Introduction

Few investments are more important than the one you have in your retirement plan. Because the average American will rely on savings for 18 years after retirement, it is essential that you understand your rights and responsibilities under your retirement plan.

Participants in retirement plans have certain rights that are governed by Federal law [29 USC Sec. 1001, et seq]. They also have responsibilities. Similarly, the people who sponsor your retirement plan also have rights and responsibilities. Most are spelled out by a law called the Employee Retirement Income Security Act of 1974 (ERISA). This article explains some of the important features of this law.

For example, the article outlines the role of different Federal agencies in regulating plans. It describes the obligations of your employer (or other appropriate plan official) to provide you with information about the plan, and tells you what information must be made available automatically, at regular intervals, and, in many cases, at no cost to you. It also points out the importance of keeping informed of any changes in your plan's rules of operation.

This article tells you what is generally required to become eligible for your plan, including how long you may have to be an employee before becoming a participant. Important concepts such as accruing benefits and becoming vested in your benefits are explained. The article also answers common questions about how changes in your employee status might affect your retirement benefits, such as termination or returning to your job after an interruption of employment. And it discusses the potential impact on your plan of mergers, acquisitions and plant shut downs.

Other important features include:

• A description of your plan fiduciary's duties to invest your money prudently and the sanctions against fiduciaries who misuse or mismanage your money.
• An explanation of the rules that require your employer to adequately fund your pension plan, as well as a description of the penalties for employers who fail to comply with minimum funding requirements.
• Instructions on how to file a claim for a retirement benefit and how to appeal for a review of any denial of your claim.