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Simple English definitions for legal terms
Employee Retirement Income Security Act
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A quick definition of Employee Retirement Income Security Act:
The Employee Retirement Income Security Act (ERISA) is a law that regulates private pension plans and employee benefit plans. It was created in 1974 to prevent fraud and mismanagement in employee pension funds, which had caused many workers to lose their retirement benefits. ERISA also applies to employer-provided health insurance, which is the main way that people in the United States pay for healthcare. The law helps protect workers' retirement benefits and healthcare coverage.
A more thorough explanation:
The Employee Retirement Income Security Act (ERISA) is a federal law that regulates private pension plans and employee benefit plans. It was established in 1974 to protect workers from fraud and mismanagement in their retirement funds.
ERISA applies to both pension plans and employee welfare benefit plans, which include employer-provided health insurance. The law sets standards for plan management, funding, and vesting, and establishes the Pension Benefit Guaranty Corporation to protect workers' retirement benefits.
For example, if a company offers a pension plan to its employees, ERISA requires the plan to be funded adequately and managed in the best interests of the workers. If the company goes bankrupt and cannot pay the pension benefits, the Pension Benefit Guaranty Corporation may step in to provide some level of protection for the workers.
Another example is an employer-provided health insurance plan. ERISA requires the plan to provide certain benefits and protections to employees, such as coverage for pre-existing conditions and the right to appeal denied claims.
Overall, ERISA is an important law that helps protect workers' retirement and health benefits.