The Employee Retirement Income Security Act of 1974, or ERISA, is a complex federal statute that applies to nearly all employee benefit plans, subject to a few narrow exceptions. Combining aspects of contract law, trust law, administrative law, and common law, ERISA is famously complex, earning it the moniker: "Everything Ridiculous Imagined Since Adam." Florence Nightingale Nursing Service Inc. v. Blue Cross and Blue Shield, 832 F. Supp. 1456, 1457 (N.D. Al. 1993), aff'd, 41 F.3d 1476 (11th Cir. 1995).
ERISA can be intimidating, even for lawyers. This article will endeavor to provide a practical overview of ERISA, followed by some pointers for how to spot and address ERISA problems that commonly arise in the employment law context.
Table of Contents
- ERISA: A Brief Overview
- ERISA's Requirement of a "Full and Fair Review"
- Common ERISA Mistakes Employment Lawyers Make
ERISA: A Brief Overview
ERISA was originally enacted in 1974 to protect pension plan participants and beneficiaries following the catastrophic collapse of the Studebaker pension plan in 1963. The statute requires employers to hold pension benefits in trust and imposes upon them fiduciary duties to invest prudently and to administer plans solely in the interest of plan participants and beneficiaries.
During the drafting process, Congress expanded ERISA to apply not only to pension benefits but also to welfare benefits, even though the latter need not be held in trust and are exempt from the statute's vesting provisions.
ERISA applies to all employer-sponsored benefit plans except government and church plans, although church plans can opt into ERISA's protections...
