TAX 9873 Lecture Notes - Lecture 45: Employee Retirement Income Security Act, Pension, Employee Benefits
Document Summary
19th cent: first employer-sponsored pension plans in the u. s. - railroad industry. Pension benefits paid from employers" annual revenues reduced/terminated if unprofitable. Before erisa, employer could terminate unfunded pension plan w/o liability. After studebaker automobile company terminated underfunded pension plan in 1963, leaving several thousand workers and retirees without the pensions they had been promised, congress began considering legislation to ensure the security of pension benefits in the private sector. The employee retirement income security act of 1974 (erisa) provides comprehensive federal scheme for the regulation of employee pension and welfare benefit plans offered by employers. Contains various provisions protect the rights of plan participants and beneficiaries in employee benefit plans. Protections: reporting and disclosure, participation, vesting, and benefit accrual, as well as plan funding. Regulates responsibilities of plan fiduciaries and other issues regarding plan administration. Contains various standards that a plan must meet in order to receive favorable tax treatment.
