Checklist: Ensuring compliance with the Employee Retirement Income Securities Act (ERISA) (USA)

Introduction

This checklist assists in-house counsel, private practice lawyers, and human resource departments to ensure compliance with the Employee Retirement Income Securities Act of 1974 (ERISA).

This checklist addresses the following steps:

1. Understanding ERISA essentials
2. Understanding the main disclosure requirements
3. Understanding the main reporting requirements
4. Understanding the main fiduciary responsibilities in administering plans
5. Understanding the main claims procedure requirements

The checklist is presented as a list of requirements that can be checked off as they are addressed. At the end of the document, there are explanatory notes corresponding to each requirement in the checklist.

This checklist can be read in conjunction with the following How-to guides: Overview of US employment law (USA) and How to understand and comply with wage and hour laws (USA).

Step 1 – Understand ERISA essentials

Step 2 – Understand the main disclosure requirements

Step 3 – Understand the main reporting requirements

Step 4 – Understand the main fiduciary responsibilities in administering plans

Step 5 – Understand the main claims procedure requirements

Legal framework and key considerations

ERISA (29 USC Ch 18) governs private sector employers who provide certain benefits to their employees. The law does not oblige employers to provide specific benefits; however, it requires those that do offer such benefits to manage the related plans responsibly and transparently. It does so by imposing, among other things, extensive reporting and disclosure obligations for employers. ERISA’s requirements vary depending on the exact type of plan involved, and these requirements implicate several different federal agencies.

ERISA explicitly pre-empts ‘any and all state laws’ to the extent that such laws ‘relate to’ employee benefit plans. The US Supreme Court has since held that a law ‘relates to’ an employee benefit plan if it has ‘a connection with’ or makes ‘reference to’ such a plan. See Rutledge v Pharmaceutical Care Management Ass’n, 592 US 80 (2020). However, determining the exact meaning of such broad language has proven difficult for courts.

Even without considering the pre-emption issue, the law – which is implemented via multiple regulations – is complex. As a result, it is highly advisable for employers to seek specialized legal counsel to ensure compliance.

Step 1 – Understand ERISA essentials

1.1 Understand the purpose of ERISA

The purpose of ERISA is to protect the interests of employee benefit plan participants and their beneficiaries. Section 3 of ERISA provides the definitions listed below.

• ‘Employee benefit plan’ – an employee welfare benefit plan or an employee pension benefit plan (or a hybrid of the two).
• ‘Participant’ – any employee or former employee of an employer, or any member or former member of an employee organization, who is or may become eligible to receive a benefit of any type from an employee benefit plan which covers employees or members, or whose beneficiaries may be eligible to receive any such benefit.
• ‘Beneficiary’ – a person designated by a participant, or by the terms of an employee benefit plan, who is or may become entitled to a benefit.

ERISA protects the interests of plan participants and beneficiaries by imposing certain obligations on private sector employers who provide benefit plans to their employees, as well as on the managers and trustees of those plans.

1.2 Understand what types of entities and plans are covered

ERISA applies to private sector employers that provide benefit plans to their employees. This includes most non-profit organizations. Although the Act’s full title refers only to retirement, ERISA’s coverage is broader, and it imposes requirements regarding private pension plans and so-called ‘welfare benefit plans.’ These include health plans as well as additional benefit plans, such as those providing life and disability insurance.

1.2.1 Retirement plans

With respect to retirement plans, the law covers both ‘defined benefit’ plans and ‘defined contribution’ plans (see Department of Labor website: Types of Retirement plans for further information).

Defined benefit plans provide a specific monthly benefit during retirement. The monthly amount is either explicitly stated or based on a set formula which typically reflects a certain percentage of the salary earned by the employee during employment.

Defined contribution plans, by contrast, commit the employee, employer, or both, to make contributions to an employee’s retirement account. The contributions are then invested. The value of the account will fluctuate, according to the performance of the investments. Defined contribution plans include 401(k) plans, 403(b) plans, profit-sharing plans, and employee stock ownership plans (ESOPs).

