The role of a lawyer, as well as the definition and purpose of a pension plan, will vary depending on the jurisdiction. In general, however, pension lawyers’ responsibilities are very similar in all of the countries that recognize pension plans. Pension lawyers’ primary responsibility is to ensure that the pension plan complies with all applicable laws in the jurisdiction in which it is administered. Pension lawyers must be knowledgeable in a variety of areas of law, including employment law, tax law, and securities law, among others, in order to ensure compliance with all relevant laws.
In general, a pension plan is a private or public arrangement that provides employees with a steady stream of income after they retire. Employees at both government and private employers have traditionally been offered a pension plan as one of the many perks of working for the company or agency. Some pension plans are entirely funded by the employer, while others allow employees to make contributions. Typically, a plan in which the employee contributes is referred to as a “retirement plan.” However, whether the plan is funded entirely by the employer or partially by employee contributions, the responsibilities of pension lawyers are virtually the same.
The money used to fund a pension is usually invested by the employer so that when employees are ready to start collecting their pensions, they have the funds they need. As a result, pension lawyers must advise employers on the laws surrounding money management and investing money set aside for the benefit of others. Employers have a fiduciary duty to manage funds responsibly and in the best interests of their employees. A breach of fiduciary responsibility can result in civil penalties as well as criminal charges in some cases.
Both the employer and the employee face tax implications when it comes to pension plans. Pension lawyers also have the responsibility of informing their clients about the tax laws that apply to the contributions made to the pension plan. Most employers also provide information to their employees about the tax implications of early withdrawal of pension funds, so a pension lawyer must ensure that the employer is also aware of these laws.
When determining the rules of a pension plan, employment laws may also be relevant. Some jurisdictions have age discrimination laws that must be considered when determining when an employee can begin receiving his or her pension voluntarily, or when an employee is required to accept pension distributions. To avoid being involved in age discrimination litigation, pension lawyers must ensure that their clients are aware of these laws.