Many people in Houston who have 401(k) retirement plans or pension plans with their employer are aware that there are federal laws governing the employer and the bank's administration of these accounts. The Employment Retirement Income Security Act governs many employer-provided benefits, and while it is very complicated, it generally requires employers and third party administrators to act in the best interests of employees.
When an employer or administrator violates ERISA rules, that party might be held liable for any losses that employees incur as a result. An example of this recently took place. Earlier this week, the U.S. Department of Labor announced that it has reached a settlement agreement with ING Life Insurance and Annuity Co. regarding a failure to disclose one of its policies.
ING reportedly kept investment gains that took place when the company did not process transactions on time. It failed to disclose this practice, which violated ERISA.
The $5.2 million settlement represents some of the gains ING made by failing to process transactions on time, and it also encompasses more than $500,000 in civil penalties. In addition to the settlement, the company will now be forthcoming regarding its transactions policy with ERISA-plan clients.
Existing clients will also have a chance to object to this policy, should they so choose.
The funds from the settlement will reportedly go into 1,400 retirement plans that were directly impacted by this policy.
This settlement illustrates just one ERISA issue. ERISA is very complex. Anyone who feels they are being wrongly denied employment benefits, or that an employer or third party is not acting in the interests of employees when it comes to retirement plan administration, may be wise to seek legal counsel to learn whether any ERISA violations exist.
Source: Bloomberg BNA, "ING to Pay $5 Million to Settle Allegations of ERISA Disclosure Violations," Feb. 5, 2013
- Our Houston employment law firm handles cases like the one discussed here. To learn more about ERISA, please visit our Employment Retirement Income Security Act page.