Pension Plan Fraud Protection

Most employees expect to retire in relative comfort, relying on the promise of an employer sponsored pension plan after their retirement. However, many employees discover the pension plan they are relying on is underfunded, or that their employer is guilty of pension dipping, thus depleting the pension funds their employees rely on.

At the law firm of Charapp & Weiss, our pension plan fraud protection attorneys represent employees who are victims of pension plan fraud. We offer pension plan advice and counseling, as well as representation in litigation for employees who do not receive their expected pensions because of fraudulent conduct.

Types of pension plans explained

There are two basic types of employer sponsored pension plans:

  • Defined contribution plans: In a defined contribution plan, the employer contributes a given amount to an employee’s retirement account regularly for a set period, such as annually or monthly. The employee makes investment decisions once the funds are in the retirement account, assuming all of the investment risk.
  • Defined benefit plans: In a defined benefit plan, the employer makes periodic payments to the employee once the employee retires. These payments are based on factors such as the length of time the employee was at the company. The employer assumes all of the investment risk in a defined benefit plan.

Tackling problems with pension plans

Defined benefit plans in particular are complex and subject to fraud and scams. Some problems a pension plan lawyer most commonly sees include the following:

  • Pension plan dipping by employers that need cash to run their business
  • Plan overpayment by employers or employees because of misrepresentation by insurers
  • Insurance company misrepresentation of allowable tax deductions and tax exemptions

One of the most serious and common scams our pension plan lawyers assist with involves 412(i) pension plan fraud. In this scam, insurance plan promoters tell employers that contributions to employee retirement plans can be up to ten times more than traditional plans, and that they can withdraw up to 80 percent of funds on a pre-tax basis. The duped employer overpays into the retirement fun and is guilty of participating in an abusive tax shelter or listed transaction. Meanwhile, the insurance agents and promoters receive substantial commissions on plan sales.

Sophisticated representation. Attentive service.

Contact a pension plan attorney at Charapp & Weiss today for more information about pension and retirement plan fraud protection and targeted solutions for your defective pension plan.