Vesting in a Multiemployer Plan

[Guest Carol the Writer]

I have a friend whose husband is a participant in a multiemployer defined benefit plan. He had "4 1/2" years of active service, plus one year of service during which he was disabled. Now he is being notified that he is he has forfeited all benefit rights, even the rights to refund of his mandatory employee contribution account.

Is this legal? Can they do this to him? Any thoughts would be appreciated. And Happy Thanksgiving!

[Effen]

I have seen some strange vesting rules used by multi-employer plans, but they tend to be more generous, not more restrictive. A lot would depend on the number of hours he was working.

Either way, I believe employee contributions are always 100% vested. However, he may think they are employee contributions, when in reality they are employer contributions. Since they negotiate the contribution rates, and usually trade pay for contributions, they often think of them as "my money", when in reality it is employer money.

[david rigby]

Effen is correct.

The participant should get out and read his SPD. (He did save it, didn't he?)

[Guest Carol the Writer]

Thank you very much. That's what I thought.

[Guest Brian4]

If the individual has four plus years of coverage under the plan, he or she can reasonably expect the plan administrator to respond to a request for the Summary Plan Description. It may also address how the plan is financed.

Employee contributions to multiemployer pension plans are rare. Employer contributions are often made on a formula that references units of work, such as hours of service. But, these are employer contributions. Looking at payroll stubs for the indivdual could help clarify if employee contributions were made.