What is the Employment Retirement Income Security Act (ERISA)?
The Employment Retirement Income Security Act (ERISA) is a federal law that sets minimum standards that private industry must comply with when providing voluntary pension and health plans to individuals enrolled in these plans. The law requires that an employer regularly provide employees with all necessary information about plan features and funding, work requirements for participation, vesting, funding management, and benefit accruals. Additional protections include a participant’s ability to sue for benefits if necessary and for breaches of fiduciary responsibility. In the event a defined benefit plan is terminated, participants are guaranteed certain benefit payments.
Providers of plans have fiduciary accountability requirements and must comply with all necessary provisions, which include funding guidelines to ensure adequate funding for the plan.