What recourse does a employee have if their retirement was under funded, and no one was informed.

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What recourse does a employee have if their retirement was under funded, and no one was informed.

Asked on June 24, 2009 under Employment Labor Law, North Carolina

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 14 years ago | Contributor

By "underfunded" do you mean that either (1) the employer did not contributions to the plan that they were legally obligated to, whether by an employment or union contract or some other written instrument, or (2) the employer took money from your account for retirement contributions (such as for a 401k), but did not actually make the contribution?

In either case--if there was an actual legal obligation--then you can sue the employer for not having met it. You can get the money that should have gone in, though in a down investment market, you may not be able to effectively get interest on that money (after all, if everything's suffered a loss, there's no gain to be had).

In case (2), the employer also committed a crime: theft, since they took your money. You can report them to the police.

Note that must be an actual obligation. If the employer made contributions to retirement plan completely voluntarily, as a "gift" to employees (akin to a holiday bonus, which is usually fully discretionary), there  would not be liabilty...but that's a rare case. Usually, if there is a retirement plan, there is something spelling out the obligation to contribute. As long as there was an obligation, you can sue.

B. B., Member, New Jersey Bar / FreeAdvice Contributing Attorney

Answered 14 years ago | Contributor

This isn't a simple question at all.  Employee retirement plans are regulated in a number of ways, but mostly by the federal Employee Retirement Income Security Act, "ERISA".  This is an extremely technical area of the law, and it's likely that a lot of factual information will be needed to determine what, if anything you can do about this.  You need to speak to an attorney who is familiar with ERISA, who can review all of the details of your case and give you reliable advice about what to do next.  One place to find a lawyer in your area is our website, http://attorneypages.com


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 AttorneyPages.com 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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