Does ERISA regulate mandated benefits such as Social Security benefits as well as voluntary benefits provided by employers?
Donovan v. Dillingham, 1982 U.S. Court of Appeals decision (precedent)
A "plan" under ERISA exists if a reasonable person can determine:
The intended benefits
A class of beneficiaries
The sources of those benefits
A procedure for determining benefits
Using the above Dillingham factors, would there be a plan in the following fact scenario? If so, would it be a welfare plan or a pension plan?
A supermarket created a voucher system whereby it provided grocery vouchers to retirees upon their retirement from the store and the retirees could use the vouchers in lieu of cash to purchase goods at the supermarket. The supermarket established the voucher program according to an "executive memorandum" but had no procedures for administering the voucher program nor a trust fund to fund the voucher program. The voucher program was simply funded out of the supermarket's general revenues and deducted as a business expense on the super market's tax return. Explain your answer.
There is a plan in the fact scenario. The intended benefits are the grocery vouchers that the retirees on retirement can use in lieu of cash to purchase goods at the super market. The class of beneficiaries in this case is the retirees. The source of those benefits is the super market general revenues. The cost is deducted as general business expense. A procedure for determining benefits is identifiable. On retirement, the retirees get certain vouchers that allow those who have ...
This posting gives you a step-by-step explanation of pension plans and how ERISA influences them. The response also contains the sources used.