ERISA: Fiduciary and Disclosure Duties
Author: José M. Jara, Buck Consultants
The Employee Retirement Income Security Act of 1974 (ERISA) was created to protect private retirement and welfare plans. It requires employers that sponsor plans to meet fiduciary, reporting and disclosure requirements, and also sets minimum standards for participation, vesting, benefit accruals and funding. Due diligence to ensure compliance with ERISA should be a priority for employers. The number of ERISA cases filed in the federal courts has grown, and the Department of Labor (DOL), which oversees ERISA's fiduciary, reporting and disclosure provisions, has significantly increased its enforcement activities.
This Legal Insight focuses on a plan sponsor's fiduciary and disclosure responsibilities under ERISA and explains how to navigate current DOL regulations and enforcement activities.
The Genesis of ERISA
Today, we remember the subprime mortgage crisis, the Madoff scandal and the Enron debacle. But over 50 years ago, the big story was the shutdown of the Studebaker plant in South Bend, Indiana. Studebaker, an automaker employing thousands of employees, ran into financial trouble and went bankrupt in 1963. As a result, Studebaker employees were left without a pension. This inspired the lobbying effort that led to the ERISA statute protecting pension and other benefit plans, which was signed into law by President Gerald Ford on September 4, 1974.