If you’re thinking about introducing pension plan, health plan or some other type of employee benefits plan at your company, understating ERISA is crucial. It would help you roll out a successful program, and most importantly, it would help ensure that your program is federally compliant.

This guide will walk you through the basics of ERISA by answering the most common questions asked about the statute.

So what exactly is ERISA?

ERISA—or the Employee Retirement Income Securities Act—is a broad federal statute. It provides guidelines to employers regarding the provision and administration of employee welfare plans, so that they (the employers) can structure and execute programs in a way that best protect the interests of their employees. It must be mentioned here that the statute itself does not require employers to provide any type of benefit plans to their employees.

What agencies regulate ERISA?

ERISA is mainly regulated by the Department of Labor (DOL), the Internal Revenue Service (IRS) and the Employee Benefit Security Administration (EBSA).

What are the administration requirements covered by ERISA?

ERISA underlines several administration standards for employers to comply to. Most of these standards are related to reporting, disclosure, management of assets and keeping employees informed.

What are the penalties for employers for not complying with ERISA

Once an employer voluntarily opts to provide a benefit plan to their employees, they must strictly comply with ERISA. If they don’t, they can face heavy fines and penalties. Some common types of ERISA violations, and the penalties entailing those violations include:

• Failure to provide employees with a summary plan description (SPD). This can result in a fine of up to $152 per day.
• Failure to file Form 5500 with the IRS. This can result in a fine of up to $2,140 per day.

How can A&B Accounting and Business Solutions help?

A&B Accounting and Business Solutions provide expert business consulting services to small and medium sized businesses in Florida. We offer advice and help on all business matters, including how to run a business successfully and in compliance with the various federal and state statutes. Get in touch with us today to discuss your ERISA compliance needs.