Explain the role of the Employee Retirement Income Security Act (ERISA)
ERISA is an enactment that sets standards for pension plans including fiduciary conduct, information disclosure, plan taxation, and remedies for employees. ERISA imposes standards of conduct and responsibility upon pension fund fiduciaries. The Act also requires that pension plan administrators disclose relevant financial information to employees and the government. The Act sets certain minimum standards that pension plans must meet to qualify for preferential tax treatment, and it provides legal remedies to employees and their beneficiaries in the event of violations.
ERISA's main focus is on pension plans. The provisions of ERISA apply to employee benefit plans established by employers. The act recognizes two types of benefit plans: welfare plans and pension plans. It seeks to ensure that all employees covered by pension plans receive the benefits due to them under the plans. ERISA does not require an employer to provide a pension plan for its employees. However, if a pension plan is offered, ERISA sets the minimum standards and requirements that the pension plan must meet.?
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