Confidentiality of Retirement Benefits

[Guest Ella]

What legal requirements are there regarding the confidentiality of the benefits payable under a qualified retirement plan?

I cannot find anything in the plan document.

I am the Benefits Specialist in the HR Dept in a corporation. A manager wants to know what is available now for one of his direct reports in the event of early retirement. We do not furnish that information except to the participant or as required in QDRO situations. However, we cannot find a legal site for that.

There is much protection on health benefits records and some states - such as Alaska - seem to have protection on retirement benefits information. Is there anything under ERISA or elsewhere?

[Kirk Maldonado]

I seem to recall that there are some DOL Advisory Opinions on this point. I vagauely recall that they said that the plan had to restrict access to that iinformation.

[GBurns]

I remember such an old DOL advisory but I could not find it for use as a cite.

My advice is to give it ALMOST the same confidentiality that you give to medical records.

However, if this manager has the power to unilaterally and arbitrarily hire or fire this individual, then this manager should be deemed to have the right to look at payroll and personal data. Does he have full unrestricted access to the personal data in the personnel files? If he does then he should have the right to the retirement plan info, but only if there is a valid reason, such as planning redundancy or a companywide early retirement offer and not just curiousity.

Targeting 1 employee seems suspicious.

If you have to do it I suggest that you refer the matter to your superiors and have them either do it or get a release from the employee, much in the same way an insurance agent gets a release of medical info, so that he can talk to the doctors of clients.

[Guest Ella]

This manager does have the right to look at compensation for this employee.

Our HR Dept manager has asked me for a legal site on which to base our refusal to furnish the information to a plant manager.

It appears that the plant manager is about to terminate this employee. What the employee has available in early retirement is irrelevant and we would prefer it not be mentioned in any management discussions with the employee.

We are having a difficult time however in making that policy stick.

Need any help you have if you have been here before.

[david rigby]

Early retirement might not be irrelevant. If the manager and/or the company wants to ease the situation of an employee being involuntarily terminated, then having information about other HR issues can be important.

[GBurns]

Although I agree with pax, I must say that you seem to need a company policy regarding termination and exit interviews. It is ver dangerous to have misc. "managers" handle terminations. This is a job that should be handled by a trained and legally aware persom. It is easy to give a litigatable reason for termination and easy to make promises regarding post-termination benefits that can bind the company.

I would say that you urgently need a written and controlled company policy, immediately.

I cannot give you a cite, but a quick anonymous call to the EEOC and PWBA should get you some cites.

[Greg Judd]

My greater concern would be that the manager may misuse the information, drawing uninformed conclusions from something like a 'raw' 401k account balance, eg "wow, [employee name] has $500,000 in their account, so they won't be financially devastated by termination."

Assuming you don't find a legal bar to the manager's access to account info (my feeling is you won't find anything clear-cut), why not prepare a "reasons to be cautious when using benefit plan info in making personnel decisions" memo?

I'm envisioning a brief bullet point/checklist kind of thing to alert the manager that they should focus any termination decision on job performance issues, & not on an employee's extraneous circumstances - whether they have to do with finances, or age, or gender, etc.

[Guest Ella]

I like the idea of a written policy or talking guidline. Right now all we have in place - is an angry plant manager.

Our general counsel feels that based on case law, people have rights to privacy where there is not a need to know. She also feels that it is part of our fiduciary responsibility to protect that privacy. So that is what we are going with now.

Thank you all for your input!

This is a great source for real world experience.

[Kirk Maldonado]

I've spent a lot of time on this issue in the past, and I believe that your general counsel is right.