For almost every individual, security in the future is a critical aspect of life. Employees often have this concern for their future and contribute into a retirement account or plan for the unknown with a long-term savings plan.
Knowing how to negotiate after being fired in a way that may save your goals and long-term hopes of future security regarding retirement is crucial in your fight for what you deserve. Here’s a section of my book “The Employee Rights Handbook” that deals with just that. Read now and get informed!
Retirement and Savings Plans
Understand if you are a participant in any retirement or savings plan and be aware of all plans, funds, and programs that may have been established on your behalf. You are not legally entitled to define benefit plan monies until you become vested. Once vested, your money becomes non-forfeitable. Each pension plan has rules to determine when vesting occurs. If you are fired just before the vesting of a pension (e.g., one month before your fifty-fifth birthday or the vesting date), argue that the timing of the firing is suspect and that public policy requires the employer to grant you your pension.
Although federal law states that employers generally do not have to change their pension rules to accommodate individual cases, the author has represented many employees who were terminated close to a vesting date and has negotiated for the employee to be placed on unpaid leave status or to receive a small monthly check for several months and stay on the payroll as a way of qualifying for the pension. This is called pension bridging and can be done in special circumstances.
If you are fired just before qualifying for a long-awaited pension and the employer refuses this request, consult an experienced employment attorney immediately. ERISA prohibits employers from terminating employees to avoid paying some or all pension benefits due the employee or that will become due the employee when he retires.
The fact that you are fired before receiving full pension benefits (because you did not reach the age of 65, work 20 or more years, or some other requirement) may not preclude you from receiving a monthly pension, albeit a smaller one. Where applicable, evaluate whether it pays for you not to start receiving your pension immediately after a termination, especially if the few additional years of postponement will mean more hefty vested monthly benefits later. Speak to your accountant or financial adviser for more details, and ask the employer if you can agree to defer your benefits for more money later.
In some states, if you begin receiving pension benefits, the amount of unemployment compensation you will receive weekly will be reduced accordingly. Always take this into account.
Some plans permit early retirement with a smaller monthly pension. If you are terminated, you may, depending on your age and length of service, still be eligible to receive reduced benefits. Be sure you understand your rights with respect to smaller vested benefits.
Negotiate to receive full enhanced pension benefits as consideration for accepting early retirement. If this cannot be done, think twice before accepting early retirement. Investigate the amount of pension reduction or penalty for early withdrawal. Inquire if the employer will augment additional employment served so you may qualify for an early pension.
Although your pension and other contributions from the employer may stop on termination, ask the employer to continue to contribute these benefits while you are receiving salary continuation. Getting the employer to agree to this can mean thousands of additional dollars to you.
Ask for a copy of pertinent plan summaries and statements of benefits when you learn of your firing. Carefully review these and other documents. Talk to a benefits officer or someone in the personnel department if you do not understand something. Do not rely on oral promises; ask for all explanations in writing. If there is any doubt concerning your rights, write to the plan administrator for a written explanation.
Demand in writing that the employer and/or plan administrator provide you with a copy of the employer’s pension and/or profit-sharing plans from the plan administrator if the employer refuses to furnish you with accurate details. A sample demand letter is contained following this paragraph. (You may have to pay for the cost of photocopying said plans when requesting them.) ERISA provides that plan participants are entitled to examine without charge all plan documents filed with the U.S. Department of Labor, including detailed annual reports and plan descriptions. If you request materials and do not receive them within 30 days, you may file suit in federal court. In such a case, the court may require the plan administrator to provide the materials and pay up to $100 a day until you receive the materials, unless the materials are not sent for reasons beyond the control of the administrator.
If you are satisfied that all monies due you have been accounted for, you will have to decide whether to keep the funds in their present accounts, withdraw the funds for your personal needs, or transfer the funds into other investments. The questions of where to put the money and whether you will suffer harmful tax consequences should be answered by a competent accountant and/or financial adviser. Some company plans allow participants to roll benefits over so you do not get hit with hefty early withdrawal penalties. I strongly recommend that my clients seek professional tax and financial advice when retirement and savings plan monies are involved at the time of a termination. It is also a good idea to speak with the person in charge of the company’s benefits or investments before making an informed decision in this area.
For a full depth analysis on this topic and many more, visit http://legalstrategiespublishing.com/ to purchase “The Employee Rights Handbook” today!
