In 1974, the Employee Retirement Income Security Act was passed to help protect employee retirement assets in New Jersey and all other states. ERISA doesn’t cover all retirement programs. Instead, there are specific programs that workers must have to receive the coverage benefits offered by ERISA.
A quick look at various retirement plans
There are different types of retirement plans that you may have. Some of the most common are IRAs, state employee pension plans and corporate-defined benefit plans. ERISA covers most employer-sponsored retirement plans. If you have a 401(k) that is an employer-sponsored plan, then you’re likely covered by ERISA. Some of the most common employer-sponsored plans include deferred compensation plans, profit-sharing plans and pensions.
What isn’t covered?
ERISA does not cover individual retirement accounts, so an IRA that is not employer-sponsored is not covered under this act. Also exempt from this act are public employee plans such as state pension plans and any retirement plan set up by a church. A lawyer who handles ERISA may assist you in determining whether or not your retirement plan is covered.
Plans must meet minimum ERISA requirements
For your retirement plan to be covered under ERISA, it must meet the minimum federal requirements described by ERISA legislation. These minimum requirements include things like an accrual of benefits, participation, funding and vesting. The Department of Labor’s Employee Benefits Security Administration currently oversees ERISA. Your retirement plan administrator should be able to tell you whether or not your retirement plan qualifies for ERISA.
Planning for retirement is something that all employees should do. Since many employers offer retirement plans, most employees have retirement plans that are covered under ERISA. However, is it a good idea to talk with your plan administrator or an attorney to verify that your current retirement plan is covered.