Cohen Milstein is conducting an investigation of companies which have established unfunded pension plans for their employees. These plans are frequently referred to as “Top Hat” Plans or Deferred Compensation Plans or Excess Compensation Plans (though they may be referred to in some other way). Such plans are intended to be limited to a select group of highly compensated employees; however, a number of companies have created such plans that do not meet these requirements. The mislabeling of your retirement plan may have an impact on your rights to receive payment and the amount of income you receive in retirement.
Why It Is Important Whether Your Plan is an ERISA Pension Plan
If the plan is not limited to a small number of highly compensated employees, the plan may, in fact, be a pension plan fully-regulated by ERISA (the federal law regulating pension plans). If your “Top Hat Plan” or “Deferred Compensation Plan” (or other plan that provides payment in your retirement) is, in fact, a fully-regulated pension plan, ERISA may provide you with far greater rights than currently provided under the terms of the plan. For example, a top hat plan might provide that your right to payment could be forfeited unless you have 10 years of service, while ERISA would require that such benefits could not be forfeited after a maximum of 7 years of service. Likewise, ERISA may require that the plan allow that you accrue – or earn – a specified level of benefits at a greater rate than currently provided under the terms of your plan. In addition, a “Top Hat” Plan may not be funded, but ERISA would require that the plan be funded. By requiring that a pension plan is funded, ERISA ensures that there is money set aside to pay your benefits from the plan when you retire (and prevents such monies from creditors of the company). Finally, ERISA has detailed rules protecting employees regarding the termination of pension plans, which protect your rights to receive your benefits when you retire.
Related Article: "Top Hat" Plans: Unmasking This Special Species of Pension Plan
Questions To Ask To Determine Whether You Want More Information
If you are currently a participant in such a plan (or were a participant in such a plan at a prior employer), the following questions suggest that you might want to seek additional information about the status of your plan. If you answer “Yes” to the following questions, you may want to seek additional information about your plan and your rights:
- Are you a participant in an unfunded retirement plan that promises to provide payments when you retire? (Such plans may be called a “Top Hat Plan” a “Deferred Compensation Plan” or an “Excess Compensation Plan” but are probably not called a pension or 401k plan)?
- Are you employed by a private (i.e. non-governmental) employer?
- Is your position not one of the highest level of management (and/or does the plan include persons, such as mid-level managers, who are not high-level executives)?
Whom To Contact For More Information
If you are interested in learning more, please contact one of the following persons:
R. Joseph Barton, Esq. email@example.com
Cohen Milstein Sellers & Toll PLLC
1100 New York Avenue, N.W., Suite 500
Washington, D.C. 20005
Telephone: 888-240-0775 or 202-408-4600
The law firm of Cohen Milstein Sellers & Toll PLLC is a nationally recognized plaintiffs' class action law firm and has significant experience in representing employees injured by corporate misconduct.