ERISA, the Employee Retirement Income Security Act of 1974, is a federal law that establishes the minimum standards for most retirement and healthcare plans in the private sector. The purpose of the law is to protect employees who participate in employer-sponsored benefit plans. In order for employers to remain compliant with the requirements of ERISA, there are a few essential steps to take.
Ensure that your retirement and healthcare plans meet the minimum standards set by ERISA. This includes creating a written plan document that outlines the plan’s terms, benefits, and eligibility criteria. Designate fiduciaries responsible for managing the plan, making investment decisions, and administering benefits. Fiduciaries have a legal duty to act in the best interests of plan participants.
To remain compliant with ERISA provisions, organizations offering qualified plans need to adhere to various ongoing and calendar-based requirements. Some of the ongoing requirements include timely deposits of loan payments and employee elective deferrals, providing enrollment opportunities to eligible employees, repaying outstanding loans according to plan terms, notifying participants of plan changes, and sending fee disclosures to participants annually.
On the other hand, the calendar-based requirements involve specific actions to be taken within certain timeframes throughout the plan year. These actions include distributing benefits statements, providing required minimum distributions, filing Form 5500, paying excise tax, and sending specific notices to participants. HR professionals can use compliance calendars and HRIS systems like BerniePortal to help manage ERISA compliance and other administrative tasks efficiently. Working with a third-party administrator can also be beneficial for managing ERISA and other compliance requirements effectively.
It’s essential to stay informed and educated about ERISA regulations and keep track of any changes to ensure ongoing compliance with the law. Always consult legal or compliance experts to address specific questions or concerns related to ERISA compliance for your organization.