Employee Retirement Income Security Act (ERISA)
What is the Employee Retirement Income Security Act?The Employee Retirement Income Security Act is a federal law that was enacted in September of 1974. This Act was established in the most minimum plan that industries in the private sector may provide, while also laying out an extensive set of rules on the effects of federal income tax on those transactions that can be associated with benefit plans for employees. The division of the responsibility of enforcement and interpretation was made among the Department of the Treasury, Pension Benefit Guaranty Corporation, and the Department of Labor. Read below where many questions have been answered by the Experts about the Employee Retirement Income Security Act.
Under the Employee Retirement Income Security Act are there any parts dedicated to anti-divestment?In many cases, under the Employee Retirement Income Security Act there are portions that deal with anti-divestment. These provisions found in the Employee Retirement Income Security Act are there to protect those individuals who were part of employee retirement plan from the loss of benefits that they were formerly able to receive. How the individual’s retirement plan was written originally can play a major part though. For example if an individual was entitled to health care benefits and the employer were to drop health care benefits for all employees, then that individual may lose their health benefits as well since the is no longer an organization that provides them the health care benefits.
Under the Employee Retirement Income Security Act can a pension be garnished by a credit card company?Often, a pension is not able to be garnished by a credit card company. The Employee Retirement Income Security Act protects an employee’s retirement income, by making sure that pensions receive proper funding and are administered correctly. There are provisions in the Employee Retirement Income Act that basically state that the pension of an individual may not be paid to any other individual, unless it is one of the few and very narrow circumstances. For example if an administrator of a plan were to receive a garnishment order they would first need to determine the type of order it is under the anti-alienation and anti-assignment provisions from the Employee Retirement Income Security Act. If the administrator finds that the order received is a credit card debt they are not able to attach the debt to the individual’s pension. It is important to note though that while the pension and its disbursements are not able to be garnished, if the money is intermingled in the individual’s bank account with money from other sources the account is able to frozen and the individual’s assets to be seized.
Under the Employee Retirement Income Security Act are there penalties for a company not depositing an employee’s contribution to their retirement plan?In some situations, under the Employee Retirement Income Security Act the Department of Labor can levy a civil penalty for a deposit to a 401(k) with elective deferral contributions that are late. The penalty can be equal to twenty percent of the applicable recovery amount. Also any violations of the Employee Retirement Income Security Act may have legal action taken by governmental agencies in charge of enforcement and interpretation; legal action may also be taken by the participants of the plan.
The Employee Retirement Income Security Act was passed in 1974; it set up the minimum plan that private sector companies can offer their employees. It also laid out extensive federal income tax laws in regards to retirement income. The Employee Retirement Income Security Act also laid out what departments bear the responsibility for interpreting and enforcing the Act. Any questions regarding the Employee Retirement Security Act can be directed to the Experts.