In 1974, the Employee Retirement Income Security Act became a federal law that set minimum standards for private industry retirement plans. These can include 401(k) plans, pension plans, profit-sharing plans, and stock bonus plans.
The main purpose of ERISA is to protect employees who invest in retirement plans that are offered by private industry employers.
To comply with ERISA, plan sponsors have to meet strict federal requirements on funding, accrual of benefits, communication with plan participants, transparency, reports submitted to the government, standards of conduct for plan managers and other fiduciaries, and more.
ERISA is extremely important, because—on a number of levels—it protects the interests of employees who participate in retirement plans and their beneficiaries. ERISA holds the fiduciaries of retirement savings plans to a high standard and requires them to act in the best interest of plan participants. ERISA also ensures that plan participants have access to information about their retirement plans. Within ERISA, there are provisions for enforcement to protect plan funds.
ERISA is primarily enforced by the U.S. Department of Labor (DOL) and the Pension Benefit Guaranty Corporation (PBGC) but the Internal Revenue Service (IRS) can also play a significant enforcement role through the duplication of many qualified plan requirements, under ERISA.
It's important to note that government employee pension plans, IRAs (individual retirement accounts), SEPs (simplified employee pensions), retirement plans that are set up and administered by churches, and certain other types of plans aren't covered by ERISA.
Income America™ 5ForLife can help savers meet their goals, as it offers guaranteed lifetime income within an ERISA retirement plan.
Income America 5ForLife is an in-plan guaranteed retirement income solution that offers income that will last as long as your retirement does.