What does ERISA stand for?

The correct answer, which defines ERISA, is the Employee Retirement Income Security Act. This federal law was enacted in 1974 to establish standards for pension and health plans in private industry. Its primary purpose is to protect the interests of employee benefit plan participants and their beneficiaries by outlining the minimum standards that plan administrators must follow.

ERISA sets forth requirements regarding the reporting and disclosure of plan information, as well as fiduciary responsibilities to ensure that plans are managed in the best interests of the participants. It also establishes participants’ rights to sue for benefits and breaches of fiduciary duty. The act does not cover all employee benefit plans, such as certain plans established under government or church programs, but it plays a critical role in regulating the private sector, meaning most workers’ pension and health plans are bound by its provisions. Understanding ERISA is essential for those involved in the life and disability insurance sectors, as it affects how plans are structured and managed.