The retirement income security, popularly known as the Employee Retirement Income Security Act (ERISA), is a federal law in the US. According to the law, minimum standards of pension plans are established in the private industry and some rules are also provided in the effect of federal income taxes. The main objective of the retirement income security is to protect the interests of the participants of the employee benefit plans and their beneficiaries.
At times, retirement income security is used to refer to the laws which regulate various types of employee benefit plans, which are included in the Internal Revenue Code and ERISA. The act comprises department of labor, department of treasury and the pension benefit guaranty corporation.
According to the retirement income security plan, the employers are not required to establish various types of pension plans. On the other hand, the retirement security manages the operation of the pension plan once it has been established. The employers who sponsor the plans need to fulfill some minimum requirements of funding.
The manner in which the pension plan may pay the benefits is also managed by the ERISA plan. In this regard, the Pension Benefit Guaranty Corporation was established to provide coverage if the terminated defined benefit pension plan does not have enough assets to offer the benefits to the participants.
Any employer is not required to offer health insurance to the employees or the retirees under the ERISA plan. However, if the employer chooses to establish a health benefit plan, the operation of the plan is regulated by the ERISA plan. In addition to these, there have also been other changes and amendments in regard to the health benefit plans. Some of these include Mental Health Parity Act, Women's Health and Cancer Rights Act, Mothers' Health Protection Act and so on.
There is an exemption in the ERISA plan in regard to the Hawaii Prepaid Healthcare Act. In this regard, the private employers in Hawaii follow the rules of the state in addition to the ERISA.
Through the retirement income security, retirees are able to have safe and secure benefits and enjoy good benefits in the long run.