- Before ERISA, there was no way to guarantee private pension agreements. No longer can employers offer plans, submit contributions, and then decide not to give their employees what they rightfully earned.
- Before ERISA, there were no strict vesting rules for public pensions. That means, that even if you worked every day for 30 years at the same physically demanding job, your employer could withhold your pension benefits unless you continue working until you turn 65 years old.
- Before ERISA, pension funding was not regulated at all. This means that actuaries were improperly guesstimating future interest rates and inflation rates. Thus, many individuals who rightfully contributed to their pension plan did not receive accurate benefits.
- While ERISA did not technically create the tax-deferred compensation plan known as 401(k), it does currently regulate them. Without the ERISA’s helping hand, there would be no regulations on 401(k) plans. Their influence led to both the Revenue Act of 1978 and the IRS’ 401(k) regulation standards in 1981.
- ERISA has put in place high-stakes litigation that forces sponsors to diligently evaluate the risks associated with offering their own company retirement benefits in the form of stocks. It is important to note that high-stakes litigation fees continue to rise.
Contact Sackett & Associates Insurance Services for all of your Sonoma County, California insurance needs. If you have any remaining questions regarding the changes surrounding the Employment Retirement Income Security Act, feel free to give us a call!