The vast majority of people count on some type of savings plan to fund their retirements, but not everyone understands their benefits and, in some cases, even the type of plan they’re enrolled in. ERISA, or The Employee Retirement Income Security Act of 1974, set minimum standards for voluntary retirement plans and governs how most plans operate.
If you’re unsure of your plan’s features or benefits, now is the time to review that plan to better understand how it will benefit you both now and after retirement. If there are any questions, plan managers should be able to fully explain the included benefits, but it also pays to have a basic knowledge of ERISA to help you spot potential problems.
What’s the Benefit of ERISA for Enrollees?
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Although the majority of plans provide benefits as expected, there are times when things don’t go as planned. In cases where something appears to be amiss, plan participants are entitled to review all plan information and the various features included in the plan. Even if nothing in the plan is problematic, it’s always a good idea to periodically review the plan’s features and funding.
However, if any type of problem does occur with the plan’s funding, it’s important to remember that the managers have a fiduciary responsibility to protect the plan’s assets. When issues arise, plan participants have a right to sue to recover their benefits.
Are All Retirement Plans Covered by ERISA?
No. While most plans provided by private employers are covered, retirement plans set up by the government or religious entities are not covered. In addition, the retirement options commonly available for non-resident aliens established outside the United States are not covered.
Do Simplified Employee Pension Plans Enjoy Protection Under ERISA?
Unfortunately, Simplified Employee Pension plans (SEPs) do not share the protections provided by ERISA. These plans are quite common, especially with smaller companies, so it may make sense for employees to review their plans with a legal expert to ensure they conform with current regulations.
What Kinds of Information Can Employees Get About Their Plans?
Under ERISA, employees must have access to the minimum requirements for their plans. The plan must conform to the set standards for determining an employee’s eligibility to participate, vesting timeframes, and how thoroughly the plans are funded. Of course, there are numerous details included that employees should know and understand.
In the event, an employer or the plan managers are hesitant to reveal the status of a plan, consider consulting an attorney for legal advice. While there may not be any problems with the plan, there is no reason to deny a participant’s access to the relevant data.
What Happens if a Plan Cannot Deliver the Required Retirement Benefits?
As noted earlier, plan managers have a fiduciary responsibility to properly handle and protect the funds they’re entrusted with. That simply means that, if a plan fails to provide the benefits for retirees or for other included situations, those individuals have a right to seek damages.
If a plan is terminated, the members can generally expect to recover certain benefits through the Pension Benefit Guaranty Corporation, but that process may not fully protect the members’ investments. If there are problems with a plan, it’s important to obtain advice from these Erisa disability attorneys as soon as possible.
Employees are encouraged to remember that, as a rule, plans provide the benefits expected after specific events occur or a member retires. However, legal experts always suggest employees monitor their benefits programs to ensure nothing appears to be wrong and the managers are adequately protecting the employees’ investments.