ShmoopTube
Where Monty Python meets your 10th grade teacher.
Search Thousands of Shmoop Videos
Retirement Videos 84 videos
A redemption charge is a charge applied when you redeem shares of a mutual fund in a deferred commission purchase structure.
What was the Tax Reform Act of 1986? Hit play to find out.
What are Passive Investing and Passive Investors? Passive investing and passive investors are ones who opt to ride the market out over the long ter...
Finance: What is ERISA? 7 Views
Share It!
Description:
What is ERISA? The Employee Retirement Income Security Act (ERISA) of 1974 essentially codifies all of the rules and laws that pertain to the management of pension funds. These laws were designed to protect rank and file members and ensure that their pension funds were invested only in qualified, investment grade vehicles with minimal risk. ERISA was legislated due to infamous scandals over Teamster pension funds being associated with casino loans and organized crime.
- Social Studies / Finance
- Finance / Financial Responsibility
- College and Career / Personal Finance
- Life Skills / Personal Finance
- Finance / Finance Definitions
- Life Skills / Finance Definitions
- Finance / Personal Finance
- Courses / Finance Concepts
- Subjects / Finance and Economics
- Finance and Economics / Terms and Concepts
- Terms and Concepts / Banking
- Terms and Concepts / Regulations
- Terms and Concepts / Retirement
- Terms and Concepts / Trusts and Estates
- Terms and Concepts / Wealth
Transcript
- 00:00
finance a la shmoop what is ERISA ERISA
- 00:07
wasn't that the actress Milano or something from charmed and maybe not
- 00:12
well ERISA actually stands for Employee Retirement Income Security Act
- 00:17
yeah next name there which was lovingly created by yes the Nixon clan in 1974 [picture of President Nixon]
- 00:23
about a week after Watergate it essentially established minimum
Full Transcript
- 00:27
standards or guidelines for pension plans in the United States and believe
- 00:31
it or not before this act companies essentially did not have to disclose to
- 00:36
their employees how well or poorly their pension investments had been doing all
- 00:40
along the way sort of a hidden set of numbers until well one day the [pension papers going into a filing cabinet]
- 00:44
beneficiary retired and was more or less cashed out well here's what you got good [older guy casting a fishing rod]
- 00:49
luck have fun in your two and a half years of expected lifetime after [$50 check passing hands]
- 00:52
retirement weirdly pension funds were actually
- 00:55
managed by the corporation that made whoopee cushions or whatever they made
- 00:59
because of course it assumed that if it was great at making whoopee cushions [whoopie cushions in a production line]
- 01:03
well then it would also be great at buying and selling stocks in the global [stock floating across world map]
- 01:08
stock market marketplace yeah not so much
- 01:11
so specifically ERISA codified or structured the way in which pension
- 01:16
funds are created and managed in the United States it made them voluntary
- 01:20
that is you are no longer forced to save money in a structure in which the [money going into piggy bank]
- 01:25
company managed your retirement savings and by the same token it did away with
- 01:29
the government's requirements formerly of the company having to have pension [gov't mandated pension plan paper getting ripped]
- 01:34
funds in the first place like they didn't need them anymore wasn't a
- 01:37
requirement additionally the features benefits and the whole notion of
- 01:40
fairness in terms of how the pension fund monies were earned retained vested
- 01:45
into and then distributed well it all had to be written down yes that was like
- 01:49
a new thing back then in a rational logical way so that employees would not [guy writing in binder]
- 01:53
end up being screwed under the yoke of unscrupulous managers in a lousy company
- 01:58
ERISA only exists for corporations that is it's not something that government
- 02:03
uses nor religious organizations nor other structured health things like
- 02:07
workers comp unemployment or disability insurance and all of this only works if
- 02:12
you and your they are in the good ol US of A there is [US map with whoopie cushion business man]
- 02:15
in fact a Somalian corporate retirement plan but we're pretty sure you wouldn't
- 02:20
like it
Related Videos
GED Social Studies 1.1 Civics and Government
What is bankruptcy? Deadbeats who can't pay their bills declare bankruptcy. Either they borrowed too much money, or the business fell apart. They t...
What's a dividend? At will, the board of directors can pay a dividend on common stock. Usually, that payout is some percentage less than 100 of ear...
How are risk and reward related? Take more risk, expect more reward. A lottery ticket might be worth a billion dollars, but if the odds are one in...