The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law. Lawmakers passed this law to provide oversite and protection of retirement and health plans for workers in the private sector.
- Who. According to the United States Department of Labor’s Employee Benefits Security Administration, the most recent data shows ERISA protected over 141 million workers and beneficiaries. This translates to 684,000 retirement plans and almost 5 million benefits plans.
- What. This federal law makes sure those who manage retirement and benefit plans do so with respect. It serves as a way to protect these plans from poor management, fraud, and abuse. One way this law achieves this goal is through required transparency. This means workers generally have the right to access information about their plans. This gives beneficiaries the ability to keep an eye on those who manage the accounts.
- How. As a federal law, it is enforced by federal agencies. These include the Employee Benefits Security Administration, Internal Revenue Service (IRS), and the Pension benefits Guaranty Corporation.
There are legal options for relief for those who believe that their retirement, health or disability insurance, defined benefit, life insurance or other plans were improperly managed. The right option will vary for each situation but can include back pay and restitution. Restitution may apply in situations where the plan gained interest by not paying the beneficiary. This can serve as an extra payment designed by law to better ensure fairness.
Two other options for relief are disgorgement and equitable estoppel. Disgorgement is another way to get repayment of funds while equitable estoppel is available for beneficiaries that rely on false information about their coverage. In most cases, for equitable estoppel to be an option the beneficiary will need to show that the representative was aware of the misrepresentation, the misrepresentation was made in writing and that it was reasonable to rely on this misrepresentation.
