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What is ERISA? Everything You Need to Know


ERISA stands for the Employee Retirement Income Security Act. It is a U.S. federal law that is very crucial to society because of its impact on the lives of employees. This law ensures that employees get their retirement benefits and all other types of benefits. In this article, we’ll reveal all you need to know about this important law and how it affects you.

Before we go into other relevant details, it is important to understand that you’ll need the services of the top ERISA insurance claim attorneys to secure your benefits. An experienced lawyer will help you file your claim and gather all the necessary evidence. This is an important aspect you must know if you want to get what’s due. With that said, let’s quickly discuss the origin of ERISA.

The FG introduced the ERISA in 1974 to establish minimum requirements for most retirement and health plans that employees participated in voluntarily. This law was formulated to protect the rights of employees. The mishandling of employees’ pension plans was the catalyst that gave rise to this law.

To ensure that this law was interpreted and enforced accordingly, several agencies were set up by the federal government. The main agencies are:

Employee Benefits Security Administration (EBSA)

Let’s review the functions and responsibilities of this agency.

Human hand inserting coin in piggybank
  • Ensures that the retirement plans maintain their integrity.
  • Protects the interests of participant individuals in these plans by ensuring that the participant’s information is properly disclosed.
  •  Ensures the responsible parties adhere to fiduciary requirements.
  • Guarantees the benefit rights of the participants.
  • Carries out investigations and enforces the protection of the benefits, health, and retirement of retirees, workers, and their relatives.

Pension Benefit Guaranty Corporation (PBGC)

Below are the functions and responsibilities of this agency:

  • Guarantees that the pension benefits will continue even if the participant terminates the plan.
  • Ensures that the plans in the private industry are well-defined.
  • Ensures the participants get their benefits.

These agencies have a close working relationship with the IRS (Internal Revenue Service). You can click on this link to learn what the mission of the IRS is. All these agencies ensure that ERISA is helping the lives of workers all across the country.


The main elements of this law focus on the retirement plans sponsored by employers and the benefit plans that employees can take advantage of. These retirement plans cover retirement accounts, health insurance, and other employee benefits.

These Are The Two Main Types Of Erisa Retirement Plans:

Defined Benefit Plans: Also known as pension plans, promise the participant a specific amount each month after they retire. The benefit is calculated using a formula that considers certain factors, which include the earning history of the employee, how long they have served, and their age. This plan ensures the employee has a steady income after retirement.

Defined Contribution Plans: This is where 401(k) belongs. You can read this article to learn what a 401(k) is. In this case, there is no specified amount, but the employer and employee (sometimes either one) will contribute to the individual account of the employee. The final benefit is determined by the accrued balance found in the account, which in turn is a result of the total contributions and investment performance over time. With this plan, the employee has more flexibility and control over the savings.

Apart from retirement, ERISA covers health benefits. Let’s say an employee suffers an injury that prevents them from working. Thanks to ERISA, they can file an ERISA disability claim and get benefits and compensation during that period of injury. Apart from injuries, this health plan provides medical, vision, dental, and other health benefits.