The Employee Retirement Income Security Act of 1974 is a comprehensive federal law that sets minimum standards for retirement and health benefit plans in private industry. ERISA laws and regulations, which apply to employers sponsoring retirement, health and/or other welfare benefit plans, set forth detailed requirements for reporting information about benefit plans to the government as well as to plan participants. In addition, the law establishes a high fiduciary standard for those who handle and invest assets set aside for plan benefits to ensure those assets are available when needed. ERISA has been expanded to include health laws including COBRA, HIPAA and the Affordable Care Act.
Calfee’s benefits attorneys are experienced in the interpretation, application and enforcement of ERISA and regulatory matters impacted by ERISA. They assist clients in putting new plans in place as well as ensuring that existing benefit plans are ERISA-compliant and properly administered.
Failure to comply with ERISA presents considerable risks to companies and individuals. In particular, individuals who administer ERISA plans or handle plan assets may be subject to criminal penalties for violations such as embezzlement, kickbacks and false statements related to benefit plans. The U.S. Department of Labor may impose civil penalties on individuals administering ERISA plans or handling plan assets for violations such as:
- Failing to operate the plan prudently and for the exclusive benefit of participants.
- Using plan assets to benefit certain related parties to the plan, including the plan administrator, the plan sponsor and parties related to these individuals.
- Failing to properly value plan assets at their current fair market value, or to hold plan assets in trust.
- Failing to follow the terms of the plan (unless inconsistent with ERISA).
- Failing to properly select and monitor service providers.
- Taking any adverse action against an individual for exercising his or her rights under the plan (e.g., being fired, fined or otherwise being discriminated against).
- Failure to comply with ERISA Part 7 and the Affordable Care Act.
ERISA provides plan participants with the right to sue plans, plan sponsors and plan fiduciaries. Individuals who administer ERISA plans or handle plan assets may be held individually liable for breaches of fiduciary duties set forth in ERISA.
Contact Kimberly Moses, Partner