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 Retirement,
Benefits and Pensions
Under the ADEA,
employers may observe the terms of "bona fide employee
benefit plans" such as retirement,
pension, or
insurance plans that contain
age-based distinctions, but only if the distinctions are
cost-justified.
Such plans cannot be subterfuges or cause the rejection or
discharge of a person within the covered ages.
Employers must
pay the same amount for each benefit provided to an older
worker as is paid for a younger worker.
Pensions (ERISA)
The Employee Retirement Income Security Act of 1974, or
ERISA, protects the assets of millions of Americans so that
funds placed in retirement plans during their working lives
will be there when they retire. If an employer maintains a
pension plan, ERISA specifies when an employee must be
allowed to become a participant, how long they have to work
before they have a nonforfeitable interest in their pension,
how long a participant can be away from their job before it
might affect their benefit, and whether their spouse has a
right to part of their pension in the event of their death.
The law requires plans to pay retirement benefits no later
than the time a participant reaches normal retirement age.
But, many plans, including 401(k) plans, provide for earlier
payments under certain circumstances. For example, a plan's
rules may provide that participants in a 401(k) plan would
receive payment of his or her benefits after terminating
employment.
ERISA protects plans from mismanagement and misuse of assets
through its fiduciary provisions. ERISA defines a fiduciary
as anyone who exercises discretionary control or authority
over plan management or plan assets, anyone with
discretionary authority or responsibility for the
administration of a plan, or anyone who provides investment
advice to a plan for compensation or has any authority or
responsibility to do so. Plan fiduciaries include, for
example, plan trustees, plan administrators, and members of
a plan's investment committee.
 Generally,
if you are enrolled in a 401(k), profit sharing or other
type of defined contribution plan (a plan in which you have
an individual account), your plan may provide for a lump sum
distribution of your retirement money when you leave the
company.
However, if you are in a defined benefit plan (a plan in
which you receive a fixed, pre-established benefit) your
benefits begin at retirement age. These types of plans are
less likely to contain a provision that enables you to
withdraw money early. Whether you have a defined
contribution or a defined benefit plan, the form of your
pension distribution (lump sum, annuity, etc.) and the date
your pension money will be available to you depend upon the
provisions contained in your plan documents. Some plans do
not permit distribution until you reach a specified age.
Other plans do not permit distribution until you have been
separated from employment for a certain period of time. In
addition, some plans process distributions throughout the
year and others only process them once a year. You should
contact your pension plan administrator regarding the rules
that govern the distribution of your pension money.
ERISA requires that plans disclose when you begin to
participate in the plan, how your service and benefits are
calculated, when your benefit becomes vested, when you will
receive payment and in what form, and how to file a claim
for benefits.
ERISA
provides a private cause of action when an employer
disciplines, discharges, or otherwise discriminates against
an employee for the purpose of interfering with his or her
pension and benefits plans. It is not uncommon for victims
of age discrimination to claim that the employer chose to
discharge the them in part because only a short time
remained before the plaintiff would be fully vested in a
pension or other benefits. However, because age and years of
service are different, an employer can take account of one
while ignoring the other. A decision to take years of
service into account in decision making of the employer is
not necessarily discriminatory based on age.
ERISA also prohibits defined or targeted benefit pension
plans from excluding employees on the basis of age when they
start employment at an age five years or less before the
plan's normal retirement age.
Please do not hesitate to contact us to discuss these age
qualifications further. We can be reached toll free at (877)
876-5744 for a free consultation or by email at
help@FightAgeDiscrimination.com.
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