Small Business Knowledge: What is ERISA?

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What is ERISA?

ERISA stands for the Employee Retirement Income Security Act of 1974, and is enforced by the Department of Labor’s Employee Benefits Security Administration. It is a federal law that sets minimum standards for pension plans in the private sector.

As a Business Owner, Why Should I Care About ERISA?

While ERISA does not require any employer to establish a pension plan, it does require those that do to meet certain minimum standards including:

  • Providing participants with information about plan features and funding
  • Establishing minimum standards for participation, benefit accrual, and funding
  • Accountability of plan fiduciaries (trustees)

Is your company in compliance? You should be. In addition to penalties business owners may face for violating compliance, ERISA also gives participants the right to sue for benefits and breaches of fiduciary duty. But, before compliance issues scare you aware from offering attractive benefits that will help your employees (and future employees) set aside money for retirement, contact a professional. Compliance is sometimes scary, but it doesn’t need to be.

A Happy Medium?

For businesses engaged in a PEO relationship, expert help with risk management and compliance protects the client from costly fines and lawsuits. PEOs also assume much of a business’s risk through the co-employment relationship.

For businesses that are not engaged in a PEO relationship, Employer Solutions Plus provides benefits and human resource management services such as wage and hour compliance, ERISA, FMLA, COBRA, HIPAA and ADA options. As it relates to pension plans, we provide business owners with all the necessary information they need to make better employee benefits decisions, and most importantly, stay in compliance.

To learn more about PEO options, or employee pension plans and ERISA compliance, contact us today.