What is the Employee Retirement Income Security Act (ERISA)?

The Employee Retirement Income Security Act (ERISA) is a federal law that regulates the management and operation of private pension, health, and other employee benefit plans in Washington. This law, passed in 1974 and amended since then, sets minimum standards for participation, vesting, funding, and benefits. ERISA sets out protections for those who are enrolled in retirement plans, such as those that include pensions, 401(k)s, and health and disability benefits. The goal of the law is to protect the retirement benefits that participants have earned, and make sure these benefits are available when needed. ERISA requires employers to provide a Summary Plan Description that outlines the plan, when and how participants can receive benefits, and what type of tax benefits are provided. Furthermore, it requires employers to transfer funds from a current employer’s plan to an individual’s retirement account if the individual leaves their place of employment. Employers are also obligated under ERISA to establish a fiduciary duty with their pension plans. This means that employers cannot act solely in their own interest with pension plans but instead must act in the best interest of their employees when making financial decisions regarding such plans. Overall, ERISA is an important law that sets out minimum standards and protections for employee retirement and health benefit plans. It is essential for employers to know and abide by this law’s provisions in order to provide the necessary protections for their employees.

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What is the Employee Retirement Income Security Act (ERISA)?

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