ERISA Law

ERISA Covered Accounts

For all intents and purposes, an ERISA covered account is any account established by an employer for an employee that is designed to defer income until termination of employment, death, disability or attainment of a given age, or intended to defray the cost of life, health, or other welfare benefits.

The following accounts are subject to ERISA policies and procedures:

• Retirement plans covering more than one employee.
• Pension plans covering more than one employee.

   

• Profit sharing plans covering more than one employee.

   

• 401k plans covering more than one employee.

   

• Welfare benefit plans covering more than one employee.

   

• SIMPLE IRA (covering more than one employee).

There are exceptions for certain church and governmental employee benefit plans and certain deferred compensation plans for managerial or highly compensated employees.

However, these are typically subject to similar rules under the IRC, UPIA, UMIFA and other state or local statutes. IRA that are not part of a SIMPLE Plan or a simplified employee pension plan (SEP) and retirement plans covering only self-employed individuals alone or with their spouses (i.e., a "one-person Keogh plan") are also not "plans" for ERISA purposes.

However, the ERISA Prohibited Transaction Rules apply to IRA, SEP IRA, and Keoghs under certain provisions of the IRC.