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Under Internal Revenue Service (IRS) regulations, qualified retirement plans must pass a nondiscrimination test. In order to pass this test, and thus qualify as non-discriminatory, a plan
must offer all employees within the company the same benefits. As a result of these participation rules, many companies set up nonqualified retirement plans for their highly compensated executives and other members of senior management. These nonqualified plans can come in many different forms.
At Kantor & Kantor LLP, our attorneys have a deep understanding of executive deferred compensation plans and their interaction with ERISA. If you are having any trouble obtaining your full and fair executive compensation benefits in Oakland, please get in contact with our team today.
The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that regulates employer based retirement plans. This law sets up many different minimum standards to which qualified retirement plans must conform. While nonqualified retirement plans, such as executive deferred compensation plans, must follow ERISA’s disclosure and reporting standards, these plans are not subject to most of ERISA’s requirements. This comes with both upsides and downsides.
On the one hand, the fact that nonqualified plans are not subject to participation standards means that they can offer far more generous benefits than most qualified plans. On the other hand, these plans are also exempt from ERISA’s funding standards and fiduciary duty rules. As such, plan participants find themselves in a potentially vulnerable position. Since executive deferred compensation plans do not need to be funded in a trust, some employers sometimes look to save money by aggressively looking for any reason to deny claims. In far too many cases, claims are denied for wholly illegitimate reasons.
The specific terms of a nonqualified retirement plan often vary widely and there are many different issues that can arise and could potentially lead to an employer trying to deny or limit your claim. Indeed, there are certain situations where benefits become particularly at risk. Whenever a company is financially distressed, or when it is going through some type of reorganization or buyout, deferred compensation benefits may be vulnerable. Additionally, when an employee leaves the company on bad terms or takes another position at another firm after retiring, there is a risk that a claim may be denied. Of course, just because a claim was denied does not mean that you are out of luck. The bottom line is simple: Executives need to be ready to fight for their benefits.
At Kantor & Kantor LLP, our attorneys have extensive experience handling SERP and other types of executive deferred compensation claims. If your claim has been denied in Oakland, please contact our office today to set your free initial legal consultation.
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