Employee Retirement Income Security Act (ERISA)

Introduction

The Employee Retirement Income Security Act of 1974 (ERISA) is the primary federal law governing employer-sponsored retirement plans, health plans, and other employee benefit plans in the United States.

Coverage

ERISA applies to pension plans, 401(k) plans, health plans, disability plans, and other welfare benefit plans maintained by private employers. Government plans and church plans are generally exempt.

Fiduciary Duties

Plan fiduciaries must act prudently, diversify investments, follow plan documents, and act solely in the interest of plan participants. Breach of fiduciary duty may result in personal liability.

Reporting and Disclosure

ERISA requires plan administrators to provide participants with summary plan descriptions, annual reports (Form 5500), and notices of plan changes. The Department of Labor enforces compliance.

Vesting and Participation

ERISA establishes minimum standards for plan participation, benefit accrual, and vesting. Plans must provide participants with accrued benefits after specified periods of service.