Employee Retirement Income Security Act (ERISA)
Candlefocus EditorIn order to properly manage retirement funds, ERISA prohibits fiduciaries from use of funds for any purposes other than intended. It regulates the amount of money that can be invested in retirement plans and prevents fiduciaries from taking excessive fees and commissions. ERISA also guarantees that participants have certain rights in the event of mismanagement or breach of fiduciary duty. These rights allow plan participants to file a lawsuit in order to obtain any unpaid or lost benefits that they may be entitled to by law.
Besides retirement plans, ERISA also extends its regulations to healthcare plans. As plans can be extremely complicated and contain grandfathered provisions, employers must ensure that their healthcare plans meet the standards of ERISA. Under ERISA, employers must provide employees with an explanation of their health benefits to ensure that each participant knows the details of their plan and is aware of any changes in coverage.
ERISA has gone through a series of changes throughout the years in order to meet the changing needs of employers and participants. While it was initially created to protect retirement plans, it has since been modified to also protect healthcare costs and participants. With the help of ERISA, individuals can rest assured that their plans are being managed and their benefits are safe.