Employer Duties under ERISA
The Employee Retirement Income Security Act (ERISA) sets uniform standards for administering employee benefits for employers who choose to offer benefit plans to their workers. ERISA does not require employers to provide these benefits. The benefit plans covered by the Act include pension plans and welfare plans, such as retirement accounts, health insurance, disability, death benefits, paid time off, paid training time and prepaid legal services, among others.
The purpose of ERISA is to ensure that employers provide the benefits they promise to employees. ERISA is regulated by the Internal Revenue Service (IRS) and the Department of Labor's Employee Benefits Security Administration (EBSA).
Under ERISA, employers owe fiduciary duties to employees and must disclose certain information about the financials of their benefit plans to employees and the federal government. Some of these duties include:
- Managing benefits plans for the exclusive benefit of employees and their beneficiaries
- Carrying out employer duties prudently and refraining from self-dealing and conflict of interest transactions
- Funding the benefit plans in accordance with the law, including following the limits on how the plans may be invested
- Meeting reporting and disclosure requirements concerning the operations and financial condition of the benefit plans to the correct government bodies and the employee participants in the plan
- Providing required documentation as requested by the government to ensure legal compliance
If employers are unsure of how to carry out or interpret an ERISA requirement, they may seek an advisory opinion from the EBSA's Office of Regulations and Interpretations. The request must include:
- The name and type of benefit plan(s)
- The Employer Identification Number (EIN) and the Plan Number (PN) (or Form EBS-1 or a copy of the first two pages of the most recently filed EBS-1 Form)
- A description of all of the material facts for which the opinion is requested
- Copies of any documents mentioned in the description must be attached, as well as an explanation of the importance of the documents to the issue at hand
- Discussion of the issue(s) faced by the employer due to the acts or transactions for which the employer requests the opinion
Advisory opinions are only issued on proposed actions or transactions. They are not given for hypothetical situations. The employer must provide sufficient and complete information in the request. There are certain types of requests the Office of Regulations and Interpretations will not issue opinions on, such as whether a certain valuation of an asset is for current value or whether something qualifies as adequate consideration.
For more information on employer duties under ERISA, advisory opinions or reporting requirements, contact an employment attorney experienced in ERISA today.
How Employment Law Attorneys Can Help Employers
To read and print out a copy of the checklist, please follow link below.
How Employment Law Attorneys Can Help Employers
You can download a free copy of Adobe Acrobat Reader here
Copyright © 2008 FindLaw, a Thomson Reuters business
DISCLAIMER: This site and any information contained herein are intended for informational purposes only and should not be construed as legal advice. Seek competent counsel for advice on any legal matter.
