What is ERISA?

You have a lot to consider when you’re making retirement plans, and much of it needs to start well before you’re ready to clock out on your last day. To make the most of your golden years, you need to begin saving for retirement while you’re still working. Employer-run retirement benefit plans can be a great way to build up some of that nest egg. Understanding the rules that govern how your employer handles retirement benefit plans can help you stay on the correct path and keep you informed of your options.

That’s where the Employee Retirement Income Security Act of 1974 (ERISA) comes in to support you. But what is ERISA, exactly?

ERISA requires your employer to keep you informed about your retirement benefits so you can monitor your benefits before you need to use them. Most private employers have to follow the federal ERISA guidelines when creating and managing your retirement benefit plans. ERISA also created the Employee Benefits Security Administration. This federal government agency helps employees handle issues with their retirement benefit plans. If employers do not follow the ERISA rules, they answer to the federal government.

What Does ERISA Cover?

The laws outlined in the Employee Retirement Income Security Act govern how your employer can run defined-contribution employee retirement benefit plans. These are among the most common employee retirement benefit plans in the U.S.; employees contribute a certain amount of each paycheck into their private retirement fund, like a 401(k) or a 403(b). Their employer will “match” a certain amount or percentage of those contributions with their funds.

ERISA exists to protect employee retirement benefit plans. The act requires employers to share plan information with employees. This helps them make informed decisions about if and how they want to contribute to a retirement plan. Employers must submit plan information to the federal government for oversight. They typically owe a specific level of duty and care to their employees’ plan assets.

Under ERISA, employers must periodically send individual statements to enrolled employees that show their investments’ value. Employees may also request more information outside of the regularly-scheduled pension benefit statements, like information about how much money they’ve accrued so far.

What Happens If My Employer Breaks ERISA Laws?

One of the most critical aspects of the Employee Retirement Income Security Act is the legal recourse to protect benefit plans if an employer breaks the rules. There are times when an employer may legally terminate an employee’s retirement plan, like if the business is going through a bankruptcy. But, under ERISA, the company still owes the employees the money they’ve collected to that point.

If an employer breaches their financial duty to their employees, ERISA includes grievance and appeals processes with the federal government to receive the benefits of their plans. The employee coordinates with the Employee Benefits Security Administration to file complaints and hold their employer accountable. If all else fails, ERISA allows employees to file lawsuits against their employers so they can try to remedy any financial damages.

If you believe your employer mishandles retirement funds, or they fail to provide you with the ERISA-required insight into your account, you can contact the Employee Benefits Security Administration or the Department of Justice for assistance.

Can Anyone Help Me Navigate ERISA Rules?

If the situation becomes severe enough, you may need to consider working with an ERISA attorney. Dealing with federal government agencies can be intimidating. An experienced ERISA lawyer familiar with the ins and outs of these rules can help you identify any violations of the laws. They can also determine what kind of remedy you’re owed and, if necessary, represent you in an ERISA lawsuit against your employers to help you fight for what is yours.