What is the primary purpose of ERISA?

The primary purpose of the Employee Retirement Income Security Act (ERISA) is to protect the rights of workers in employer-sponsored benefit plans. ERISA establishes standards for the administration of pension and health plans, ensuring that employees receive the benefits they are entitled to under these plans. It requires plans to be transparent, allowing workers to understand their rights, and mandates that plans provide certain information to participants and beneficiaries. Additionally, it enforces fiduciary responsibilities, compelling plan sponsors to make decisions in the best interests of the participants.

This focus on protecting employees is a significant distinguishing factor of ERISA, as it sets minimum standards for participation, vesting, benefit accrual, and funding to safeguard participants against mismanagement or loss of funds.