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

The Employee Retirement Income Security Act (ERISA) is a federal law that governs employee benefits in Washington and the rest of the United States. ERISA regulates the administration of all employee benefit plans to ensure that plan administrators provide adequate protection for worker’s retirement and health benefits. ERISA sets forth standards for who is eligible for benefits and how plans must operate. ERISA also dictates the circumstances in which employers are required to provide notice and disclosure of information to workers. For example, employers are required to provide workers with a summary plan description (SPD) outlining the guideline of employee benefit plans. This SPD must include information such as the date the plan was adopted, how benefits are vested, how long it takes for benefits to become fully vested, and how benefits may be paid out. In addition, employers must provide workers with a Summary of Material Modifications (SMM) that discloses any changes or revisions to the benefits they offer. Additionally, ERISA requires employers to provide financial statements and an annual report to plan participants and the U.S. Department of Labor. This report must describe the plan and the overall financial condition of the plan, including the amount of funds held, the types of investments made, and any transactions made by the plan fiduciary. ERISA also sets rules and regulations for the termination of employee benefit plans, ensuring that plan participants receive their rightful benefits.

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

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