In general, the term “pension” refers to payments that are made to a person when they retire. The payments are distributed in certain increments and come from the retired worker’s investment fund that they previously contributed to while they were working.
The investment fund is set up according to certain terms that were agreed upon when the worker and their employer entered into a legal agreement. The details associated with the fund (e.g., what types of benefits or assets an employee can receive) are known as the “pension plan.”
Some of the factors that are used to calculate how much can be distributed from the pension plan include the worker’s salary, the amount of years they were employed at the business, the age when they retired, and many other benefits depending on the details of the pension plan.
What is Pension Fraud?
Pension fraud is an act that involves the use of misrepresentation or deceit in connection with a pension claim. Pension fraud is often found when one of the two following scenarios occurs:
- A fraudulent act was somehow involved during the distribution of pension benefits or payments; and
- An individual committed fraud with the intention to steal the other person’s pension funds.
The first type of pension fraud usually entails a conflict between a worker and their employer. The dispute might include a claim that the employer has acted fraudulently in either providing or denying the worker’s pension benefits.
The second type of pension fraud listed here may include a variety of different scams or fraudulent schemes that are generally aimed at obtaining the retiring individual’s private information. Once this information is acquired, the fraudster may then steal or misappropriate the person’s pension savings.
A common example of such a situation is a mortgage fraud scheme. A mortgage fraud scheme may be used to obtain a person’s confidential information by faking a mortgage arrangement between the unsuspecting person and the fraudster.
What are Some Examples of Pension-Related Fraud?
Some examples of pension-related fraud acts committed by an employer may include:
- Misrepresenting the amount of payments that the retiree will be paid each month;
- Providing false information concerning the transferability of the retiree’s pension rights or benefits;
- Supplying false information about how much an employee has contributed to their retirement fund; and
- Various related issues, such as tax or insurance fraud, that can be associated with the pension plan.
Some other examples of general types of pension fraud that are unrelated to an employer might include:
- When an individual carries out a mortgage or loan fraud scheme that involves taking funds out of a person’s pension;
- Fraud aimed at an elderly person or other individuals who have saved up a significant amount of funds, especially when the fraudster is a caretaker or an employee of a nursing home;
- When an individual who can claim power of attorney privileges abuses their power, then it might be considered fraud; and
- If there is a digital or online theft of funds stolen from a person’s pension accounts.
Pension fraud can also involve a trustee or other third-party person who is entrusted with the legal duty to care for the pension holder’s assets. This might include violations, such as commingling the pension’s assets with their own funds, or using the pension’s funds for personal gain (e.g., using the pension funds to buy themselves an expensive gift).
How is Pension Fraud Remedied?
Pension fraud is generally remedied by bringing a civil lawsuit against the party responsible for the fraud. This will typically lead to an outcome in which the court will most likely issue a damages award in order to help the victim recover any of their lost pension funds or benefits.
In many instances, criminal charges may also result from the fraudulent act. This is especially true for cases that involve committing tax fraud or other white-collar crimes. If criminal charges are also filed, the criminal penalties can range from having to pay serious criminal fines, serving some period of time in jail, or in extremely serious cases, both.
Should I Hire a Lawyer for Help with Issues Involving Pension Fraud Claims?
Pension benefits and retirement plans frequently involve a substantial amount of funds. As such, if you need help managing or negotiating a pension plan that suits your needs, then you should consider contacting a local employment lawyer for assistance.
An experienced employment lawyer can help to ensure that your interests are being fully protected and will be able to provide further legal advice about fraud schemes that could impact your pension fund.
Additionally, if you need to file a claim due to pension fraud, a lawyer can represent you in court on the matter and will be able to determine the best course of legal action for you to take in order to recover owed damages.