CONTRACT LAW

• Measure financial damages from breach of contract
• Assist with design of contingency and default compensation benefits
• Help negotiate settlements by quantifying risk associated with trial.

• Damages include front pay, back pay and other statutory damages.
• The federal definition of front pay is complicated.  Non-actuaries are unable to measure all of the future loss.
  1. Front  pay must factor in the normal likelihood that the individual wrongfully  terminated may have voluntarily quit or be terminated in the future for  valid market reasons.  This definition severely limits front pay.
  2. But  new employment with less seniority increases the likelihood of future  loss of employment.  This creates a different loss resulting from damage  to one's reputation, a separate loss. This loss is a contingent loss,  based in actuarial science.

• Retirement  and health benefit losses can be sizable because each can be  seniority-based.  The seniority-based portion is most of this loss and  is an often-overlooked component of back pay.  Measuring it requires  actuarial skill.

*  Listed in Best Experts in America® for Employment Law.  Mr. Reiss has  written two of the most important state bar journal articles on the  topic.  (For links for both  visit "Publications Link" section)

• Actuaries are specifically trained in the design and administration of retirement & health benefit plans.

• Licensed by Congress to measure benefit entitlement and to protect that entitlement by measuring proper funding requirements.

• Licensing requires understanding the legal requirements that must be met by employers 

Nearly all benefits fall into one of two categories: Retirement or Welfare Benefits.  

Retirement  benefits have requirements for an earnings and vesting definition.   That makes them compensation promised for service provided and the  employer is required by law to pay these benefits. Retirement benefits  are distinguised from Welfare Benefits on the basis of when they are  paid.  Depending on the plan in question retirement benefits are paid  only at retirement age or at termination of employment.

Welfare  benefits seldom contain any rights to future earned benefits.  Thus  your employer generally is free to terminate them at any time and is  only obligated to pay for losses you sustained when the benefit was in  effect.  The sole instance welfare benefits vest a property right is  when the employer failed to retain the right to terminate them in the  written plan, or when the written plan or individual contract with the  employer specifically provides such rights, or when management made  specific promises outside the written plan that these benefits would  continue in exchange for termination of employment or early retirement.    If the perks do not fit within the definition of a retirement benefit  it is very likely a welfare benefit.   Welfare benefits include life  insurance, health insurance, reimbursement of certain wages lost from  long and short-term disability, vacation pay and sick leave, legal  reimbursement plans and any other benefit that fits within the  parameters defined herein.  For more information, including your  remedies to disputed compensation or benefits, see topic tags at the  upper left hand corner of this page.  

• Actuaries typically work with top management designing these programs.

• Actuaries assist with measuring risk associated with defaults that typically accompany many merger/ acquisitions

• Actuaries assist executives with making decisions on new employment opportunities.

• Actuaries can aid management with making decisions on new products.  

Executive  compensation includes regular pay and bonuses and a wide variety of  promised benefits.  Executive pay is distinguised from regular pay on  the basis that nearly all of it is exempted from ERISA  enforcement  procedures and is enforceable under state contract law.  That means you  will not be able to enforce your rights without securing a competent  attorney and often you will have to sue your employer.  Mr. Reiss can  assist you by quantifying the amount of your damages or economic value  of  the promises and by providing expert witness  testimony support.

A key  service that Mr. Reiss can provide the management or executive employee  is the valuation of lost promised compensation for services already  rendered that occurs when changing jobs.  It doesn't matter whether it  falls within the scope of awarded stock options that have not fully  vested, earned retirement benefits which increase because of higher  salary, or termination benefits or other compen-sation triggered by a  covered contract provision, a very large portion of these benefits are  lost and are promised only if you remain with the current employer.    Whether it is a an executive retirement plan, stock option, or other  contractual benefit, Mr. Reiss can value the seniority-based   component  that accompanies all these benefits which will be lost even  if the new employer provides identical benefits.   It very often  respresent most of the value of the benefit.   This allows the executive  to compare fully the value of the old compensation package with the  value of the package that replaces it by factoring in the hidden cost of  leaving the current employer.