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socrateaser, Lawyer
Category: California Employment Law
Satisfied Customers: 39045
Experience:  Retired (mostly)
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I retired July 1st. Prior to retirement I signed up for retiree

Resolved Question:

I retired July 1st. Prior to retirement I signed up for retiree medical coverage at no cost. The company had no cost for retired executives. A month after retirement the company sent me a notice that I had to contribute toward the cost of medical coverage. They stated this became effective January 1, 2011. However no notice of this was provided to me. The SPD they sent to me states they have the sole discretion to make such changes. My question is whether I have any rights to be grandfathered in under the old rules as executives are who retired prior to 2011? Did the company have a requirement to notify me prior to to it becoming effective? (They did change the contribution for active employees the same date and did provide notice of that in October 2011.)

They have offered to waive the contribution for 2011 in exchange for a signed release with the understanding that I will begin paying premium contributions beginning in 2012. Are they trying to skirt any obligations under the ERISA regulations? Or are they being considerate and being more than fair in correcting a simple error?

Thank you in advance for your advice.
Submitted: 6 years ago.
Category: California Employment Law
Expert:  socrateaser replied 6 years ago.
ERISA requires that a retirement plan must be 100% nonforfeitable as to contribtuions within 6 years (7 years for multiemployer plans). 29 U.S.C. 1053. Based upon this requirement, to the extent that the change of benefit can be shown to undermine your and your employer's prior contributions, then the fact that you did or did not receive notice of a change in benefits is irrelevant. What is relevant is whether or not your benefits have been undermined, because if so, then that act is a breach of trust and a violation of ERISA. 29 U.S.C. 1105.

You can file a complaint with the U.S. Department of Labor -- Employee Benefits Securities Administration, at: 1.866.444.EBSA (3272).

Hope this helps.

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