Employee Retirement Income Security Act

Background

Congress passed the Employee Retirement Income Security Act The Employee Retirement Income Security Act sets minimum standards for pension and welfare plans in the private sector and requires private employers to meet these standards for their plans to be eligible for tax-favored status. of 1974 ( ERISA The Employee Retirement Income Security Act sets minimum standards for pension and welfare plans in the private sector and requires private employers to meet these standards for their plans to be eligible for tax-favored status. ) to provide protections for individuals in private retirement and health insurance plans. ERISA The Employee Retirement Income Security Act sets minimum standards for pension and welfare plans in the private sector and requires private employers to meet these standards for their plans to be eligible for tax-favored status. includes standards concerning fiduciary duties, the provision of plan information, grievance and appeals procedures, and rights to pursue legal remedies. In addition, ERISA The Employee Retirement Income Security Act sets minimum standards for pension and welfare plans in the private sector and requires private employers to meet these standards for their plans to be eligible for tax-favored status. addresses plan participation, vesting, benefit accrual, and funding. Finally, ERISA The Employee Retirement Income Security Act sets minimum standards for pension and welfare plans in the private sector and requires private employers to meet these standards for their plans to be eligible for tax-favored status. established the Pension Benefit Guaranty Corporation to ensure benefit payments in the case of plan termination.

Judicial interpretations of ERISA The Employee Retirement Income Security Act sets minimum standards for pension and welfare plans in the private sector and requires private employers to meet these standards for their plans to be eligible for tax-favored status. provisions over the years have limited the substantive rights of retirement plan participants and beneficiaries. Even when participants and beneficiaries can prove ERISA The Employee Retirement Income Security Act sets minimum standards for pension and welfare plans in the private sector and requires private employers to meet these standards for their plans to be eligible for tax-favored status. violations, courts have severely limited the remedies available, thus undermining participants’ and beneficiaries’ rights.

ERISA The Employee Retirement Income Security Act sets minimum standards for pension and welfare plans in the private sector and requires private employers to meet these standards for their plans to be eligible for tax-favored status. was generally designed to be the applicable law governing employer-sponsored benefit programs. ERISA The Employee Retirement Income Security Act sets minimum standards for pension and welfare plans in the private sector and requires private employers to meet these standards for their plans to be eligible for tax-favored status. thus preempts state laws in order to provide uniformity. In a number of areas, however, courts have interpreted ERISA The Employee Retirement Income Security Act sets minimum standards for pension and welfare plans in the private sector and requires private employers to meet these standards for their plans to be eligible for tax-favored status. to deny individuals the protections and benefits of state laws, even when ERISA The Employee Retirement Income Security Act sets minimum standards for pension and welfare plans in the private sector and requires private employers to meet these standards for their plans to be eligible for tax-favored status. provides no adequate protection. For example, courts have held that ERISA The Employee Retirement Income Security Act sets minimum standards for pension and welfare plans in the private sector and requires private employers to meet these standards for their plans to be eligible for tax-favored status. preempts actions against nonfiduciary violations and preempts state laws against fraud and misrepresentation. The result of preemption in these circumstances is to leave plan participants without a remedy.

EMPLOYEE RETIREMENT INCOME SECURITY ACT: Policy

Strengthening interpretation and enforcement

In this policy: Federal

The Employee Retirement Income Security Act The Employee Retirement Income Security Act sets minimum standards for pension and welfare plans in the private sector and requires private employers to meet these standards for their plans to be eligible for tax-favored status. ( ERISA The Employee Retirement Income Security Act sets minimum standards for pension and welfare plans in the private sector and requires private employers to meet these standards for their plans to be eligible for tax-favored status. ) should be interpreted and implemented to give participants and beneficiaries full legal protections.

The Department of Labor (DOL) should strengthen enforcement under ERISA The Employee Retirement Income Security Act sets minimum standards for pension and welfare plans in the private sector and requires private employers to meet these standards for their plans to be eligible for tax-favored status. . This may require better and more productive use of resources, additional funds, strengthened audit procedures, and regulatory actions that assist participants and beneficiaries in securing their benefits and protecting their rights.

Public education and information

In this policy: Federal

The DOL and other agencies should improve their efforts to educate plan members about their rights under the plan through the publication of easy-to-understand, culturally and linguistically appropriate pamphlets; public service announcements; and other educational efforts.

Reporting and disclosure

In this policy: Federal

Comprehensive reporting and disclosure requirements must be maintained and enforced. Mandated disclosures, reports, and notices should be provided to participants and beneficiaries in a form that comports with their preferences, is private and secure, adequately conveys important information about retirement plan rights, promotes actual receipt of benefits, and is preserved and accessible decades later. Policymakers should consider setting mandatory penalties for failure to provide required information on plan finances to plan participants.

Judicial proceedings

In this policy: Federal

Remedies under ERISA The Employee Retirement Income Security Act sets minimum standards for pension and welfare plans in the private sector and requires private employers to meet these standards for their plans to be eligible for tax-favored status. should be improved so employees can recover all losses due to ERISA The Employee Retirement Income Security Act sets minimum standards for pension and welfare plans in the private sector and requires private employers to meet these standards for their plans to be eligible for tax-favored status. violations.

Congress should enhance private rights of action under ERISA The Employee Retirement Income Security Act sets minimum standards for pension and welfare plans in the private sector and requires private employers to meet these standards for their plans to be eligible for tax-favored status. to supplement the DOL’s limited ability to monitor the benefits system. ERISA The Employee Retirement Income Security Act sets minimum standards for pension and welfare plans in the private sector and requires private employers to meet these standards for their plans to be eligible for tax-favored status. should be amended to require the award of mandatory attorney’s fees in successful fiduciary and benefits claim cases, and to allow all courts to award attorney’s fees for work performed during the administrative review process. A court reviewing a disputed ERISA The Employee Retirement Income Security Act sets minimum standards for pension and welfare plans in the private sector and requires private employers to meet these standards for their plans to be eligible for tax-favored status. case should examine the relevant contracts and documents for itself (that is, review the case de novo) and not defer to the findings of the plan administrator, who may have an inherent financial conflict of interest.

The DOL should explore alternative dispute resolution forums for those claimants who otherwise would lack adequate remedies.

ERISA preemption

In this policy: Federal

Where ERISA The Employee Retirement Income Security Act sets minimum standards for pension and welfare plans in the private sector and requires private employers to meet these standards for their plans to be eligible for tax-favored status. preempts state law and deprives individuals of rights and remedies available under state law, ERISA The Employee Retirement Income Security Act sets minimum standards for pension and welfare plans in the private sector and requires private employers to meet these standards for their plans to be eligible for tax-favored status. should provide an adequate federal remedy.