• FreeAdvice has a new Terms of Service and Privacy Policy, effective May 25, 2018.
    By continuing to use this site, you are consenting to our Terms of Service and use of cookies.

Does My Employer Have to Abide by Severance Agreement Regarding Pension Benefits?

Accident - Bankruptcy - Criminal Law / DUI - Business - Consumer - Employment - Family - Immigration - Real Estate - Tax - Traffic - Wills   Please click a topic or scroll down for more.

S

subrian

Guest
What is the name of your state? Illinois

I was recently laid off from a non-profit organization in Illinois after nearly 4.5 years. As part of the layoff, I signed a severance agreement. The agreement explicitly stated that I had vested in my pension, and that a calculation would be made and mailed to me. In addition, the HR representative that I spoke with during my exit interview mentioned that my years of service were close enough to the required 5-year vesting requirement, and that I would receive a pension.

A few weeks after signing the agreement, I was notified by both HR and the company that maintains my organization's pension that I did not qualify for any pension benefits, and would receive nothing. I wrote to the HR representative questioning the decision, and she wrote back stating that she had made a mistake when she originally determined that I was eligible for pension benefits

Is it legal for them to do this? I thought the severance contract was legally binding for both the employer and employee. What steps can I take to regain my pension?

Thank you.
 


Beth3

Senior Member
The actual terms of the Plan Document for the Pension Plan will take precedence over any other agreement the employer makes. Pension and retirement plans are subject to a high degree of scruitiny by the federal government and an employer is BOUND by the terms of their Plan Document and ERISA regulations.

The bottom line is that if you haven't met the service terms outlined in the Plan Document required to receive a benefit, then that's the end of the story. The HR person was foolish to tell you that you were "close enough" to receive a benefit but that was not a binding statement nor does it override the the terms of the pension plan.

You may want to show the severance agreement to an attorney as if the language contained therein is binding, you may be due some other consideration in lieu of a pension benefit but short of a court order, an employer cannot be compelled to violate ERISA regulations.
 

Find the Right Lawyer for Your Legal Issue!

Fast, Free, and Confidential
data-ad-format="auto">
Top