Question about ERISA Laws

ERISA is a federal law that regulates pension plan policies and requires plans to regularly provide participants with information regarding minimum standards for participation, vesting, benefit accrual and funding; and features and funding. It establishes accountability and allows participants to sue for breaches of fiduciary duties. However, ERISA does not require an employer to have a pension plan, neither does it enforce providing minimal benefits. It only regulates the operation of a pension plan once it has been established. Below are some of the top questions on the subject answered by legal experts.

To whom and how would I report an ERISA fraud?

Since the Department of Labor’s Pension and Welfare Benefits Administration (PWBA) is responsible for enforcing ERISA, that is the place to report fraud to. The PWBA will then refer both civil and criminal violations of ERISA to the U.S. Attorney's offices, which in turn will initiate prosecution proceedings.

More specifically, you can contact the regional offices of the Employee Benefits Security Administration, a division of PWBA. The Department of Labor website links to these offices.

My husband’s ERISA funds were converted to IRA. He passed away, leaving the children of his ex-spouse as beneficiaries. However, am I not rightfully entitled to the funds under ERISA?

Was it a joint or survivor annuity ERISA account? If it was, then spousal consent would have been required to change or revoke the beneficiary designation.

Let’s make two assumptions here: that this was the nature of your departed husband’s account, and that he never attempted to revoke or change its beneficiary designation (because you make no mention of it above). It would appear, therefore, that he designated someone other than you as beneficiary initially and never changed it thereafter.

Now to the move to the second part: your husband’s account was converted to an IRA account, which is a trust account. Under Tennessee Code 45-2-704, the owner of a trust account can name any beneficiary he/she chooses to inherit the account upon his/her death, where even a probate is unnecessary.

However, Tenn. Code 31-1-105 states that any transfer that intends to defeat a surviving spouse’s share of a deceased person’s estate can be held as void by a competent court. If you can show evidence that your husband intended to defeat your right to the property, it might be grounds to force his children to return the money.

Under ERISA, would a medical disability affect the statute of limitations?

Under ERISA, the statute of limitations varies according to the suit filed: it is three years for breach of fiduciary duty, and within six years of plaintiff’s discovery of breach for actions alleging concealment or fraud. However, unless the disability is such that it impaired the plaintiff’s knowledge of the breach or helps to allege fraud or concealment, it would not affect the period.

You may want to consult a local attorney to evaluate your situation and verify if the period can be delayed.

What sections of ERISA govern the establishment and regulation of self-insured health plans?

Self-insured plans are under the purvey of 29 U.S.C. 1003 of ERISA, and not under state laws. The section places no restrictions on the types of companies that are allowed to establish self-insured plans.

The administrators of an employee benefit plan are required under ERISA to clearly describe the rights, benefits and responsibilities of participants under the plan in what is called a summary plan description (SPD). If there are any material changes to the plan or to the information set out in the SPD, the plan administrators are required to supply to participants a summary of these changes. While copies of these needn’t be filed automatically with the Department, the administrators will have to furnish copies if the Department requests it of them.

Apart from this, an annual report (Form 5500 Series; due on the last day of the seventh calendar month after the end of the plan year) must be filed every year with details of financial and other information that relates to the operation of the plan. Besides, the administrators must also provide to participants and beneficiaries a summary of the annual report (the Summary Annual Report).

If you have questions regarding your rights under the ERISA, you may benefit from write to Legal Experts for a better understanding of the law and your rights under the Act.