Is this legal?

an_employee

I work for a small company in California with under 15 employees. We have a traditional pension plan. Like many companies times are tough. Rumor has it that the owner, also a member of the pension plan, loaned the company money to make payroll this month.

I just received a new copy of the pension plan, hot off the press. A new section had been added to allow members of the plan to borrow money from the plan. The maximum loan limit is (surprise!) just the size of our payroll.

I do not know for a fact that the boss borrowed, indirectly, from our savings to make payroll, but it sure looks that way. I am no lawyer, but this looks like a wrongful conveyance to me.

So, like the title of my post, is this legal?

dunstonh

Assuming California near Great Yarmouth with this being a UK site....

Rumor has it that the owner, also a member of the pension plan, loaned the company money to make payroll this month.

Work place rumours tend to be inaccurate and often downright dangerous. Relying on them usually is not a good idea.

What type of pension scheme is it? Final Salary, money purchase or a group personal pension?

an_employee

Right now I am wishing that it is the California near Great Yarmouth.

It is a traditional pension plan/profit sharing plan. In other words, the company contributes a portion of profits annually without employee matching. The company invests the money as they see fit. It is self administered as a trust.

waltzer

Is it the California near Falkirk Scotland?

whitfreak

While I don't know US law. Such a change could only happen legally if the trusties of the pension scheme agreed. And the members should have been informed before it went into force. And that presumes that such a move is legal anyway. If your in a union talk to them, they should have a suitable lawyer on retainer. If not check you orginal copy of the rules/terms and conditions and check that there has actually been a change. And if there is then findout who you complain to to find out how and when it happened. And if it still looks illegal find a lawyer. Although be careful if your in a "at will" state.

(Although for a small company, that it runs a pension scheme I'm surprised its in house)