Free Case Consultations 704-594-4317

Home  /  Blog  /  What Is the Main Purpose of ERISA?


What Is the Main Purpose of ERISA?

On Behalf of Christian Ayers
  |     |  

The Employee Retirement Income Security Act (ERISA) is a crucial piece of federal legislation for any injured worker covered by an employer-provided disability plan or anyone with an employer-provided retirement plan. ERISA prevents those responsible for managing covered employees’ funds provided through such plans from engaging in any fiduciary malpractice. In addition, ERISA contains a strict set of rules that all covered employers must follow.

When an employer has offered any type of benefit plan to a covered employee, that employee has the right to expect fair dealings and honest fiduciary management of their plan. ERISA was formed in 1974 to protect workers with long-term disability plans and other benefits plans managed by their employers. If you have any type of long-term disability benefits plan through your employer and suffer a serious injury at work, it’s important to know whether ERISA applies to your situation.

Three entities all work together to enforce ERISA whenever disputes arise. These entities are the Internal Revenue Service (IRS), the Labor Department’s Employee Benefits Security Administration, and the Pension Benefit Guaranty Corporation.

What is the main purpose of the ERISA?

Purpose of ERISA

The main purpose of ERISA is to protect employees with retirement plans and welfare disability plans managed by their employers. Prior to the implementation of ERISA, it was possible for an employer to misuse employee benefits plans in various ways, often leaving affected employees with little to no legal recourse against these actions.

Under ERISA, fiduciaries charged with managing employees’ benefits plans are prohibited from misusing the included funds in any way. Additionally, ERISA also sets minimum standards for plan participation and vesting. ERISA’s rules also apply to accrual of benefits, funding retirement plans, and notifying covered employees of changes to their plans.

What to Do After an ERISA Violation

If you are covered by any type of benefits plan through your employer and your employer is subject to the rules of ERISA, it is important to know your rights when it comes to addressing any breach of fiduciary duty that affects your plan. ERISA allows an employee victimized by fiduciary malfeasance to file a civil suit to recover any lost benefits and to ensure accountability for the incident. However, doing so will require the employee to first file an administrative appeal directly to the insurance company responsible for the plan in question.

Dealing with any insurance company can be incredibly stressful and challenging, so it is always advisable for an employee with an ERISA violation case of any kind to seek experienced legal representation before pursuing this type of claim. Your ERISA attorney can help you gather the evidence needed to prove your case and make a compelling argument to the appropriate insurance carrier. In addition, the appeals process is complex, and if the insurance company denies your appeal your attorney’s guidance and support will be critical for ensuring a positive outcome from any further legal recourse you must pursue.

An ERISA case could not only yield compensation for the losses you experienced because of the breach of fiduciary duty that affected your plan but also ensure accountability for the at-fault party and prevent other covered employees from experiencing similar mistreatment from the employer in the future. The attorneys at Ayers, Whitlow & Dressler have extensive experience representing clients in ERISA cases and can put this experience to work in your case.


Q: What Is the Main Purpose of ERISA?

A: ERISA pertains to employee retirement and welfare benefits plans, shielding them from fiduciary misuse. ERISA aims to reduce uncertainty surrounding disability claims and benefits disbursed to disabled workers. ERISA sets clear guidelines pertaining to qualification for benefits, how long benefits are administered, and how much a claimant can receive in benefits. ERISA also sets strict rules for fiduciaries in charge of managing employee retirement and welfare benefits plans, preventing them from misusing these funds in any way.

Q: What Plans Does ERISA Apply to?

A: ERISA covers two main types of plans: employee retirement benefits plans and employee pension benefits plans. When it comes to retirement plans, ERISA covers defined benefit plans and defined contribution plans. If you are unsure whether a specific benefits plan through your employer is covered by ERISA, it is best to consult an experienced attorney if any fiduciary discrepancies arise with the plan.

Q: What Does ERISA Compliance Mean?

A: ERISA governs the federal legal requirements that all covered employers must fulfill with respect to employee retirement and welfare plans. ERISA requires employers to provide accurate and timely information to covered employees regarding proposed changes to these plans, features, funding, benefit accrual, and more. ERISA compliance also pertains to fiduciary duties for those responsible for managing covered plans.

Q: What Are the Four Key Areas of ERISA?

A: The four major types of employee benefits plans covered by ERISA are 401(k)s, pensions, deferred compensation plans, and profit-sharing plans. Employers that offer these plans to their employees under ERISA must ensure they meet full compliance at all times and fulfill all fiduciary duties to their employees. If you are unsure whether ERISA covers a specific plan, consult an experienced employment attorney as soon as possible.

Q: Why Should I Hire an Attorney for an ERISA Violation?

A: Navigating any type of legal dispute regarding ERISA is incredibly difficult, especially when an employer is not forthcoming with relevant information or if they have intentionally violated their fiduciary duties in any way. Additionally, an ERISA case will entail interaction with one or more insurance carriers, and it is always best to have experienced legal counsel on your side before interacting with any insurance company for any reason.

The attorneys at Ayers, Whitlow & Dressler aim to help our clients and prospective clients make more informed legal decisions regarding their employment-related benefits, including those covered by ERISA. If you have encountered any problems related to an ERISA-covered benefits plan of any kind, we can help. Contact us today to schedule a consultation with our team and learn more about the legal services we offer in these cases.