ERISA: Protection for Employee Pension and Benefit Plans
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What Is ERISA?
ERISA is the acronym for The Employee Retirement Income Security Act and was enacted by the 93rd United States Congress on September 2, 1974. The congressional title is: An Act to provide for pension reform.
Who Oversees Employee Pension and Benefit Plans?
ERISA establishes minimum standards of vesting, funding, and fiduciary relationships and a system of compulsory benefit insurance to protect the security of pension rights. Specifically, ERISA protects pension and benefit plan recipients and beneficiaries.
What Types of Benefits Plans Are Included in ERISA?
ERISA defines three main types of benefits plans:
- Employee benefit plans: benefit plans that are voluntarily established and managed by an employer, an employee organization, or both.
- Pension plans: are benefit plans established to provide employees with retirement income, or income after termination of employment.
- Welfare plans: employee benefits plans designed to provide employees with benefits covering issues such as health, death, disability, vacation, legal help, day care, scholarships, training, and other benefits of this nature.
Plans Not Included
ERISA specifically does not cover employment plans:
- established by churches
- established by the government.
- for employees working outside the United States (non-citizens).
What Protections Does ERISA Provide?
There are three main protections provided by ERISA:
- Eligibility Guidelines: an employee aged 21 or over who has worked at least 12 months for the employer must be offered access to any pension or benefit plan in place.
- Management of Funds: an employer is liable and subject to prosecution for mismanagement of benefit funds
- Wrongful Termination: an employee cannot be fired to prevent eligibility for benefit plans.
How Is Compliance Monitored?
ERISA compliance is monitored through a series of reporting requirements. Failure to comply is a violation subject to civil liability and criminal penalties
How Is Compliance Encouraged?
Companies that comply with ERISA are offered tax breaks and incentives which encourage employers to follow ERISA guidelines. Failure to comply will result in loss of favorable tax treatment.
How Can an Employment Lawyer Help?
If you believe your employer has acted improperly with regard to your benefits or pension, a benefits attorney specializing in ERISA can help you resolve the dispute and make sure you receive the benefits you are entitled to. If you are an employer and are concerned about ERISA compliance, a benefits attorney can help you establish a benefit plan that protects you and your employees.
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Last Modified: 07-16-2014 04:42 PM PDT
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