The Employee Retirement Income Security Act (ERISA) was passed to protect retirement savings for New Jersey and the nation’s employees. The act illustrates guidelines for employers’ management and distribution of retirement funds. ERISA covers most employee retirement plans with some exceptions. The plan is in place to protect employees against company bankruptcies, mismanagement or abuse.
ERISA was enacted in 1974 and has evolved to meet the changing needs of workers and employers. ERISA ensures accountability and transparency from its managers. Employers must routinely certify their fiduciary obligations. ERISA laws also apply to short and long-term public and private disability insurance plans.
ERISA governed disability plans
ERISA governs corporate disability plans such as 401k savings, pension, deferred compensation and profit-sharing. ERISA doesn’t control government retirement plans or individual retirement plans like IRAs. Employees must receive timely updates regarding the status of each ERISA plan, and any plan changes must accompany advanced notice.
Each year millions of Americans become disabled and no longer able to work (before retirement age) due to illness or injury. These workers rely on disability payments for all or part of their income. Many employers will attempt to deny disability claims, and ERISA ensures that legitimate claims are enforced. Your denied claim can be appealed under ERISA.
ERISA disability plan benefits
Since ERISA manages most disability plans except government and individual ones, you can be confident in the benefits your plan includes, such as:
• Hospital, surgical and medical benefits
• Accident, sickness, disability or death
• Daycare, employment training, unemployment benefits
ERISA protection covers many benefits to protect workers if they cannot work for an extended period due to disability. Familiarizing yourself with ERISA disability guidelines is the simplest way to know what your coverage entails. Self-employed or partnerships are not likely to be covered by ERISA.