Partner
The 2019 award winner is a local medical practitioner who we will call “Doctor X.”
Doctor X notified his employees that he was terminating their defined benefit pension plan. The notice contained an offer of immediate payment of benefits in a lump sum in exchange for an employee release. Doctor X also told his staff that:
•They had to sign the termination paperwork ASAP or he would reduce their benefits by any additional professional fees incurred if they delayed in doing so.
•The plan had been retroactively frozen for two years before (without notice!) so no one had earned any benefits for the past two years.
•Doctor X shared his practice facility with another practitioner for about one year. During that year, the service of full-time employees was allocated between Doctor X and the other practitioner so that Doctor X could say that his employees had failed to earn full-time service credit for the year.
The bottom line is that Doctor X’s various schemes to deprive employees of their plan benefits reduced their lump sum payments by almost one-half! This could leave a lot more money for Doctor X – who also was a participant in the plan.
So, for his self-interested, after-the-fact finagling with his plan in complete disregard of his duties as plan trustee, Doctor X gets the well-deserved Hall of Shame recognition for 2019. But 2019 also was his year of comeuppance because we were able to “persuade” him to do the right thing and pay the full benefits to which our client and other employees were entitled.
TAKEAWAY:
If you have to deal with someone like Doctor X, call the doctor – the pension doctor!