401(k) and Pension Benefits
Employers often reduce or eliminate traditional pension benefits for their employees. Instead of offering 401(k) plans, some employer offer Employee Stock Ownership Plans (ESOPs), and hybrid plans such as “cash balance” plans, which are high risk.
When employers freeze, cut, or eliminate traditional, more secure pension benefits, federal law states that they must appoint a fiduciary (or financial supervisor) to oversee all pension plans, including 401(k) plans and ESOPs.
The fiduciary must make sure that decisions are made for the benefit of plan participants (and not the employer) and must choose investments carefully. When a plan fiduciary does not do its duty properly, employees suffer dramatic losses to their retirement savings and pension plans. This often happens when the fiduciary makes investments in the employer’s stock.
If you are an attorney, consider partnering with FDPK. We represent referred matters as we do our own clients. We understand that referred clients have a history of a positive working relationship with their attorney. FDPK can take the lead or act simply as local counsel, according to your preference.
Years before the Enron and Worldcom scandals were exposed, FDPK Partner Joel Hurt and Of Counsel Ellen Doyle filed lawsuits to recover losses to participants in 401(k) plans and ESOPs due to unwise investments in employer stock. Contact us if you have questions regarding your pension, 401(k) or ESOP.