Terminated Employee and Retiree Rights Under ERISA: Reducing Benefits, Partial Plan Termination, Severance Packages

Description

Employers--specifically those within the private sector--offering retirement and health benefits have the right to reduce or terminate such benefits absent an agreement to the contrary. ERISA protects terminated employees and retirees by governing how plan sponsors administer benefit plans with substantial consequences when such rules are violated.

To reduce costs, employers may seek to reduce or terminate the benefits of retirement or welfare plans. This causes a variety of issues for eligible and vested employees or retirees, and plan sponsors must comply with strict requirements under federal and sometimes state law. Potential litigation can arise focused on whether an employer has the right to terminate or reduce benefits unilaterally or whether the rights have vested.

ERISA counsel and plan sponsors must implement strategic plans to manage retirement or welfare plan challenges with terminated employees and retirees. Counsel and advisers must have a complete understanding of the rules and implications of partial plan terminations and severance payments under ERISA. Plan provisions set forth notice and other requirements to follow when reducing or modifying benefits, and failure to adhere strictly can result in suits for breaching obligations to the plan and its participants.

Listen as our panel discusses critical considerations regarding the rights of terminated employees and retirees under ERISA and analyzes legal issues of partial or full termination of retirement and welfare plans. The panel will review the potential pitfalls of severance packages and offer practical techniques to ensure legal and regulatory compliance with retirees and terminated employees.