ERISA, Pension Funds & 401(k) s: The Difference Between Misleading & Outright Lying

Get Legal Help Today

 Secured with SHA-256 Encryption

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

Full Bio →

Written by

UPDATED: Jul 16, 2021

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.

What’s the difference between a company misleading people vs. outright lying about pension funds and 401(k) s? According to legal experts, the difference can be negligible and can often lead to lawsuits.

When must you be notified about changes?

The most common situation in a company acting as a plan fiduciary is failing to tell people about important changes to the plan, according to Ron Dean, a California attorney who has been practicing ERISA (Employee Retirement Income Security Act) law for over 35 years. He explained:

In some cases, the law doesn’t require notice for some 20 months, but good employers will tell employees right away. Other times, the plan will provide a “benefit statement” showing you how much you’ll get and through some error it’s just plain wrong. The law says that in most cases you won’t get the amount in the benefit statement no matter how much you’ve relied on it. There’s no motivation for the plan to get it right the first time. As to outright lying, sometimes (not often) we’ll see cooked books, phantom funds and just plain fraud. That’s a good time to get the Department of Labor involved. They don’t take kindly to those kinds of things.

ERISA lawsuits

We asked Dean when someone would have a lawsuit against a company for mishandling pension funds/401(k) s. Without hesitating, he told us, as soon as you learn about it. He explained whether it’s better to file an individual or class action lawsuit and how each of those works:

As a practical matter, most of those cases must be filed as class actions, because the claim is on behalf of all of the plan participants. If the mishandling only affected your account, and no one else’s, then you sue as an individual. So if you told the investment company to move your money from Fund A to Fund B and they don’t do it, you would sue as an individual. However, if the investment company was charging too much in fees for transferring, that would be a class action.

If you’ve been denied valid benefits under ERISA, consult with an experienced ERISA attorney to discuss your situation and evaluate your options. Consultations are free, without obligation and strictly confidential.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption