Employee Retirement Income Security Act definition and meaning
The Employment Retirement Security Act (ERISA) is a federal law that governs the operation of most private benefit and pension plans in the US. It sets minimum standards for most voluntarily established retirement and health plans in private industry, and it creates a set of fiduciary duties that require employers to ensure plans are administered fairly and in the best interest of employees.
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Signed into federal law by President Gerald Ford on Labor Day, September 2nd, 1974, ERISA established guidelines for the management of pension funds, fair treatment of plan holders, and how participants receive their plan information. ERISA is also responsible for the Pension Benefit Guaranty Corporation, a federally chartered corporation that guarantees payment of certain benefits to over 33 million Americans.
ERISA generally does not apply to plans established by the government or by a church. It also generally does not pertain to plans intended to comply with coverage requirements for workers’ compensation, unemployment or disability. ERISA also does not cover plans maintained outside the United States primarily for the benefit of nonresident aliens.
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