Understanding the Purpose of ERISA


The purpose of the Employee Retirement Income Security Act (ERISA) is to protect workers concerning their retirement savings. ERISA was initially passed in 1974 and amended several times since then. This article is here to inform you about the purpose of ERISA and how it can affect your life. If you have questions about how ERISA might affect your life, please read on.

What Is ERISA?

The Employee Retirement Income Security Act of 1974 (ERISA) is a United States federal law that establishes uniform standards to protect employees from abuse by their employers if they are provided with retirement benefits from an employer-sponsored plan. It was enacted as an amendment to the Internal Revenue Code, and it applies broadly to all private-sector employers who offer a pension, insurance, or other employee benefit plans.

So, if your employer offers a retirement plan, there is probably some aspect of ERISA that affects you. You will need an ERISA appeal letter if you are denied benefits or coverage under an employer-sponsored plan due to a mistake in the enrollment process. The letter should be carefully written and be clear, concise, and to the point.

How Does ERISA Work?

ERISA sets minimum standards for employee benefit plans enforced by the Department of Labor. The law requires plan administrators to act in the best interests of plan participants and their beneficiaries and imposes fiduciary duties on those who manage or control employee benefit plans. ERISA also creates several enforcement mechanisms to ensure employers comply with its provisions.

In addition, ERISA requires that employers provide plan participants with information about an employee benefit plan’s funding and operations and upon request by a participant or beneficiary of the benefits. With an appeal letter, you can request a review of decisions made by the plan administrator that have adversely affected your rights.

ERISA and Retirement Plans

ERISA is most commonly thought of concerning retirement plans, such as pensions and 401(k)s. The law sets minimum standards for the design and operation of these plans, including requirements for funding and disclosure. ERISA also establishes rules for the distribution of plan assets upon a participant’s death or termination of employment.

If you participate in an ERISA-covered retirement plan, it is essential to understand how the law affects your rights. For example, if your employer decides to freeze or terminate your plan, you may be able to collect benefits owed to you under ERISA. If you have been denied a benefit or coverage under your retirement plan, you may be able to file an appeal.

ERISA and Healthcare Plans

While ERISA is most commonly associated with retirement plans, the law also applies to healthcare plans. These plans are often called “ERISA health plans.” An ERISA health plan is a group health plan that meets certain requirements imposed by ERISA.

An essential requirement is that an ERISA health plan must be maintained by an employer who has at least 20 employees. If an ERISA-covered health plan covers you, it is essential to understand your rights under the law and how they may affect your healthcare coverage.


ERISA is a fundamental law that affects the rights of employees about their retirement plans and health coverage. If you have any questions about how ERISA might affect your life, please consult with an attorney who specializes in ERISA law. This ensures that you are fully aware of your rights under the law.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.