401(k) Plans & ESOPs
Holding employers accountable for mismanagement of investment funds
401(k) Plans and Employee Stock Ownership Plans (ESOPs) are the most popular ways to fund retirement. 401(k) Plans often require employees to contribute and some companies match a certain percentage of what a worker contributes. Other employers offer ESOPs—stock in their own company—or hybrid plans such as “cash balance” plans, which are both high risk, to fund retirement.
When a company provides employees with investment funds to finance their retirements, they are legally required to responsibly manage those funds. When employers freeze, cut, or eliminate traditional, more secure retirement benefits, federal law states that they must appoint a financial supervisor to oversee these plans. That person (a fiduciary) is responsible to make sure that decisions are made for the benefit of plan participants—and not the employer—and must choose investments carefully.
Companies that create ESOPs also have a legal obligation to properly manage these stock ownership plans. Our lawyers have represented individuals and groups of employees who invested in ESOPs that were mismanaged, and those companies did not inform its employees of the investment risk.
If you think your employer may have pursued profit over your retirement plan benefits or has been dishonest about the benefits you could receive from buying into company stock, our attorneys can help. They have decades of experience in this area of the law.
Joel Hurt has recovered losses for participants in 401(k) Plans and Employee Stock Ownership Plans (ESOPs) due to unwise investments or incorrect management. If you have concerns about your retirement plan account management, contact Joel today.