subject: Employee Retirement Plans And Related Questions [print this page] Everyone will need a good and reliable retirement plan after retirement. These plans may either be started by the employer, an insurance company, trade unions, the government or other institutions. It is an agreement according to which employees will receive a certain amount either at regular intervals or at once on retirement. Answered below are some of the most commonly asked questions about employee retirement plans:
According to ERISA, will federally qualified retirement plans be protected from any kind of monitory damages in a civil lawsuit in the state of Texas?
As per the laws of Texas, any federally qualified retirement plan may be protected from monitory damages.
Is it possible to stop lump sum payments in a retirement plan?
Most retirement plans are protected by the Pension Protection Act. If the plans funded status is below 80%, then the lump sum payments may or may not happen. If the fund status falls to below 60%, the payments may not happen at all.
Will an employee have to authorize distributions to a 403 b? What laws govern this distribution?
Retirement plans are like fringe benefits that are given to the employees. The employers will have to choose a plan and plan the distribution accordingly. One may find more information about this in the Summary Plan Description. Hence, the employee may not be required to give his/her consent or authorization for the distribution.
Is it possible for an employee to oppose his/her retirement plan on the basis of poor fund value and mismanagement?
There may be many factors on the basis of which each plan functions. According to ERISA, it is the plan administrators who will be able to decide about the investments. Unless the employee is able to prove that there was fraud or malpractice, he/she may have to accept the decisions that are taken on his/her behalf.
Will a retired employee who is also a member of the union lose the benefits if he/she works somewhere else in the same capacity?
Most unions may have severe rules regarding retirement plans and the employees working elsewhere post retirement. The main intention is to protect the other union members. In some cases, the person may lose his/her retirement benefits if he/she starts working elsewhere.
Is it possible for a person who receives monthly pension payments to request for a payment of a lump sum amount?
Generally, payments are made in lump sum only to people who may be suffering from financial hardships. The pension plan administrator may look into the request and take a decision based on the persons circumstances. If the request is made due to financial hardships, it may be granted.
Will a severance agreement that is offered to a person affect the retirement plan?
A persons retirement plan may not be affected by the severance agreement offered to him/her.
How different are 401Ks and pension plan?
There are mainly 3 differences between 401Ks and pension plans. The employee will make a majority of the contributions to a 401 K plan while the employer will completely fund the pension plan. The investments in a 401K plan are managed by the employee while investments in a pension plan are managed by an investment manager. The third difference is that the person may get only what has been deposited by him/her at regular intervals and the amount of interest on that contributions in a 401K plan whereas, the individual will be paid at regular intervals for the rest of his/her life after retirement in a pension plan.
A person is usually worried about how he/she may earn a regular income post retirement. It will be helpful if you contribute to a good retirement plan. You may ask an employment lawyer if you have any questions about retirement plans.
