Employee Benefits
The Employee Retirement Income Security Act ("ERISA") was signed in 1974 to insure the protection
and enhancement of the delivery of pension and welfare benefits promised to employees. ERISA does
not require employers to provide pensions or welfare plans, and employers have wide latitude in how
plans are structured and what benefits they provide. But if such plans are provided, they must meet the
standards set by ERISA. Much of ERISA is devoted to regulatory requirements such as reporting to the
government and disclosures to participants, but the Act also provides ready access to the federal courts to
enforce its standards and fashion remedies. ERISA is a federal law, and preempts most state laws
governing benefit plan provisions and practices.
ERISA imposes strong fiduciary duties on those entrusted with control of plan assets including exclusive
loyalty to plan participants and beneficiaries, and the duty to act diligently and prudently with plan
assets. The Act establishes the U.S. Department of Labor as the agency responsible for ensuring
compliance and the DOL has broad regulatory authority in the administration of ERISA. The DOL also
has authority to take complaints from plan participants and beneficiaries and may bring civil actions
against fiduciaries, enforce reporting requirements and levy penalties for improper administrative
actions.
Individuals may also bring suit against plan fiduciaries and administrators but must generally first
exhaust administrative appeals before taking the case to court. Individuals often sue for denial of
benefits, discrimination in administration of benefits, or for breach of fiduciary duties. Damages
include granting of the denied benefit, monetary and injunctive relief, removal of the fiduciary and
attorney's fees and costs.
ERISA does not cover all employee benefit plans. It does not apply to benefit plans established by the
federal or state or local governments, by churches, to plans for foreign workers, insurance regulations,
or to workers' compensation, unemployment compensation or state disability insurance. It also excludes
certain excess benefit plans for highly compensated individuals that are exempt from the tax advantages
of pension plans.
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