In 2022, Congress passed the SECURE Act 2.0, which made several changes to retirement plans, including expanding access to automatic enrollment and increasing catch-up contribution limits.

On April 3, 2025, the Department of Labor’s Employee Benefits Security Administration (EBSA) issued a new Field Assistance Bulletin (FAB 2025-02). That Bulletin describes the changes to the Annual Funding Notice (AFN) requirements for defined benefit plans. These changes were put in place pursuant to the SECURE 2.0 Act. They take effect for plan years starting after December 31, 2023. The new guidance provides updated model notices that plan administrators can use to ensure their compliance with the law. According to the Bulletin, single-employer plans no longer need to report their funding threshold and actuarial values or include ’at-risk’ disclosure requirements. Instead, they must now report the ’percentage of plan liabilities funded,’ which is the ratio of the plan’s fair market value to the value of its liabilities at the end of the year.  

The Bulletin also details updated deadlines and reporting standards for different plan sizes. For example, large plans must furnish their SECURE-compliant AFN by April 30, 2025, for the 2024 calendar plan year. Small plans have until the earlier of their Form 5500 filing date or its extended deadline to report. Large plan administrators can use reasonable estimates for their current-year participant and beneficiary counts, but they must provide the actual numbers from the two preceding years. In contrast, small plans cannot use estimates at all. The guidance also clarifies that plan administrators can no longer rely on previous model AFNs and instead must use the updated models provided in FAB 2025-02 to remain in compliance.
 

1.2.2 Private sector health plans

Most private sector health plans are covered by ERISA. These include health maintenance organization (HMO) plans and flexible spending accounts (FSAs). Exceptions are narrow. ERISA does not apply to governmental health plans or those maintained for church employees. It also does not apply to plans that are maintained solely to comply with applicable workers’ compensation, unemployment, or disability laws.

Additional benefits, including various forms of insurance for accidents or death, and miscellaneous benefits, including scholarship funds or holiday pay, are also covered (see 29 USC section 1002).

1.2.3 Plan administrators

Benefit plan administrators include the individual or entity in charge of managing the plan for the sole benefit of participants and their beneficiaries. They are also responsible for keeping the plan in compliance. Administrators may be designated under the plan or assigned to the title of administrator based on their role as the plan sponsor. The plan sponsor is either the employer, the employee organization, or, in the case of a plan maintained by two or more employers or organizations, the association, committee, or board of trustees. Investment managers are responsible for protecting the assets held by benefit plans.

Plan administrators and managers, and anyone else who has discretionary control or authority over plan management, assets, investment, or administration are subject to fiduciary duties. For more information regarding fiduciary duties related to benefit plans, see section 4.1 below.

1.3 Understand which regulatory agencies enforce ERISA

Three entities administer and enforce ERISA:

• the Employee Benefits Security Administration (EBSA), part of the Department of Labor;
• the Internal Revenue Service (IRS); and
• the Pension Benefit Guaranty Corporation (PBGC).

The Department of Labor administers Title I of the law, which spells out rules for reporting and disclosure, vesting, participation, funding, fiduciary conduct, and civil enforcement.

The IRS administers Title II, which relates to the standards that must be met by employee retirement benefit plans in order to qualify for favorable tax treatment.

Title III, which focuses on jurisdictional issues, addresses the coordination of enforcement and regulatory activities by the Department of Labor and the IRS.

The PBGC administers Title IV, which covers the insurance of defined benefit pension plans.

1.4 Understand the possible penalties for non-compliance

An employer may be in violation of ERISA where the employer is shown to have engaged in certain types of transactions with the plan. Prohibitions against such transactions exist because certain parties in interest (including employees with an employee benefit plan or their relatives, employers with employees covered by an employee benefit plan, and individuals providing services to an employee benefit plan) have a greater ability to potentially exercise improper influence over the plan. Some examples of prohibited transactions include:

• a sale, lease, or exchange made between the plan and a party in interest;
• the lending of money or extension of credit between the plan and a party in interest; and
• the furnishing of goods, facilities, or services between the plan and a party in interest.

