Unexpected job loss can have catastrophic financial consequences. Regardless of whether a person experiences a targeted termination or ends up included in a mass layoff, they may go weeks without a paycheck.
They are also at risk of losing key benefits on which they depend. Health insurance, disability coverage and other benefits generally terminate with employment or only last for a set amount of time after the last workday if an employee receives a severance package. They may need to pay to retain their insurance until they find new employment.
Do professionals need to worry about losing their pensions on top of everything else when a company fires them?
Timing determines the risk
Employers can typically use pensions as leverage or punishment. There are state and federal regulations that protect the rights of workers when their employers provide retirement benefits. Typically, employees must maintain their positions with a company for a specific amount of time, often between three and five years, before their pension is fully vested.
If they stay for the duration of the vesting period, their pension has legal protection. In other words, they have a right to pension benefits once they have completed the vesting period outlined in their employment contract or other key company paperwork. When terminations occur before a worker has become fully vested, the pension benefits they may have received may be at risk.
Professionals often need help reviewing contracts and handbooks to determine what rights they have after a sudden job loss. In many cases, pensions are part of a worker’s pay that have protection under the law. Working with an attorney can be the best solution for those concerned about protecting their finances while transitioning out of a role.