A large number of companies have made employee stock option plans as part of their workers’ 401(k). However, many employees may have noticed a significant dip in the values of their 401(k) plans in the past few months owing to the worldwide economic crunch, and it is important to note that the value of these stock options may be in jeopardy.
One of the major problems with 401(k) and similar employee retirement plans is that employees themselves practically have no say regarding how or where the money in these plans is invested. Company executives and fund managers are expected to make smart investments on behalf of their employees, and to give honest, reliable and transparent reports about these investments.
However, these executives and fund managers work for the company, first and foremost. Therefore, they may continue investing employee stock option plans in company stock even when it is not financially prudent. While is good for the company to have these plans’ assets, this may not be beneficial for the employees in the long term.
Fortunately, employees have the ERISA to lean back on when misuse of retirement plan funds is a possibility. The Employee Retirement Income Security Act is a federal law that sets minimum limits for pension and health plans set up by private businesses for their employees. The ERISA safeguards all elements of a 401(k), including any employee stock option plans, and a timely lawsuit in cases of fund mismanagement can help employees recover their hard-earned benefits.
However, the ERISA can be a very complex undertaking for laymen, particularly when group or class action lawsuits are involved. Attorneys specializing in labor laws and practices may be the best option for workers looking to file an ERISA lawsuit.