ERISA

What it means

The Employee Retirement Income Security Act sets the rules for private employer pension, retirement and welfare benefit plans, and it generally overrides conflicting state law.

Its practical effect after a death is that the plan document and the beneficiary designation on file govern. A divorce decree, a will, or a state statute revoking an ex-spouse's designation may simply not reach a plan the Act covers.

Government and church plans are generally outside it, and are governed by their own rules instead.

Why it matters

It is the answer to a frequent and most painful question after a death: the beneficiary form names somebody the family says was not intended, and the will says otherwise. For a covered plan, the form usually wins.

It also sets a claims and appeals process, with deadlines, that a beneficiary refused a benefit has to follow.

When you are likely to meet it

• When a workplace retirement plan pays somebody the family did not expect.
• When a divorce was supposed to have changed a designation.
• When a claim to a plan benefit is refused.

Related terms

• Beneficiary claimThe request a named person makes to an institution to be paid what they were named on. It is not a claim against the estate, and the two are opposites.
• Beneficiary designationA named person on an account or policy who receives it directly on death, without it passing through the will or probate.
• COBRA continuation coverageThe right to keep an employer's health insurance for a period after the event that would otherwise end it — including the death of the employee.
• Designated beneficiaryThe person actually named on an account or policy. In the retirement-account rules it is also a narrower term, and an estate does not qualify as one.
• Inherited IRAA retirement account received from somebody who died, held under rules that differ from an account you opened yourself.
• Pension Benefit Guaranty CorporationThe federal agency that pays pensions when the employer's plan has failed — and holds pensions nobody claimed.
• Qualified domestic relations orderA court order dividing a workplace retirement plan between spouses after a divorce, which the plan must be given in order to act.
• Required minimum distributionThe amount that has to be taken out of a retirement account each year once the rules require withdrawals to begin.
• Survivor annuityA continuing pension payment to a surviving spouse, if that option was chosen when the pension started.

Official sources

The authority this page describes, at the agency that publishes it. Sahvelo does not restate a rule from a secondary source.

• Department of Labor — Employee Benefits Security Administration (opens in a new tab)

Sahvelo guidance that uses this

• Retirement accounts
• Pensions