An interested party is a person who may benefit from the outcome of a legal action or retirement plan, with the aim of protecting all parties involved. This includes defendants, plaintiffs, service providers, and those associated with retirement plans. The Employee Retirement Income Security Act (ERISA) establishes and identifies party interests for retirement plans, with certain rights and restrictions.
In the broadest application, an interested party is a natural or legal person who may benefit from the outcome of some type of legal action, such as a bankruptcy or lawsuit. The term is also used to identify the individual associated with a retirement plan who is prohibited by government regulations from entering into specific types of transactions that are related to that plan. In both applications, the idea is to protect the interests of all parties involved, without allowing one or more parties to take advantage of others involved in the lawsuit or plan.
In terms of legal situations, an interested party would be both the defendant and the plaintiff in the case, along with any service providers that might have a business relationship with either party. Depending on the exact situation, the affected party is granted certain rights or protections under the law, as well as being somewhat restricted from transacting with other parties involved in the action. For example, in a bankruptcy hearing, a creditor would be recognized as an interested party and would have the opportunity to present data that would be considered before the court, effectively protecting that creditor’s interests.
In connection with the ongoing operation of an employee retirement plan, the employer, including company directors and officers, are all considered interested parties. In addition, the plan trustee, employees enrolled in the plan, and any employee organization in which all or any portion of the membership is enrolled in the plan, would also be considered an interested party. Lawyers who have an ongoing business relationship with the employer are also sometimes considered parties of interest.
In the United States, the Employee Retirement Income Security Act, known as ERISA, provides the basis for establishing and identifying a party interest in relation to various retirement plans. Any individual or entity identified as a party of interest under the terms of ERISA has certain rights associated with the plan, but is also prohibited from taking specific actions in connection with the plan. Along with the employer and employees, a share interest can be any investor who owns more than fifty percent of the employer’s organization. Depending on the structure of the plan and the individual’s relationship with an employee organization, the employee’s spouse, children, or spouse of a child may also be considered a party interest.
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