For many who have benefit plans through employers, the results of a recent study may bring shock and fear, especially for those who are nearing retirement. It seems that, in more than half of the cases, no one is minding the store. In other words, those whose duties are to oversee and protect retirement plans and investments covered by the Employee Retirement Income Security Act of 1974 (ERISA) do not know they are fiduciaries. Tennessee participants may want to examine their benefits to see who is monitoring their plans.
Many who retire with 401(k) plans or other Tennessee employer-established pension plans feel confident in the administration of those plans when they are under the protection of the Employee Retirement Income Security Act of 1974. This federal law, known as ERISA, requires employers who voluntarily offer retirement or health benefits to follow specific regulations regarding the fiduciary management of the plans. This is to ensure the participants' best interests are protected and there are no conflicts of interest that could jeopardize their potential profits.
Employers are not required by law to offer health insurance benefits to their employees unless they have 50 or more full-time workers. In fact, many small business owners who would like to provide this option to their staff find it cost prohibitive. A proposed changed to the Employee Retirement Income Security Act (ERISA) could change that.
For a number of years, consumers in Tennessee have watched as Sears and Kmart struggled to remain viable while major retailers closed all around them. Of particular concern to employees and former employees is that the Sears Holdings Corporation, the owner of the two department stores, seems to be taking some drastic steps to fulfill its obligations to retirees receiving pensions. Some of those actions remove the pensions from the protections of the Employee Retirements Income Security Act (ERISA).
For the past six years, participants in American Airlines' 401(k) plan have potentially lost about $88 million in returns they might have expected. This is the opinion of a U.S. District Court judge who rejected a settlement the airline proposed to bring to an end a dispute with those participants. American offered $8.8 million to settle the case in which the participants accuse the company of failing in the fiduciary duties outlined by the Employee Retirement Income Security Act. Those in Tennessee may know this better as ERISA.
Getting sick is one of the great fears of workers in Tennessee. Missing work means losing pay for many whose employers do not offer paid sick days. Because of this, employees may show up for work with fevers, coughs or stomach flus that they pass along to their colleagues. Many employers would like to offer paid sick leave, but if their companies cross state lines, the employers may be stymied by the lack of uniformity in state leave laws. Lawmakers are considering a plan to fix this, and it involves amending the Employee Retirement Income Security Act of 1974, otherwise known as the ERISA laws.
When companies offer their stock as benefits to their workers, the fiduciaries of those benefits typically fall under the eye of the Employee Retirement Income Security Act. ERISA regulations ensure that minimum standards are met when private companies provide such benefits. Tennessee business may not be required to provide those benefits, but if they do, they must follow the guidelines ERISA has established.
General Electric Corporation, one of the largest Fortune 500 companies in the world, is also one of the most profitable. The conglomerate employs hundreds of thousands in Tennessee and all 50 states, not to mention internationally. Some of those employees are not very happy with the way GE has handled their retirement fund investments. In fact, GE is facing a lawsuit claiming the company violated federal ERISA regulations.
Investors in retirement plans place a great deal of trust in those responsible for managing the plans. After all, reaching retirement age only to find the funds have been mismanaged allows few options for recovery. Recently, numerous prestigious colleges across the country, including in Tennessee, have come under fire for the way their retirement plans are being handled, and class action lawsuits are growing, claiming violations of ERISA laws.
It is no secret that retail stores in Tennessee and elsewhere are struggling to keep up with changes in consumer shopping habits. Brick-and-mortar stores that do not also have a strong e-commerce presence continue to fight through bankruptcies and lawsuits. Sears Holdings Corporation, for example, seems to be trying to hold on to solvency even as the value of company stocks declines. Because of these failing stocks, participants in the company's retirement plan recently filed a lawsuit claiming Sears fiduciaries violated their duties according the ERISA rules.