The Employee Retirement Income Security Act of 1974, as amended (‘ERISA‘) sets minimum standards for the management of employer-sponsored retirement and health benefit plans. Workers and retirees across America depend on their company-sponsored benefit plans to provide them with health insurance and financial security after retirement. For more information about Keller Rohrback’s ERISA practice, please click here.


Retirement Plans

Fiduciaries of ERISA-governed retirement plans choose the investment options available to plan participants. These investment options necessarily play a critical role in plan participants’ retirement income.

In selecting and monitoring plan investment options and investing plan assets, ERISA fiduciaries are required to act prudently, loyally, and in the best interests of plan participants. ERISA’s fiduciary duties apply to all plan investment options, including company stock. When employers fall short of their ERISA fiduciary duties, employees can seek to hold their employers accountable for plan losses caused by the employers’ breach.

Keller Rohrback is a national leader in pursuing ERISA breach of fiduciary duty claims against employers for losses to plans caused by imprudent investment in company stock. 

Private Company ESOPs

An Employee Stock Ownership Plan (‘ESOP‘) is a tax-qualified defined contribution employee benefit program intended to invest primarily in the stock of the plan sponsor company. Both private and public companies offer ESOPs.

Owners of companies frequently establish ESOPs to allow employees an opportunity to invest in the company’often as a reward or incentive for employees or as part of a retiring owner’s exit strategy. Unfortunately, shares of company stock are sometimes valued and sold to the ESOP at a price that is greater than a third party would pay.

The central issue in private company ESOP cases is whether the price the ESOP paid for the company stock was too high. Under ERISA ‘ 408(e): (1) the price paid must reflect the fair market value of the asset, and (2) the fiduciary must make a good faith and prudent investigation of the circumstances prevailing at the time of the sale or purchase. Keller Rohrback attorneys are very familiar with applicable stock valuation techniques and methodologies and work closely with valuation experts.

Health Care Benefits

In addition to retirement plans, ERISA also governs how employee health care plans are administered. Health care plans must be operated with particular standards that were designed to protect the interests of employees, retirees, and other plan beneficiaries, such as family members.

ERISA creates fiduciary responsibilities for those who manage and control health plans, requires that plans provide participants with accurate plan information, and gives plan participants the right to sue for benefits and breaches of fiduciary duty.



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