Employee Retirement Income Security Act (ERISA)
The Employee Retirement Income Security Act of 1974, commonly known as “ERISA,” is the federal legislation that sets minimum standards for most voluntarily-established pension and health plans in private industry. ERISA provides protection for individuals in these plans. ERISA states that employers must provide employee participants with plan information such as the plan’s features and funding, the minimum standards for participation, vesting, benefit accrual, and funding.
ERISA typically doesn’t cover retirement plans established or maintained by governmental entities, churches for their employees, or plans maintained only to comply with workers’ compensation, unemployment, or disability laws. Also, ERISA doesn’t cover plans that are maintained outside the U.S. primarily for the benefit of non-resident aliens or unfunded excess benefit plans.
The law details fiduciary responsibilities for the managers of the plan assets. The Department of Labor advises that the use of discretion in administering and managing a plan or having control of the plan’s assets qualifies that individual as a fiduciary to the extent of his or her discretion or control. Fiduciary status is derived from an individual’s functions performed for the plan, rather than from the person’s title.
ERISA also requires plans to have a grievance and appeals process to allow participants to access the plan benefits. In addition, ERISA provides participants with the right to sue for benefits and for breach of fiduciary duty. Plus, if a defined benefit plan is terminated, federal law guarantees the payment of certain benefits through the federally chartered Pension Benefit Guaranty Corporation (PBGC).
Every ERISA plan must have certain important components, such as:
- A written plan that describes the benefit structure and that guides day-to-day operations;
- A trust fund to hold the plan’s assets, as applicable;
- A record keeping system to track the flow of money in and out of the retirement plan; and
- Documentation that gives plan information to the employees who are participating in the plan, as well as to the federal government.
Litigation can arise under ERISA when a company officer or a plan fiduciary mishandles pension funding or arbitrarily/capriciously administers the ERISA plan. Those administratively and operationally responsible for the retirement plans have a fiduciary duty to the employees, and if that fiduciary duty is breached, the individual can be held personally liable for any financial losses. The plan administrators also have a duty to fairly administer the plan and not to “play favorites” when administering the plan. The Deuterman Law Group works hard to assist those who have been injured by the improper actions of individuals who manage employee benefit plans.
ERISA is an extremely complicated area of the law. Our ERISA attorneys will examine both federal and state law remedies to fully represent your interests. In some instances, lawsuits will determine the issue of “complete preemption” to see what laws cover your claim, in which case the outcomes can be quite different. Our attorneys will advocate on your behalf and make certain that your claim has the best possible outcome.