Violations of ERISA can incur penalties for employers. The EBSA alone can impose various penalties, including civil penalties. For example, a party in interest who engages in a prohibited transaction with respect to either an employee welfare benefit plan or a non-qualified pension plan is subject to a two-tiered civil penalty: the first tier is capped at 5% of the amount involved, while the second can amount to up to 100% of the amount involved (but only applies where an agency order does not prompt corrections within 90 days).

ERISA also provides for criminal penalties. For example, willfully violating disclosure or reporting requirements regarding retirement plans can result in fines of up to $100,000 for individuals (and up to $500,000 for entities), as well as imprisonment for up to 10 years.

Plan managers and administrators can also be subjected to legal action based on breaches of their fiduciary duty. This can occur, for example, when plan participants incur losses, but may also be based on improperly received profits.

Step 2 – Understanding the main disclosure requirements

The following is a non-exhaustive list of some of the main disclosures required by ERISA. For a brief overview chart of these and other disclosure requirements, see the guide issued by the Department of Labor in 2022.

2.1 Is a Summary Plan Description (SPD) required?

The Summary Plan Description (SPD) is considered the ‘primary vehicle’ for informing the participants and beneficiaries of retirement and welfare benefit plans about their plan and how it operates. The SPD must be ‘sufficiently comprehensive’ to apprise covered persons of their benefits, rights, and obligations under the plan, but must also be written in a way that an ‘average participant’ would understand. The SPD must typically be provided within 90 days after someone is first covered by a plan or receives benefits thereunder.

CIGNA Corp. v Amara et al. 563 U.S. 421 (2011) illustrates this point. When CIGNA converted its pension plan to a cash balance plan, it issued an SPD. Janice Amara sued, alleging CIGNA violated ERISA's notice and SPD requirements. The lower courts ruled in Amara's favor, finding the SPD misrepresented the plan. The Supreme Court, however, held that while a district court cannot reform a pension plan under ERISA Section 502(a)(1)(B), it can do so under Section 502(a)(3), which allows for a court to grant ’other appropriate equitable relief.’

2.2 Is a Summary of Material Modification (SMM) required?

Plan administrators must provide a summary description of any material modification (SMM) to a plan and any change in the information required to be included in the SPD to participants and pension plan beneficiaries receiving benefits. This must be provided within 210 days after the end of the plan year in which the change is adopted.

2.3 Is a Summary Annual Report (SAR) required?

The Summary Annual Report (SAR) provides a narrative summary of the annual financial report (Form 5500), which is explained in more detail under step 3 below. Plan administrators required to file Form 5500 must automatically give participants and pension plan beneficiaries a copy of the SAR each year, usually within nine months after the end of the plan year.

2.4 Must the plan documents be disclosed?

Sometimes a plan participant or beneficiary will request plan-related documents from the plan administrator. ERISA obliges the administrator to provide copies of certain documents, including the latest updated summary, plan description, annual report, or any other instruments under which the plan is established or operated (see 29 USC section 1024). The administrator may charge a reasonable fee to cover the cost of providing the copies. Failing to provide them can trigger personal liability for the administrator, with penalties imposed per day for each violation.

Step 3 – Understanding the main reporting requirements

3.1 Must a form from the ‘Form 5500 Series’ be filed?

The Form 5500 Series was jointly developed by the Department of Labor, IRS, and PBGC. It serves to satisfy annual reporting requirements under Title I and Title IV of ERISA and under the Internal Revenue Code. The reporting obligation applies to plan administrators and select ‘direct filing entities.’

The Series includes Form 5500 and, for small plans, Form 5500-SF. ‘Small plans’ are generally defined as those with under 100 participants at the beginning of the plan year. A special form (Form 5500-EZ) is also available for one-participant retirement plans and certain foreign plans required to file an annual return. All forms are required to be filed electronically.

