Employee Rights and Employment Policy Journal

When employees are offered exit incentives, their often long-time expectations about the value of their retirement benefits are rarely satisfied. Since expectancies are based upon a specific tenure, foreshortening one's time at work radically reduces one's post-work income, especially since vested pensions tend to spike toward the latter years of employment. Current federal law does not attach fiduciary obligation on the presentation, modification, or award of exit incentives. A modest change to the Employee Retirement Income Security Act would make communications about the content, creation or modification of any benefit offered in exchange for an employee's relinquishment of continued participation in a pension plan subject to the trust duties to truthfully advise the employee, who may then make informed decisions about these substitutes for trust fund growth.