The Employee Retirement Income Security Act (ERISA) is an important protection for workers’ retirement and pensions. For that reason, workers should be familiar with how ERISA works.
How can ERISA help protect a worker’s pension or retirement?
ERISA provides insurance companies, private employers and pension managers with guidelines for administering employee benefits plans, including pensions and retirement accounts. ERISA does not require employers to maintain pension plans, however, it does provide minimum standards for employers and companies that maintain a pension plan.
Under ERISA, employees receive a greater amount of information about their pension plan. According to the Act, employees have to be notified of any significant changes to their pension plan and also provides information to employees concerning how they can make a claim for benefits. ERISA also requires employers to advise employees or what standards they must meet in order for their benefits to vest. Information must be provided in writing and upon request from an employee.
ERISA prevents wrongdoings by plan fiduciaries
ERISA also provides important protections from wrongdoing by plan fiduciaries. Pension plan administrators can include plan administrators and plan trustees. Fiduciaries are required to work solely for the best interests and benefit of plan participants. They must refrain from excessive risk when investing the retirement plan funds of employees. A fiduciary may be personally liable for a large loss to the retirement plan.
Protecting pensions and retirement account for workers is essential for employees who work hard every day and rely on their retirement for the future. ERISA protections are critical for workers to be familiar with to ensure their future is protected and preserved.