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ERISA Regulated Plans

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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.

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Solution Preview

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 ...

Solution Summary

This posting gives you a step-by-step explanation of pension plans and how ERISA influences them. The response also contains the sources used.

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Government's involvement in and regulation of employee benefits

Please answer this questions. (Human Resources Questions)

First: Other than the mandates of the Internal Revenue Code (IRC) and a few other ineffectual reporting and disclosure requirements, benefit programs were practically unregulated by the federal government. Before the major shift that came with the enactment of the Employee Retirement Income Security Act (ERISA) of 1974, which was primarily aimed at traditional defined benefit (DB) pension plans but applicable to other employer sponsored retirement and benefit programs.

a) What is the government's current role in regulating the administration of employee benefits?
b) Do you think there is too little or too much government intervention? Why?

1-There has been great concern expressed by many about the government's involvement in employee benefits. Is this appropriate in our capitalistic society? Or is the government taking control too far?

Second: There are certain benefits that are legislatively mandated and cannot be altered or dropped by an organization for any reason other than the organization is closing its doors for good! Social Security and Medicare, unemployment insurance, worker's compensation, COBRA and FMLA are all federal and state mandated programs.

a) What do you think determines the types of programs that the government chooses to make mandatory?

b) Do you feel these programs are efficient and effective? Why or why not?

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