To BenefitsLink Home Page
To EmployeeBenefitsJobs Home Page
Get the BenefitsLink app for iPhone and iPad LinkedIn
Twitter
Facebook
Search the News


Featured Jobs
Plan Administration/Employee Benefits/Sales Support
Benefit Group: Sales Manager
Retirement Plan Administrators
Legal & Compliance Specialist
Conversion Consultant
Conversion Manager
Plan Consultant
Documents Coordinator
Actuarial Consultant
Plan Administrator II
Retirement Leaders
Conversion Specialist
Relationship Manager
ERISA Attorney
Account Manager
Salesperson
Employee Benefits Sales Consultant
Associate Vice President & Regional Sales Consultant
Search all jobs
 

 
 
 

Jump to content


Photo

Can vested balances be used to reduce embezzled amount?


  • Please log in to reply
6 replies to this topic

#1 Dianes

Dianes

    Registered User

  • Registered
  • 7 posts

Posted 31 January 2001 - 04:32 PM

I have a client that has recently discovered that his office manger has embezzled company funds. This client maintains both a Money Purchase Pension Plan and a Profit Sharing Plan for his employees. This employee is a participant in both plans and is currently 60% vested in both account balances. Can the client use the vested balances in the plans to "offset" the total amount that was embezzled? My initial thought is that the vested portion is the employees, regardless of criminal misconduct. Have any of you ever had this situation arise and what advise did you give the client?

#2 pax

pax

    Registered User

  • Sitewide Moderator
  • 4,172 posts

Posted 31 January 2001 - 05:20 PM

Some earlier discussion:

http://benefitslink....?showtopic=4546

http://benefitslink....?showtopic=8293

#3 PAUL DUGAN

PAUL DUGAN

    Registered User

  • Registered
  • 64 posts

Posted 31 January 2001 - 06:54 PM

The threads indicated by PAX are great. One other recomendation I have is hav e the clients attorney deliver the check. He can say things the client can't and they are protected by attorney client privledge.

#4 QDROphile

QDROphile

    Registered User

  • Sitewide Moderator
  • 3,490 posts

Posted 02 February 2001 - 04:15 PM

The statement about attorney client privilege in this thread is misleading.

#5 Dianes

Dianes

    Registered User

  • Registered
  • 7 posts

Posted 02 February 2001 - 04:25 PM

QDROphile - Could you elaborate on your statement?

Thanks to all of you who responed. The prior threads were most helpful.

#6 QDROphile

QDROphile

    Registered User

  • Sitewide Moderator
  • 3,490 posts

Posted 03 February 2001 - 03:13 PM

OK, here's attorney-client privilege 101:

With some exceptions, communications between a lawyer and the lawyer's client are privileged. That means another person is not entitled to know the substance of the communication. Put either the lawyer or the client on the witness stand and ask "What was in the communication?" You don't get testimony about the contents of the communication.

With some exceptions, if the lawyer-client communication is "published," the privilege is lost. Suppose the client tells her mother, "I told my lawyer I wanted to offset retirement plan distributions against embezzled funds." Put the lawyer or the client on the witness stand and ask about the communication between the lawyer and the client. You will be able to get testimony about the lawyer-client communication concerning the offset. The client can waive the privilege by telling others.

There is no privilege when a lawyer communicates with someone who is not the lawyer's client. A communication received by a nonclient is not privileged even when the client is participating in the same communication with the client's lawyer. If the mother is present when the client talks to the lawyer, the communication is not secret between the lawyer and client so it is not privileged.

I don't don't know what was meant by the comment on the privilege, but the implication was that somehow it was OK for a client's lawyer to say something to the embezzler that the client could not. Despite certain mistaken beliefs to the contrary, lawyers have no right to lie, cheat or steal or otherwise not be accountable for their actions, and anything the lawyer said to the embezzler would not be protected by attorney client privilege because the statements would not be a communication to the client. Anything said to the embezzler by the lawyer acting on behalf of the client would be attributable to the client. And it would be discoverable because it was communicated to a person other than the client.

Perhaps I didn't get it or was being unfair. I don't think attorney client privilege has anything to do with statements to the embezzler. A lawyer can't say something to someone that the client can't. To the contrary, lawyers can't say things to others that their clients can. Perhaps a lawyer might be more skilled in the choice of words. What did you think the comments about use of an attorney meant?

By the way, I am not suggesting that legal advice in this situation is somehow not worthwhile. This is a sensitive situation. You should get competent legal advice before touching plan funds to right a wrong.

#7 pax

pax

    Registered User

  • Sitewide Moderator
  • 4,172 posts

Posted 04 February 2001 - 03:18 PM

Thanks for the education on lawyer-client relations.

"Perhaps a lawyer might be more skilled in the choice of words." This might be just one more good reason to have some legal advice in this situation.