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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

TIAA ERISA LAWSUIT TARGETS SELF-DEALING IN LOAN ADMINISTRATION
TIAA ERISA LAWSUIT TARGETS SELF-DEALING IN LOAN ADMINISTRATION
March 16, 2020
New York, NY Retirement plan participants who are concerned that plan administrators and service providers may be running the plan for their own benefit can extract three important lessons from Haley v. Teachers Ins. & Annuity Assoc. of America. First, the possibility that plan fiduciaries and record keepers may be engaged in self-dealing is a very hot topic. These ERISA lawsuits may involve thousands of retirement plans and exponentially more retirement savers. That many plaintiffs can spell huge liability for those who manage a plan. Second, the success of these lawsuits depends on being granted class action status; and finally, the issue of who is a fiduciary and why it matters is often central when it comes to allegations of self-dealing READ MORE

Supreme Court Sends IBM Stock Drop ERISA Lawsuit Back to Second Circuit
Supreme Court Sends IBM Stock Drop ERISA Lawsuit Back to Second Circuit
February 11, 2020
Washington, DC On January 14, the Supreme Court sent Retirement Plans Committee of IBM v. Jander, a much-watched ERISA lawsuit, back to the Second Circuit for further consideration of defensive arguments raised by the plan administrators. The decision is a setback, although perhaps not a fatal one, for participants in employee stock ownership plans (ESOPs) who claim that they have been injured because of corporate financial fraud. These “stock drop” lawsuits are one of several different kinds of 401k fiduciary mismanagement lawsuits.
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Employees May Work 6 Years Longer when Employer Skims Fees off the Top of 401k Plan
Employees May Work 6 Years Longer when Employer Skims Fees off the Top of 401k Plan
January 22, 2020
Collingswood, NJ On November 5, former employee, Young Cho, filed a class action ERISA lawsuit (ERISA) in the District Court for the District of New Jersey alleging that fiduciaries of the Prudential Insurance Company 401k plan breached their duty to plan participants by selecting and managing investment options to benefit Prudential, rather than retirement savers.
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Can you tell me if Lockheed Electronics is part of the class action lawsuit?

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