A class action lawsuit investigation is currently looking into whether the popular fast food chain McDonalds violated the Employee Retirement Income Security Act of 1974, ERISA. The lawsuit investigators believe that McDonalds may have made imprudent investments causing many of their employees to possibly see a decrease in the value of their retirement plans.
McDonalds employees who may have signed up for a 401k retirement plan include supervisors, managers, assistant managers, shift managers, crew trainers, district manager supervisors, district supervisors, district trainers, directors of operations, and many other managerial positions.
What is a 401k?
Back in 1978, the Internal Revenue Code allowed for a new type of retirement plan, the 401k. 401ks allow for employees to make a pre-tax contributions to their retirement plans. These pre-tax contributions are automatically deducted from an employees weekly paycheck. Taxes aren’t paid on the money in the account until it is withdrawn from the plan. This not only helps employees save money but also helps to reduce the employees’ taxable income, and overall tax liability.
Many employers, like McDonalds, choose to match their employee contributions within certain limits, although the law does not require them to do so. Some employers require employees to meet a waiting period before allowing them to begin participating in their 401k or before the employer will begin to match contributions. The Internal Revenue Service has set a maximum contribution amount for 401k plans which is often adjusted for inflation. In 2014 the maximum contribution was $17,500. While an employee is always 100 percent vested (has complete ownership) in his or her own personal contribution, many employers require employees to work for the company for a set number of years before the employee gains ownership over the company’s contribution to the 401k.
McDonald’s 401k Retirement Plans
McDonald’s 401k careers website states that McDonalds employees are able to place between 1 and 50 percent of their salary into their McDonalds 401k plan. The corporation contributes 300 percent for the first 1 percent of pay the employee contributes to their plan and $1 on the next 4 percent the employee contributes. According to McDonalds career website, employees are 100 percent vested in both the employee’s contribution and the company’s from the very beginning.
Supervision Over Employee Retirement Plans
In 1974 the Federal government created the Employee Retirement Income Security Act (ERISA). This act created protections for employees with retirement plans. According to ERISA, the investors, or fiduciaries, responsible for overseeing employee benefit plans are required to follow certain guidelines and act in the employee participants’ best interests. Company’s like McDonalds are required to act with prudence, diversify investments, and avoid conflicts of interests. When companies fail to uphold these responsibilities they are in violation of ERISA and are vulnerable to lawsuits.
Potential McDonald’s Employee Lawsuits
Investigators are looking into whether McDonalds violated these ERISA laws and standards. It has been alleged that McDonalds fiduciaries may have made imprudent investments causing employees’ 401k plans to lose value. If legal action is taken McDonalds employees who held a 401k plan with McDonalds since 2007 may have the possibility of receiving compensation if the potential McDonalds lawsuits are successful.
Join a Free McDonalds 401k Class Action Lawsuit Investigation
A class action lawsuit investigation is currently underway to pursue the possibility of taking legal action against McDonalds for potentially violating ERISA. If you are a McDonalds employee who signed up for a McDonalds 401k account since 2007, you may have a legal claim.
