Legal Question in Business Law in California
Employee rights to Pension Plan upon terminastion
Can my former employer, after waiting 8 months, pay my pension plan in 2 payments, there by preventing a complete roll over? Employer states that I owe them money. However, this was waived at time of termination in exchange for a ''confidientiality agreement'' and no vacation pay due was paid at time of termination.
1 Answer from Attorneys
Re: Employee rights to Pension Plan upon terminastion
First, many pension plans use trustees or independent managers to take this kind of decision out of the hands of management. Therefore, as a first step, you might want to read the plan documents carefully to verify that you are dealing with the right party.
Next, I have no way to tell from the facts given whether the possibility that you owe the former employer some money is, or is not, a valid reason to withhold, or pay in instalments, the cash-out value of your pension plan.
Finally, except for the portability guarantees and other limitations under ERISA, private pension plans are largely governed by traditional contract law principles, and the employer and employees are to some extent free to agree to whatever rules they can negotiate. Therefore, with a few exceptions set by statute and public policy, your rights are governed by what you signed, and it would have to be reviewed (by you, or better, your lawyer) to determine your rights to a prompt lump-sum payout.
Finally, parties holding pension funds would in almost all cases be considered fiduciaries of the plan beneficiaries (employees) and as such they owe a duty of utmost fidelity and good faith in all dealings with you. If you don't get a prompt and full settlement, or a satisfactory explanation of why not, and if the amount in question warrants, you should see an attorney who can write demand letters on your behalf after review of your claims.
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