ERISA at 40: What does it do for American workers?
The Employee Retirement Income Security Act of 1974 has just reached its 40th anniversary. President Gerald Ford signed it into law on Sept. 2 of that year. Many Americans have seen the term “ERISA” on various employee forms and other documents. However, few know exactly what it does for them.
ERISA provides protections to workers who have benefit plans through their employers in various ways. It mandates standards for plan managers and requires these sponsors to provide information on the plans to participants as well as their beneficiaries. It also protects them if the employer providing the plan goes bankrupt.
The protections provided by ERISA are crucial to all of us who rely on our retirement savings to help support us and our families in our senior years when we no longer can or want to work. It protects this savings from abuse and mismanagement and requires accountability and transparency by plan sponsors.
ERISA protects more than retirement savings. It also protects health benefits and welfare benefit plans that are provided by employers. Over half of American employees receive health and other benefits from their employer. According to the U.S. Department of Labor, these “employee welfare benefit plans” include vacation and unemployment benefits, day care centers, training and apprenticeship programs and scholarship funds.
The DOL’s Employee Benefits Security Administration is one of the agencies responsible for administering as well as enforcing ERISA. The Internal Revenue Service and the Pension Benefit Guaranty Corporation share in those responsibilities.
ERISA has been amended several times over the past 40 years as the needs of employees and their families have changed. In Fiscal Year 2013, it covered over 140 million employees and their beneficiaries. This included 2.4 million health plans, another 2.4 million welfare benefit plans, and 684,000 retirement plans. Assets covered by ERISA totaled more than $7.6 trillion.
Anyone who has problems getting the benefits they are owed under ERISA can and should seek legal guidance from attorneys experienced in dealing with employee benefits.
Source: The United States Department of Labor, “What is ERISA” Sep. 24, 2014