Employee Retirement Income Security Act - ERISA

ERISA. Wasn’t that the Milano actress, from Charmed? Eh, maybe not.

ERISA actually stands for the Employee Retirement Income Security Act...which was lovingly created by the Nixon clan in 1974. It essentially established minimum standards, or guidelines, for pension plans in the United States.

Believe it or not, before this Act, companies essentially did not have to disclose to their employees how well or poorly their pension investments had been doing. It was sort of a hidden set of numbers until, one day, the beneficiary retired, and was, more or less…cashed out.

Weirdly, pension funds were actually managed by the corporation that made whoopee cushions...because, of course, it assumed that, if it was great at that, it would be great at the buying and selling of stocks in the global marketplace. Yeah—not so much. So specifically, ERISA codified, or structured, the way in which pension funds are created and managed in the United States.

It made them voluntary—that is, you were no longer forced to save money in a structure in which the company managed your retirement savings…and by the same token, it did away with the government’s former requiring of the company to have them in the first place. Additionally, the features, benefits, and the whole notion of fairness in terms of how the pension fund monies were earned, retained, vested into, and then distributed...all had to be written down in a rational, logical way, so that employees would not end up being screwed under the yoke of unscrupulous managers.

ERISA only exists for corporations. That is, it’s not something the government uses, nor religious organizations, nor other structured health things, like workers’ comp, unemployment, or disability insurance. And all of this only works if you and your company are in the good ol’ US of A. There is, in fact, a Somalian corporate retirement plan, but we’re, uh...pretty sure you wouldn’t like it.