Employee Retirement Income Security Act of 1974 (ERISA)

The Employee Retirement Income Security Act of 1974 (ERISA) sets requirements for the provision and administration of employee benefit plans. Employee benefit plans include health care benefits, profit sharing, and pension plans for example. ERISA requires companies that meet certain criteria to file a form (Form 5500) annually with the Internal Revenue Service that discloses basic information about each benefit plan, such as plan expenses, income, assets, and liabilities.

Note: IRS has suspended requirement to file Schedule F (Form 5500) for all plan years form has not been filed. Schedule F (Form 5500) applies to adoption assistance programs, cafeteria plans, and educational assistance programs. See www.irs.gov/news/nandf.html (select IR-2002-043) for more information

ERISA also requires employers to submit a Summary Annual Report annually to plan participants and beneficiaries.

Note: Effective April 8, 2002, the Department of Labor issued their final rule that employers can send electronic distribution of benefit plan information to employee’s residences if employee agrees to electronic notification. There must exist the option to receive notification in hardcopy as well. In addition, the rule outlines provisions for using electronic means for employee benefit plan recordkeeping as required by ERISA. This ruling applies to all reports, statements, notices, and other documents required to be distributed by ERIS

Penalties for Non-Compliance

The IRS and the Department of Labor jointly enforce ERISA requirements. Willful violations result in criminal and civil penalties.

Note: The Department of Labor has outlined a new penalty structure under their Delinquent Filer Voluntary Compliance (DFVC) Program, in addition to updating the procedures.. In addition, under the Voluntary Fiduciary Correction Program (VFCP), the Department of Labor is providing immediate relief from excise taxes per a proposed class exemption as long as the criteria and the program’s procedures have been satisfied.

Source: Society for Human Resource Management