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The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that establishes legal guidelines
for private pension and employee benefit plans. ERISA requires plans to provide participants with specific
information about plan features and funding and establishes certain fiduciary responsibilities for those who manage the plan.
Administrators of an ERISA plan have certain legal obligations to employees who participate in a plan. They must act
in the interests of the enrolled employees, for the exclusive purpose of furnishing benefits. As fiduciaries of the
plan they must perform their functions in a prudent and careful manner, take appropriate steps to diversify any plan
investments and must comply with any written documents that govern the particular plan.
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One of the documents participants are entitled to receive automatically when becoming a participant of an
ERISA-covered retirement plan or a beneficiary receiving benefits under such a plan, is a summary of the
plan, called the summary plan description or SPD. The plan administrator is legally obligated to provide
participants with the SPD. The summary plan description tells participants, in basic terms, what the plan
provides and how it operates. For example it explains things like when an employee can begin to participate
in the plan, when benefits becomes vested, how long a participant can be away from their job before it might
affect their benefit, and whether their spouse has a right to part of their pension in the event of their
death. If a plan is modified, participants must be informed, either through a revised summary plan description,
or in a separate document, called a summary of material modifications. TIAA-CREF can work with you to meet
these requirements.
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Each year, the plan administrator must automatically give participants a copy of the plan's summary annual
report. This is a summary of the annual financial report that plans file with the Department of Labor. These
reports are filed on government forms called the Form 5500. The form must be filed and the summary annual
report delivered to participants subject to specific
deadlines.
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ERISA was created to protect the interests of employees and their beneficiaries (such as spouses and children) who
are enrolled in pension plans. ERISA requires participants to receive disclosure and reporting and establishes the
obligations and responsibilities of the "fiduciaries" that administer the plans. In addition to receiving the
Summary Plan Description and Summary Annual Report, participants and their beneficiaries have a right to take
action in Federal court if an administrator of a plan breaches their fiduciary responsibility.
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