What Types Of Compensation Claims Are Subject To ERISA?

ERISA, the Employee Retirement Income Security Act, covers many types of compensation claims such as pensions, severance and bonus plans. To understand the finer points of each, we asked Ron Dean, a California attorney who has been engaged in employee benefits litigation primarily on behalf of participants for over 30 years. Here’s what he told us:

• Pension. Pension claims are critical. After all, they represent a primary income source for the rest of your life. ERISA’s provisions relate almost entirely to pension plans and include complex rules about participation, vesting and “benefit accrual.” Much of this requires experts, such as actuaries, to figure out. It is important to make sure that your benefit has been properly calculated. If the plan is telling you you’re not entitled to any pension, or only a partial pension, it’s time to call a lawyer.As with other benefit claims, if you’ve been denied all or part of your benefit, you have to get the “relevant documents,” timely appeal the decision and make sure you address all the reasons for the denial.
• Other pension plans. Recently, there have been a number of cases involving things called “cash balance plans” which are really complicated. Of course, 401(k) plans, Employee Stock Ownership Plans (ESOP’s), employer sponsored IRA’s, defined contribution plans, and a variety of others, fill out the zoo-like variety of pension plans.
• Severance. Severance Plans present a whole new set of problems. They can be amended at any time, for pretty much any reason. The kinds of conditions and limitations they can put in those things can make a lawyer blush. Just trying to find your way through the language can give you a big headache.
• Bonus. Bonus Plans are rarely ERISA plans, but there are exceptions. Also, the IRS likes to get involved to see when those bonus payments should be taxed. It’s never easy.
• Top Hat. Top Hat Plans, plans for higher level executives, are subject to some, but not all of ERISA’s provisions, but can provide substantial income for those allowed to participate in them.

Overcoming pitfalls in the claims process

The ERISA claim process can be difficult – especially when pensions are involved. However, Dean says that while sometimes difficult, the process is not impossible. He provided this advice, “As with other claims, the biggest problem is making sure not only that you exhaust your administrative remedies in a timely and complete way, but also to make sure you seek the right help in doing that. Because these plans are more technical than other kinds of plans, and because they involve substantial sums, it’s important to at least consult with an attorney or other experts before presenting your best case.”

If you’ve been denied valid benefits that are subject to ERISA, contact an attorney whose practice focuses in this area of the law. Consultations are free, without obligation and are strictly confidential. To contact a qualified attorney to discuss your situation, please click here.

Case Studies: Types of Compensation Claims Subject to ERISA

Case Study 1: Denied Pension Benefits

John, a long-time employee of a large corporation, reached retirement age and applied for his pension benefits as outlined in the company’s pension plan governed by ERISA. However, to his surprise, his pension claim was denied by the plan administrator, citing a technicality in the application process. Despite meeting all the eligibility requirements, John was left without the pension benefits he had rightfully earned.

Seeking to challenge the denial, John sought legal representation from an attorney experienced in ERISA claims. Together, they carefully reviewed the relevant documents, including the pension plan provisions and John’s application. The attorney prepared a comprehensive appeal, addressing the reasons for the denial and highlighting the flaws in the plan administrator’s decision.

With the assistance of his attorney, John navigated the complex administrative appeals process required by ERISA. They presented a compelling case, emphasizing John’s entitlement to the pension benefits and countering the plan administrator’s technicality argument. As a result of their diligent efforts, the denial was overturned, and John was awarded the pension benefits he deserved.

Case Study 2: Denied Severance Package

Mary, an executive at a struggling company, was laid off due to downsizing. According to the company’s severance plan, employees who were laid off were entitled to a severance package based on their years of service. However, when Mary submitted her claim for the severance benefits, it was rejected by the plan administrator, who cited a misinterpretation of the plan’s provisions.

Determined to challenge the denial and secure the severance benefits she believed she was owed, Mary sought legal representation from an attorney specializing in ERISA claims. The attorney carefully analyzed the severance plan and Mary’s employment history, identifying the plan administrator’s erroneous interpretation. Mary’s attorney filed an appeal on her behalf, providing a detailed explanation of the correct interpretation of the plan’s provisions and emphasizing Mary’s eligibility for the severance benefits.

They also highlighted the financial hardship Mary faced as a result of the denial. Thanks to the attorney’s expertise and persuasive arguments, the plan administrator reconsidered the claim and reversed their decision. Mary was subsequently awarded the full severance package she was entitled to, providing her with the financial support she needed during her transition to a new job.

Case Study 3: Denied Disability Benefits

Michael, a software engineer, suffered a serious back injury that left him unable to work. He had long been covered by his employer’s disability insurance plan, which was governed by ERISA. Seeking financial support during his inability to work, Michael filed a claim for long-term disability benefits through the insurance plan. However, to his dismay, his claim was denied by the insurance company, asserting that his injury did not meet the plan’s definition of “total disability.”

Feeling that the denial was unjust, as his injury significantly impacted his ability to perform his job duties, Michael decided to challenge the decision. He enlisted the help of an experienced ERISA attorney who specialized in disability benefit claims. The attorney meticulously reviewed Michael’s medical records, employment history, and the disability insurance plan’s provisions. They discovered that the insurance company had failed to consider essential medical evidence and had misapplied certain plan criteria in evaluating Michael’s claim.