Jump directly to the Content

Fiduciary Duties of Pension Plans

Do pension plans have a duty to warn of the tax consequences of withdrawing funds?

Key point: Pension plans should carefully review the representations and assurances set forth in their plan documents and informational brochures, since they may be legally accountable to employees if such representations are not honored.

• Do pension plans have a fiduciary duty to warn participants of the tax consequences of a decision to withdraw their funds? That was the question addressed by a federal court in Michigan. An employee received a lump sum distribution from his pension plan in the amount of nearly $120,000 and promptly rolled it over into an individual retirement account (IRA). By investing in an IRA within 60 days of the distribution, the employee avoided income taxes on the funds. However, the employee later removed the funds from his IRA and used them to buy real estate, assuming that he would still not need to pay income taxes on the funds since they had been ...

Join now to access this member-only content

Become a Member

Already a member? for full access.

Related Topics:
Posted:
  • May 2, 1994

Related ResourcesVisit Store

Understanding Church Insurance
Understanding Church Insurance
Understand your church's insurance needs to be assured you have adequate coverage.
50-State Public Accommodations Laws Report
50-State Public Accommodations Laws Report
How statutes and court decisions across the country do - or don't affect churches
Church Issues: Waivers and Release Forms and Church Liability
Church Issues: Waivers and Release Forms and Church Liability
What these documents do—and don't do—based on statutes and court decisions made nationwide.
Understanding Pastoral Liability
Understanding Pastoral Liability
Know the situations in which a pastor is personally liable for wrongdoing.