ERISA: Employee Retirement Income Security Act Lawyers
On December 9,1963, company president Sherwood Egbert announced the closure of the Studebaker plant in South Bend, Indiana. The pensions of nearly 11,000 current and former workers would be affected by this closure, many of them losing their entire pension.
The average age of a Studebaker employee was 54 years old, but only those already retired or 60 and over received their pensions at 100%. Approximately 4000 workers with 10 or more years of service—a few had as many as 40 years of service—received a lump sum payment amounting to a mere 15% of the value of their pension. Nearly 3000 employees received nothing at all.
While pension reform had been of interest to several union and political leaders, the shutdown of the Studebaker plant served as a catalyst for the development of the Employee Retirement Income Security Act.
The establishment of ERISA in 1974 did not require pensions or health plans to be provided by an employer but regulated these benefits to ensure appropriate funding, management, and transparency. Additionally, it provides access to the Federal Court system to pursue legal remedies.
Important amendments to ERISA include:
- Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA),
- Health Insurance Portability and Accountability Act of 1996 (HIPAA),
- Newborns’ and Mothers’ Health Protection Act,
- Mental Health Parity Act, and
- Women’s Health and Cancer Rights Act.
One growing area of litigation in this area are suits brought by employees because of allegedly excessive fees for their 401(k) plans. According to Department of Labor estimates, each additional 1% in fees reduces retirement assets by 28% over 25 years.
The typical fee for plans with assets of less than $10 million is 1.45%. However, the average fee for the 30 largest plans is just .29%. If you feel that the fees you are being charged for your 401(k) plan are too high, contact us. We may be able to help.
Pension and benefits issues are complicated. Our ERISA attorneys have the experience and knowledge to handle large, class actions against corporations and insurers who violate their fiduciary duty to their employees or benefactors. Contact us today.