In the labor sector, the term “The Employee Retirement Income Security (ERISA)” refers to a federal law protecting the workers’ retirement assets who work in private industries in America. The law’s implementation was in 1974 to govern that the cautioner does not exploit planned benefits. In addition, it protects some non –retirement accounts such as employees and health plans. ERISA provides defined plans such as distinct involvement, comprising profit-sharing strategies, pension, and deferred compensation procedures. At the same time, the non-retirements plans include flexible spending accounts (FSAs), life insurance, and disability insurance and health maintenance organization (HMO).
ERISA’s enaction addressed public concerns that funds belonging to private companies were being abused and misused. Since its enactment in 1974, ERISA amendments met employees’ families’ health care and retirement changes (Mangiero, 2020). ERISA applies to private companies which offer allowances to their employees. This company includes firm structuration such as c-corporation, s-corporation, LLccs partnership, and proprietorship. Thus no matter how a business is structured, provided it’s a private entity, ERISA covers it.
My retirement plan is based on using an individual retirement account (IRA) that allows one to save for retirements based on tax-deferred. In addition, this type of program allows one’s saving to grow or compound more quickly than in a taxable account. The growth of an IRA type of account depends on individual contributions and investments to the IRA (Holden & Bass, 2018). The significance of this type of plan is that it gives various options and choices for investing. Moreover, an IRA account supplements one’s saving in the employer-sponsored retirement plan. It Also has a broader scope of investment than an employer-sponsored plan and it is a free tax platform.
References
Mangiero, S. (2020). Insight: Calling ERISA ghostbusters – The rise of independent fiduciaries. SSRN Electronic Journal. Web.
Holden, S., & Bass, S. (2018). The IRA Investor Profile: Traditional IRA Investors’ Activity, 2007–2016. SSRN Electronic Journal. Web.