ERISA Requirements
Chapters in this video
- 0:00 Why ERISA exists: tax breaks in exchange for fairness
- 1:18 Who gets in the club: private-sector only, 457(b) and church plans bounced
- 2:29 Eligibility: age 21 and one year of service
- 3:34 Cliff versus graded vesting and the Carla trap
- 5:24 Fiduciary duty, funding, and the Summary Plan Description
- 6:31 Top-heavy plans: the 60% trigger and 3% fix
- 8:08 Rapid-fire exam recap
What this video covers
- Which plans ERISA covers (private-sector employer-sponsored) and which it does NOT (government plans, 457(b)s, church plans, and individual retirement accounts (IRAs))
- The eligibility floor of age 21 and 1 year of service, and why plans can be more generous but never stricter
- Cliff vesting (0% until year 3, then 100%) versus graded vesting (20% per year starting year 2, reaching 100% in year 6)
- Why an employee's own contributions are always 100% vested immediately, and vesting schedules only apply to employer contributions
- Fiduciary duty under the prudent person standard, the diversification requirement, and the ban on self-dealing
- The reporting requirements: annual filing with the Department of Labor (DOL) and the Summary Plan Description (SPD) given to participants
- The top-heavy threshold (more than 60% of assets benefiting key employees) and the 3% minimum contribution fix for non-key employees
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