Employee Lawsuits Increase Over Financial Meltdown

The financial meltdown and instability in the market has given rise to an increase in class-action filings seeking recovery for 401(k) losses. There is a growing number of laid-off workers that are expected to file more Worker Adjustment and Retraining Notification Act lawsuits and age discrimination lawsuits as a result.

Here is a short compliance checklist for employers and fiduciaries to guard against ERISA litigation:

  • Ensure all your plan documents are up-to-date. Write an investment policy statement and document every meeting.
  • Confirm all fiduciaries understand their responsibilities.
  • Hold periodic meetings to review responsibility, salary and loan deferrals to avoid litigation under the provisions of section 404(c) under ERISA.
  • Review fees to ensure they are reasonable. Provide employees with up-to-date plan positions.
  • Maintain a process to respond to claims.

Employers can protect themselves against legislative expansion with basic common sense disclosure and taking steps to invest in resources that educate managers about discrimination and compliance.