Fewer Tennessee employees remain at one job for a lifetime as in generations past, so having a growing retirement plan is a good incentive to remain faithful to one company. However, devoting years to a company only to find one’s retirement plan has been mismanaged can be a devastating blow. Understanding the Employee Retirement Income Security Act, also known as ERISA, is a good way to know whether one’s plan is safe from unethical or incompetent management.
Not every employer is required by law to provide a retirement plan for his or her workers. Some may offer such a plan to entice quality employees or to retain workers they have trained and groomed. Although no law requires this incentive, once a company decides to offer it, the company must follow the rules of ERISA. ERISA covers all plans that are established by private companies, not those that are affiliated with governments, religious institutions or other nonprofit entities.
While the laws are complex, they essentially require an employer to give the employees a summary of how the plan will work and inform the participants whenever there will be a major change in the funding or management of the plan. Employers should also provide participants with an annual report and ensure that participants understand the process for filing formal complaints about the management of the plan. An employer who fails to do these, or a fiduciary who does not invest the participants’ funds prudently may be in violation of federal law.
Those in Tennessee who place their trust in an employer-provided retirement fund have a lot at stake. When something goes wrong with their plan, it will likely happen at the worst possible moment when there is little time to begin rebuilding a retirement nest egg. When this happens, employees may seek the assistance of an experienced ERISA attorney to help them recoup their losses.