Many people count on the retirement income received from their employers to meet their financial needs. They dedicated a large portion of their lives to helping the company make a profit. Now that they are retired, they expect the company to pay them the retirement income they earned. Unfortunately, some individuals have trouble receiving the retirement benefits they deserve. A Washington employee benefits claims attorney can review your employer retirement plan and help you appeal actions by the employer that violate the plan rules or federal laws that govern retirement plans.
Defined Contribution Plans vs. Defined Benefit Plans
It helps to understand the difference between the two types of employer retirement plans. A defined contribution plan is a plan in which you contribute pre-tax earnings to your individual account. Your employer may or may not contribute to the account, although many employers contribute a set amount or match employee contributions up to a certain amount.
The money you place in a defined contribution account belongs to you. Once you are fully vested, the money your employer contributes to the account belongs to you. Examples of defined contribution accounts include 401(k) accounts, 403(b) plans, profit-sharing plans, stock bonus plan, ESOPs, and SIMPLE plans.
On the other hand, a defined benefit plan promises to pay you a monthly benefit when you retire. The amount you receive may be stated in an exact dollar amount, or it may be calculated based on several factors, including your years of service with the company and your average annual salary. Employers fund these plans by making cash contributions to the pension fund. The terms of the agreement define the benefits an employee may be entitled to receive upon retirement. However, there are instances in which these plans may be modified or amended by the employer.
Changes to Retirement Income from Defined Benefit Plans
Pension plans and retirement plans are regulated by the Internal Revenue Code, ERISA (Employee Retirement Income Security Act), federal and state statutes. While an employer cannot reduce the benefits that you have already earned, employers can make changes to a retirement plan that impact your future benefits, including changes to a pension plan or defined benefit plan. Under certain circumstances, an employer can freeze, terminate, or substantially change a pension plan.
It is important that you act quickly if your retirement income decreases or you receive notice from your employer that your retirement benefits or the retirement plan are changing. You may have the right to appeal changes to your retirement income. However, you must follow the rules for pension appeals. Failing to follow the appeal process and failing to file timely appeals may result in the denial of your appeal.
Contact a Washington Employment Attorney for Help
You have the legal right to receive the retirement benefits earned under your employer’s pension plan. The regulations and laws governing retirement plans, including pension plans, are complex. Contact a Washington employment attorney today. Our Washington employment attorneys can review your retirement plan to determine if your employer is violating the terms and conditions of the plan or is violating federal or state laws governing retirement plans.