Understanding ERISA Protections

The Employee Retirement Income Security Act (ERISA) of 1974 is a law that decides the minimum standards to which voluntary established pension plans (along with private industries’ health plans) give protection to those enrolled in these plans. They are tasked with regulating the finance, administration and vesting regulations of pension plans for workers who are in the private industries and businesses. These statutory requirements that rule over the pensions of employees upon retirement are the main reason why the law was passed and designed to preserve and protect the employees’ right to their pensions.

One thing an employee must understand that ERISA does not necessitate each employer to have a pension plan, rather those companies who choose to have them must meet with certain minimum standards. It does not legally state the amount of benefit that every pensioner should receive, and establish comprehensive funding rules which gives obligation to the plan sponsors to have enough finding for the plan. Those who wish to avail of the pension plan must meet the needed length of years work before being eligible for the plan. They have to accumulate benefits and have a non-forfeitable right for the benefits. In cases of breaches of fiduciary duty and bad faith litigation, the ERISA gives the pensioner the right to sue so that they can have their pensions.

There has been many amendments to the ERISA in the past years, among them is Consolidated Omnibus Budget Reconciliation Act (COBRA) which gives the employees and their families the right to continue the health coverage for a certain amount of time due to significant event (such as losing a job), and the Health Insurance Portability and Accountability Act (HIPAA) that covers vital and new protections to employees (and their families) suffering from a pre-existing medical condition or could suffer discrimination on their health coverage brought about by the person’s health.

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