What is ERISA for Oklahoma workers?
This blog has previously discussed several types of minimum benefits that the federal government requires that employers provide their employees in Oklahoma and other states. These include minimum wage, certain safety conditions in the workplace, and protection from several types of discriminatory practice. One we talked about a month ago dealt with providing the option for employees to continue to purchase group health insurance after a qualifying event would have otherwise caused them to lose it. This law, known by the acronym COBRA, is actually technically part and parcel of a larger overarching regulatory statute known as ERISA.
ERISA stands for the Employee Retirement Income Security Act, and was passed by the U.S. Congress in 1974. ERISA's original intent was to set minimum standards for employers to meet with regard to retirement and health plans set up for employees by private companies. It is important to understand what ERISA does not do; it does not require a private employer to give its employees a pension or retirement plan. It does, however, regulate how a company that chooses to offer such benefits must go about it. For example, ERISA requires that a company offering a retirement plan must give certain information about than plan to its employees automatically. It must also keep other kinds of information available to employees upon request, free of charge. This includes the rules of the plan, how it operates and financial information about it. Just as importantly, ERISA holds the overseers of such plans to certain fiduciary responsibilities. This means that the people who administer the plan must adhere to certain rules in making decisions about investment and other important matters. They must, for example, run the plan only for the benefit of the enrolled employees and other beneficiaries, and need to diversify assets with an eye to minimizing the risk of large losses. The idea of this law is to avoid such situations as the ENRON scandal that occurred several years ago.
It is important to remember that ERISA does not protect retirement plans from all losses. The vagaries of investment in securities and other financial vehicles means that sometimes losses happen, as when the stock market took a dive in the late 2000s. However, the law does help mitigate the chances of terrible losses through mismanagement or fraud. Employees who want more information about their rights in this area, or employers who want to ensure they are in compliance may wish to consider consulting with an experienced Oklahoma employment attorney.