Employment Retirement Income Security Act (ERISA)

• ERISA governs the creation and maintenance of employer-provided pensions

• A qualified ERISA plan is entitled to preferential tax treatment

Sources: 29 U.S.C. §§ 1001-1461 (1988) and 26 U.S.C. § 401(a) (1988). “Merrill Lynch Survey Finds Baby Boomers Not Saving for Retirement”, BNA PENSIONS & BENEFITS DAILY, July 11, 1991.

• Shortcomings
  - Not available to everyone
  
  - Many Americans overestimate how much their pension plans will provide

• Benefits
  - Employees are allowed to defer taxation of a portion of their income
  
  - Interest accrued on the funds is tax-deferred until withdrawal or retirement
  - The employer avoids payroll taxes on the amounts contributed

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