Frequently Asked ERISA Questions Part 1 ERISA law can be a particularly challenging area of law. Attorney J. Price McNamara can help you navigate the maze and find the most helpful answers to your questions. Here are some of the most frequently asked ERISA questions we receive. What does ERISA mean? ERISA is the Employee Retirement Income Security Act. Created in 1974, ERISA, protects the assets so that funds placed in retirement plans will remain there and stay protected years later when workers retire. ERISA is a federally created law that also sets regulations for retirement plans in the private sector. The majority of ERISA law provisions are designed to be effective for plan that begin in years on or after January 1, 1975. What can ERISA do for me? ERISA requires retirement and pension plans to provide their participants with information about the plans they are enrolled in including plan features and funding. Under the federal regulations, plans must furnish information regularly and automatically. The law also defines how long a person must work before becoming eligible to participate in a retirement plan. The law also provides funding rules that require that adequate funding be provided by your employer for your plan. ERISA gives retirement participants the right to sue plan administrators for benefits and breaches of any required fiduciary duties. What is a simplified employee retirement plan (SEP)? This is a retirement plan in where your employer makes contributions to an individual retirement account (IRA) owned by an employee. Certain tax benefits are given for enrollment and payment into such plans. What are defined benefit plans? These retirement plans are funded by your employer which allow a specific monthly benefit to be paid at retirement. Often, such plans calculate employee benefits through a formula that includes things like salary, age, and number of years employees have worked for a company. What are defined contribution plans? Defined contribution plans do not promise a specific benefit amount for employees at retirement. In such plans, the employer contributes money to individual accounts in a retirement plan and the worker is responsible for choosing how and where contributions are invested. Employer can then add to the account, or match contributions. At retirement, the employee will receive the balance in your account, reflecting the contributions, investment gains or losses, and any fees charged against your account.