What to Do If Your Employer Changes Your Retirement Plan Terms
Employer-sponsored retirement plans form the backbone of many long-term financial plans, and changes in retirement plan terms can significantly impact an employee’s future. Employers cannot make just any change to retirement plans.
For modifications to be legally valid, your employer must comply with certain federal laws and follow procedures, ensuring you know about the changes and your rights to respond to them. Failing to meet those requirements can open the door to recovering funds lost to improper changes.
At Peace Law Firm, we guide clients through understanding and responding to employer-sponsored retirement plan changes. We can help you collect the benefits you have earned, even if an employer or administrator tries to deny them to you.
If your employer has altered your retirement plan terms in a way that negatively affects your financial security, our firm is here to help you understand your rights and how you can respond. Contact us for a consultation.
Understanding Your Rights
Employer-sponsored retirement plans come in several forms, including:
- Defined benefit plans, which provide a specific, guaranteed payout upon retirement;
- Defined contribution plans, which involve employee contribution, possible employer matching, and retirement income tied to investment performance; and
- Other employer-sponsored plans, such as hybrid and profit-sharing, combine elements of both structures or distribute benefits based on company performance.
Employee rights vary depending on the type of plan.
Rights Across Plans
Regardless of plan type, all employees enrolled in employer-sponsored retirement plans have the following rights:
- Right to disclosure. Employees must receive clear and timely information about plan terms, investment options, fees, and any changes made to the plan.
- Right to fairness. Employers cannot discriminate when offering retirement benefits and must apply plan changes fairly.
- Right to access funds. Employees have legal pathways to access their retirement funds.
- Right to fiduciary responsibility. Plan administrators and employers must act in the best interest of employees when managing retirement funds.
These protections ensure employees can make informed decisions and identify violations of their rights.
Defined Benefit Plans
Employees enrolled in defined benefit plans have rights to:
- Receive vested benefits, even if the plan is later modified or terminated;
- Be informed of changes that may affect benefit accrual; and
- Access plan documents explaining the benefits structure and funding.
Generally, enrollees have the right to receive the benefits the employer promises on the terms required by federal law.
Defined Contribution Plans
Employees enrolled in defined contribution plans have rights to:
- Make contributions according to plan terms;
- Benefit from employer matches included in plan terms;
- Receive disclosures about investment options and risks;
- Withdraw funds under applicable hardship, loan, or retirement rules; and
- Be protected from employer mismanagement of plan funds.
You have the right to have the employer correct common defined contribution errors, too.
Other Employer-Sponsored Plans
Employees enrolled in hybrid and profit-sharing plans have rights to a clearly defined method for determining contributions or payouts and transparency about contribution calculation methods. Other employee rights depend on how the plan operates, particularly the plan’s similarity to defined benefit and contribution plans.
Responding to Changes in Retirement Plan Terms
Depending on the circumstances, you may have the right to respond to and correct unwelcome changes in retirement plan terms. You generally need to follow the below process to ensure you protect and maintain your rights in response to unwelcome alternations:
- Review the summary plan description (SPD), a document that outlines plan terms and must include details about how modifications work;
- Request additional information from your employer, which must provide a written explanation of changes upon request;
- Verify compliance with the Employee Retirement Income Security Act (ERISA), which establishes minimum standards for retirement plans and procedures for employees to challenge unfair changes;
- File a complaint with the plan administrator;
- Bring a claim with the U.S. Department of Labor (DOL), which investigates ERISA violations and helps enforce employee rights; and
- Sue your employer or plan administrator.
Not all retirement plan changes are illegal—some may be unfair but still comply with federal regulations, while others could constitute violations. An attorney can help you determine whether your employer’s actions are lawful and advise you on your options.
Protect Your Retirement Security with Peace Law Firm
If your employer has changed your retirement plan terms to a negative effect, Peace Law Firm is here to help. Our firm works to ensure employees receive the retirement benefits they have earned. We offer experienced, knowledgeable ERISA representation to challenge unlawful plan modifications.
Reach out to Peace Law Firm today for a free consultation to learn more about your options and what to do after your employer makes unwelcome retirement plan changes.
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