Retirement Benefits Laws

Important aspects of various retirement benefits laws

Retired people in USA enjoy many pension or employee benefit plans that are established or maintained by the employers, insurance companies, government organizations and other institutions and provide income upon retirement. Under Employee Retirement Income Security Act (ERISA) there are wide varieties of retirement benefits like 401K and traditional pension plans that are regulated by Department of Labor. Most of the private sectors are covered by this retirement benefits law and offer sufficient benefits to both participants and beneficiaries. Further all individuals who are above the age of 62 and fully insured by the social security system are entitled to the monthly retirement insurance benefits or old age insurance benefits in the form of social insurance payments. According to the insurance retirement benefits law the payment amount depends on the social security taxes paid to the fund, income earned and the age at which benefits are claimed.

Retirement benefits laws and regulations:

  • The Employee Retirement Income Security Act of 1974 (ERISA) is a federal retirement benefits law that covers retirement, health and other welfare plans based on certain standard criteria. This law regulates employers to provide pension plans for their employees including tax, fiduciary, disclosure, minimum funding and federal insurance rules.
  • The Title 1 of ERISA is controlled by Employee Benefit Security Administration (EBSA) which administers reporting requirements for the maintenance of health-care provisions that comes under the COBRA and HIPAA health plans.
  • To protect certain type of retirement benefits the Title IV of ERISA provides provisions for certain employers and other administrators to participate in the insurance systems established by the federal government. According to this insurance benefits law the employers pay the regular premiums to federal government’s Pension Benefit Guaranty Corporation (PBGC) for the benefit of their workers.
  • 401K plan is one of the important sections of Internal Revenue System and comes under the integral part of the tax rules under ERISA.  Similarly, IRA is also a special type of the individual retirement account created by ERISA in which the employee contributions are non-taxable under certain conditions.

Social Security retirement benefits:

  • Unfortunately, the ERISA retirement benefits law provides less fortification to the disability insurance plans and is not applicable to the private policies. In such cases, the federal Old-age Survivors and disability insurance program also known as social security encompass several social welfare and insurance programs for retired individuals.
  • The social security Administration keeps track of employees’ earnings throughout their career and generally pays the retirement benefits after the age of 62 years. As per this retirement benefits law the worker’s retirement income depends on the Primary Insurance Amount (PIA) and the age at which the retiree choose to receive benefits.

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