What is an ERISA Whistleblower?


The Employee Retirement Income Security Act (ERISA) aims to protect the retirement income of employees by imposing obligations on private companies and plan administrators when pension plans are offered. ERISA protects employees who have defined contributions or benefits plans by imposing a fiduciary duty on plan administrations and sponsors, by outlining certain acts as prohibited and by imposing other specific obligations and restrictions.

Unfortunately, despite ERISA, fraud and wrongdoing occur anyway. Plan administrators charge high fees or misappropriate funds, companies underfund pensions, risky investment choices or made and a variety of other wrongful actions are taken that put employee pensions in jeopardy.

Far too often the wrongdoing goes on behind the scenes and is not discovered for many years until employees who count on receiving promised benefits end up without the money they need. These risky situations can be avoided if whistleblowers or employees in-the-know come forward to report wrongdoing. An employee who does come forward may be classified as a whistleblower and may be entitled to certain protections under the law.

What is an ERISA Whistleblower?

An ERISA whistleblower is an employee who has evidence or information to suggest an ERISA fiduciary is violating guidelines set forth in the Employee Retirement Income Security Act. The employee with this information becomes a whistleblower when he or she reports the information about the wrongdoing so action can be taken to stop the inappropriate behavior and protect employee pension funds.

ERISA whistleblowers are entitled to protections under the law. The second clause of ERISA Section 510 prohibits the discharge, firing, suspension, or expelling of an individual just because that individual has given information related to ERISA compliance, or because that individual has testified in an inquiry or a proceeding related to ERISA. The law specifically states retaliatory behaviors are a violation of ERISA if a whistleblower has “given information or is about to testify in any inquiry or proceeding related to” the act.

In many cases where fraud or other problems arise in the workplace, whistleblowers are able to go to their supervisor, an HR professional, or someone else who has authority. In ERISA cases, however, employees should think carefully before they pursue informal internal complaints about violations. In the past, the courts have not always extended protection from retaliation to these whistleblowers.

The firth circuit, seventh circuit, and ninth circuit courts in the United States have ruled on the issue of whether an internal complaint about an ERISA violation was sufficient for the employee to qualify for the whistleblower protections build into ERISA and have determined employees are classified as whistleblowers when they alert someone within their organization to potential pension fraud. However, other courts including the second circuit, third circuit, and fourth circuit have refused to extend ERISA whistleblower anti-retaliation protections to those who made internal complaints only.

Getting Help From a Whistleblower Lawyer

It is imperative you come forward if you have evidence an employer, plan manager or other fiduciary has failed to live up to ERISA protections for employee retirement accounts. However, you must do so in a way that protects your job as well as your retirement security. An ERISA whistleblower lawyer at Zamansky LLC will help you to make sure you are able to get whistleblower protections by assisting you in developing an effective plan for reporting wrongdoing. Call today to learn more.