Can an employer legally change from Direct Benefit to Direct Contribution plan?

UPDATED: Oct 1, 2022

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Can an employer legally change from Direct Benefit to Direct Contribution plan?

Can an employer legally change from Direct Benefit to Direct Contribution
plan? Majority stake was just sold to another company that is now changing
our Direct Benefit plan to Direct Contribution. Is that legal? Do we have any
rights in regards to keeping the Direct Benefit plan in NY state? Thank you.

Asked on September 28, 2017 under Employment Labor Law, New York


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

No, you do not have have any right to keep the direct benefit plan. Employers have the right to determine what kind of plan or benefits they will provide in this regard, and may change them at will, subject only to contractual limitations (e.g. if there is an personal employment contract for one or more employees, or a union contract, requiring the direct benefit plan).
Remember: there is no legal obligation for the employer to provide *any* such plan at all: going forward, they could have opted to not have either a direct benefit or direct contribution plan.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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