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ERISA Violations Involving Group Savings Plans and Other Employer-Sponsored Retirement Plans

October 6, 2015 Blog

Many individuals who work for companies that offer retirement plans have virtually their entire life savings – or at least a significant portion of it – invested either with or through their employer.

When this is the case, and when an employer’s plan manager mismanages employees’ retirement funds, employees who suffer investment losses may be entitled to just compensation. This entitlement is protected by a law known as the Employee Retirement Income Security Act (ERISA).

Understanding Your Rights Under ERISA

ERISA does not require employers to offer retirement plans, but rather imposes obligations and minimum standards on those that do. ERISA is an extremely important law for employees who participate in employer-sponsored retirement plans because it helps protect them from risky decision-making and improper practices that can compromise their life savings. ERISA is all-encompassing in terms of retirement plan options. It covers:

  • 401(k) plans
  • Defined benefit plans
  • Defined contribution plans
  • Group savings plans
  • Profit-sharing plans
  • Simplified employee retirement plans (SEPs)
  • Stock bonus plans and employee stock ownership plans (ESOPs)
  • Other forms of employer-sponsored retirement plans

Unfortunately, an alarming number of employers fail to comply with ERISA – often leaving their employees struggling to recover from sudden and significant investment losses.

Common Examples of ERISA Violations

One of ERISA’s most basic requirements is that employers’ plan managers must act as fiduciaries of the plan’s participating employees. This means that they must (i) make prudent investment decisions, and (ii) always act with the employees’ best interests in mind.

When a plan manager puts the company’s interests first or otherwise fails to act as a fiduciary for participating employees, this often leads to situations where employees suffer losses that can – and should – have been avoided. In these cases, aggrieved employees may be able to recoup their losses by filing a claim under ERISA.

Some common examples of ERISA violations that may entitle employees participating in employer-sponsored retirement plans to compensation include:

  • Overconcentrating investments, creating risk from lack of diversification
  • Preventing participating employees from accessing their invested funds
  • Continuing to invest in company stock despite knowledge of damaging information

This last example is the subject of an active investigation recently undertaken by Zamansky LLC.

Zamansky LLC Investigates Possible ERISA Violations Relating to Sanofi U.S. Group Savings Plan

In March of this year, Zamansky LLC announced that it was investigating possible fiduciary duty violations in relation to the management of retirement funds invested in Sanofi’s U.S. Group Savings Plan. Participating employees suffered significant losses when Sanofi’s stock price fell on news that the company’s CEO had been fired for alleged involvement in an illegal kickback scheme.

ERISA comes into play because it appears that the company may have known about the alleged kickback scheme and yet still allowed employees to invest in the U.S. Group Savings Plan. If the company allowed employees to invest despite knowledge of the risk of a substantial drop in the value of the company’s stock, employees who suffered losses in the plan may be entitled to compensation.

Have You Suffered Losses in an Employer-Sponsored Savings Plan? Contact a Stock Market Loss Lawyer Today

If you have suffered significant investment losses in a group savings plan or other employer-sponsored plan, you may be entitled to recover for your losses. Zamansky LLC has represented hundreds of investors for breach of fiduciary duty and other forms of impropriety, and can help make sure you receive the compensation you deserve. To find out if you have a case, call Zamansky LLC at (212) 742-1414 or contact us online to schedule a free consultation today.

Client Reviews

“Jake Zamasky and his colleagues represented me in a FINRA arbitration case against a large multinational bank and succeeded in obtaining an award for the full amount of my investment losses. I would highly recommend the Zamansky firm for their experience in securities litigation, their level of detailed research and case preparation, and their ability to effectively fight for what’s right.”

Richard R.

“Throughout my entire case, Jake Zamansky was incredibly responsive and spent time walking me through each step of the process. He is professional and worked with my challenging schedule, even meeting with me nights and on weekends. He knew exactly which turn to take when it came to my case and yet was respectful of any decisions I wanted to make resulting in a positive outcome.”

Donald A.

“Jake Zamansky and his firm represented me in a FINRA arbitration case to recover investment losses. Jake and his team were very professional and worked very hard preparing for trial and then reaching a substantial settlement of our case. I would highly recommend them.”

William E.

“Jake Zamansky represented me in a FINRA arbitration case which allowed me to recover a substantial portion of investment losses. He is truly an expert in this space and I would highly recommend him to those investors who may have been been a victim of investment fraud.”

Chris K.

“Jake and his team did a great job communicating with me throughout the process of my lawsuit. I would recommend him to anyone looking to sue UBS for unethical practices.”

Mike A.
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