

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ERISA Laws

ERISA laws are federally enacted laws that set out the requirements for private employers who offer benefits to their employees. Such benefits frequently include health plans, pension plans, or employee stock ownership plans. Just because an employer offers these plans, however, does not mean the employer is free to run the plans how he or she sees fit.

Under ERISA laws, the fiduciaries responsible for overseeing benefits plans must act in the best interests of the plan, must provide plan participants with complete information about the plan—including how the plan operates, how benefits are calculated, and how benefits are paid—and must provide a process through which employees can appeal or grieve denials of their applications for benefits.

Among those who may be considered plan fiduciaries are trustees, administrators, employers, and anyone who sits on the investment committee. In addition to running the plan in the best interests of participants and beneficiaries, fiduciaries must avoid conflicts of interest when they run the plan.

Before employees are eligible to file a lawsuit under ERISA, they must exhaust the appeals process and must meet strict ERISA filing deadlines.
 

Health Benefit Plans

Group health benefits plans are frequently offered by employers as a benefit for employees. The plans ensure participants and their dependents have access to medical care either by providing that care directly, by providing insurance coverage for medical care, by reimbursing participants for expenses, or through other means.

If a group health insurance benefits plan has been mismanaged, employees may be able to file a lawsuit against the plan fiduciary, to ensure they have access to the medical care, insurance, or funding as set out in the plan agreement.

Meanwhile, if access to insurance benefits have been unreasonably denied by an insurance company, plan participants may be eligible to file a lawsuit under ERISA to have their insurance denial reversed. Before they can do so, however, they must first follow the insurance company's appeals process.
 

Pension Plans

ERISA also sets out guidelines for managing retirement plans—including defined benefits plans, defined contribution plans, simplified employee retirement plans, and 401(k) plans. Employers must manage the plan in the manner agreed upon in the plan agreement or summary plan description and must provide certain advance notice to employees.

If fiduciaries mismanage funds or otherwise acted improperly in carrying out their duties, they may be held personally liable for any losses experienced by the plan as a result of their actions. This might include reimbursing missing contributions, including lost earnings or interest.
 

Employee Stock Ownership Plans (ESOP)

Employee Stock Ownership Plans (ESOP) are employee benefit plans in which assets are mainly invested in the employer's stock, giving employees an ownership interest in their employer. Employers are required to provide a summary plan description that explains the rules for how the ESOP is managed, when they can access benefits, and how they can appeal ESOP operations. Fiduciaries can get into trouble, however, if a plan's assets remain invested in the company when it is no longer prudent to do so, or if the fees associated with the plan's investment are higher than they should reasonably be.
 

ERISA Lawsuits

There are situations in which employees can file ERISA lawsuits against a plan or its fiduciaries:
  • To appeal a claim for benefits that was denied
  • To recover missing benefits
  • To prevent a plan from being managed in a way that violates ERISA laws
  • To stop fiduciaries from mismanaging plans

In cases where ERISA plans have been mismanaged, legitimate claims for benefits have been denied, or plan administrators have breached their fiduciary duties, plan participants and their beneficiaries may be eligible to file an ERISA lawsuit.
 

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ERISA VIOLATION LAWSUITS


ERISA VIOLATION LEGAL ARTICLES AND INTERVIEWS

Goldman Sachs 401k Plan Participants file ERISA Lawsuit over Self-Dealing
Goldman Sachs 401k Plan Participants file ERISA Lawsuit over Self-Dealing
November 21, 2019
New York, NY A class action ERISA lawsuit filed on October 25 in the Southern District of New York claims that Goldman Sachs Inc. and related defendants failed to administer the Goldman Sachs Group Inc. 401k plan prudently and in the best interest of participants. Instead, Falberg v. Goldman Sachs Group Inc. alleges that Goldman managed the plan to benefit the company at the expense of participants. Plan fiduciaries did this by keeping many underperforming proprietary mutual funds in the investment lineup.
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Intel Corp. Investment Policy Committee v. Sulyma to shape ERISA fiduciary lawsuits
Intel Corp. Investment Policy Committee v. Sulyma to shape ERISA fiduciary lawsuits
November 7, 2019
Washington, DCOn December 4, the US Supreme Court will hear arguments in an ERISA lawsuit that may have lasting implications for the ability of plan participants to sue over mismanagement of retirement funds. As Christopher Sulyma argues in his Supreme Court brief, ERISA plan participants should not be assumed to know about (and perhaps have consented to) suspect  financial decisions disclosed in a “Russian nesting doll” style series of linked online documents.
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Did the Ninth Circuit Gut ERISA Enforcement in Schwab 401k Mismanagement Lawsuit?
Did the Ninth Circuit Gut ERISA Enforcement in Schwab 401k Mismanagement Lawsuit?
October 21, 2019
San Francisco, CA In August, the Ninth Circuit ruled that Charles Schwab Corp. could force plan participants to individually arbitrate their claims that fiduciaries of the Schwab Retirement Savings and Investment Plan (Plan) had mismanaged plan assets. The ERISA lawsuit decision sent shock waves through the Ninth Circuit as it appears to reverse nearly 35 years of judicial precedent about forced arbitration of ERISA claims.
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