What You Should Know About Your Retirement Plan, U.S. Department of Labor, November 2006
Employee Retirement Income Security Act of 1974
Known by the acronym ERISA, this federal law governs the operation of qualified plans. It establishes rules that qualified plans must follow to protect plan assets for participants.
It applies to most private employer and union sponsored retirement plans. Excluded are federal, state and local government plans and most church plans. Rules may also differ for plans negotiated under collective bargaining agreements.
Watch out for questions about how ERISA applies to traditional and Roth IRAs. It doesn't. Individual IRAs are not employer-sponsored plans, and therefore do not fall under ERISA. SIMPLE and SEP IRAs do.
ERISA does not require an employer to maintain a retirement plan, but if the employer does, ERISA specifies when an employee must be allowed to become a participant, how long they have to work before they have a non-forfeitable interest in their pension, how long a participant can be away from their job before it might affect their benefit, and whether their spouse has a right to part of their pension in the event of their death.
- Pension Benefit Guaranty Corporation (PBGC) - A federally chartered corporation created by ERISA that guarantees payment of pension benefits if a pension plan is terminated. The PBGC is funded by insurance premiums paid by the sponsors of employee retirement plans.
Maximum annual benefit guarantee - $59,318.16 for 2014 ($4,943.18 monthly).
B. Department of Labor
The U.S. Department of Labor is responsible for enforcing the provisions of ERISA. The Employee Benefits Security Administration (EBSA) is the Department of Labor arm that oversees ERISA provisions that govern the conduct of plan fiduciaries, the investment and protection of plan assets, the reporting and disclosure of plan information, and participants' rights and responsibilities.
Fiduciary Liability Issues
Financial AdvisorTraditional private pension funds are well regulated by the government through ERISA and the PBGC. Alternative investments are aiding portfolio returns.
Financial AdvisorFollowing a checklist can make achieving compliance with Employee Retirement Income Security Act of 1974 (ERISA) requirements much less burdensome.
InvestingSome companies are making it harder for employees to sue over retirement fund problems. Here is what you need to know about the trend.
RetirementSome retirement plans, including 403(b)s, are not covered by the DOL's new fiduciary rule. Here's what it means.
Financial AdvisorLearn about eligibility requirements, contributions and distribution rules for these retirement plans.
RetirementIs the new rule allowing participants to roll their 401(k) balances into pensions a good idea?
RetirementLearn five steps that'll put your retirement back into your own hands.
RetirementRetired Florida employees can choose a 401(k)-style investment plan or a traditional pension.
RetirementThe majority of Americans are not very confident about having enough for retirement.