The Employee Retirement Income Security Act of (ERISA) and its Effect on Individual Rights of Private Pensioners

One of the most significant aspects of long term financial planning is retirement income. An individual simply cannot effectively develop a long range financial plan unless they know what their pension benefits will add to their retirement income. To make an informed decision about the value of these benefits the employee should carefully examine the company-sponsored pension plan in which they are*covered. Knowing the type of pension plan, who is the plan\u27s administrator and the plan\u27s investment vehicle are important issues for the employee to understand when making retirement decisions. The employee must also understand the guidelines that govern their pension. Comparing these guidelines to the minimum standards required by the Employee Retirement Income Security Act of 1974 (ERISA) is essential to ensure that your earned pension benefits have been credited correctly. It is my intention to develop this thesis to help an employee examine their pension benefits. I hope to simplify the complex retirement issues dealt with by ERISA. The Employee Retirement Income Security Act of 1974 (ERISA) detailed the minimum rights of the individual pensioner. ERISA established the Pension Benefit Guaranty Corporation which provides a pension insurance program for underfunded defined benefit pension plans. In researching this thesis I interviewed both retirees and vested pension plan participants. Both of these groups were surprised to learn that not all pension plans in the United States are insured by the Pension Benefit Guaranty Corporation. Pension benefits are taken for granted by most employees as well as the type of pension plan an employee is vested. Pension plans run the gambit from a defined benefit plan to various types of defined contribution plans such as 401(k)\u27s, stock option plans and profit sharing programs. Employees should know how benefits are earned under each of these retirement programs. I hope that this research will help an informed worker to better determine their specific pension plan benefits. Armed with this information an individual can better determine their long range financial future