The 2022 guide issued by the Department of Labor summarizes the main requirements (see page 21 of the guide), and notes that the respective instructions for the various forms (available here) help to clarify which entities must report and which forms and supplemental documentation are needed.

Gobeille v. Liberty Mut Ins Co 577 US 312 (2016), illustrates an important aspect of the reporting requirements. Liberty Mutual operated a self-insured health plan. It  challenged in court a Vermont law that required health plans to submit claims data to the state. Liberty Mutual argued that ERISA preempted the state law. The Supreme Court agreed, in a 6-2 decision. The Court held that ERISA's broad preemption clause prevents states from imposing reporting requirements that interfere with nationally uniform plan administration. Justice Kennedy, who wrote for the majority of the members of the Court, emphasized that ERISA's reporting rules are integral to the law’s framework.

3.2 Must anything be reported to the Internal Revenue Service?

Retirement plans are required to file certain forms and reports with the IRS and the Department of Labor. Additionally, retirement plans must send notices to plan participants and certain others (eg, beneficiaries and alternate payees). As the IRS notes, the reporting and disclosure requirements will differ depending on the type of plan and the circumstances of the plan. In 2020, the IRS issued a publication (updated in 2025) outlining basic reporting and disclosure requirements for retirement plans under the Internal Revenue Code (IRC) and provisions of ERISA administered by the IRS.

3.3 Must anything be reported to the Pension Benefit Guaranty Corporation?

The PBGC administers the provisions of ERISA relating to defined benefit pension plans (Title IV of the law). These entail specific reporting and disclosure requirements. The Department of Labor’s guide briefly outlines these (see page 17 of the guide), with a focus on single-employer plans. The guide addresses pension insurance premiums, with requirements applying to both covered single-employer and multi-employer defined benefit plans. It also outlines obligations relating to standard terminations (ie, terminations in which the plan contains sufficient funds to pay all benefits owed), distress terminations (ie, terminations in which the plan does not contain sufficient funds to pay all benefits owed), and reportable events and other reports, which apply only to covered single-employer defined benefit plans.

The PBGC website provides a helpful overview on reporting requirements relating to so-called ‘reportable events’ – events that could jeopardize a plan sponsor’s ability to continue a pension plan. The information provided includes a checklist for small plans (plans with 100 or fewer participants).

Step 4 – Understanding the main fiduciary responsibilities in administering plans

4.1 Does the role entail fiduciary responsibilities?

ERISA imposes fiduciary responsibilities on certain individuals and entities to ensure that the plan’s assets are managed responsibly and in the best interests of the plan participants and beneficiaries. It imposes such responsibilities on persons or entities:

• who exercise discretionary control or authority over plan management or plan assets;
• who have discretionary authority or responsibility for administering a plan; or
• who provide investment advice, or have any authority or responsibility to do so, to a plan for compensation.

Plan fiduciaries include, for example, plan trustees, plan administrators, and investment managers or members of a plan’s investment committee (see 26 USC section 4975). As fiduciaries, they can be held personally liable for breaches of their responsibilities, obligations, or duties (see 29 USC section 1109). By contrast, those individuals with purely administrative roles, such as certain human resources staff, are typically not considered fiduciaries.

The IRS has also issued guidance on the fiduciary responsibilities of plan administrators that help ensure that administrators are in compliance with their duties.

4.2 Does the fiduciary run the plan solely in the interests of the participants and beneficiaries?

ERISA spells out certain duties required of fiduciaries (see 29 USC section 1104). A central requirement is for fiduciaries to act solely in the interests of participants and beneficiaries, with the exclusive purpose of providing benefits and paying plan expenses. This is sometimes referred to as the duty of loyalty.

In addition, fiduciaries must carry out their activities with care, skill, prudence, and diligence. This duty to act prudently includes investing in a way that minimizes the risk of large losses – typically by diversifying the plan’s investments.

On November 22, 2022, the DOL issued a Final Rule emphasizing that ERISA plan managers must make investment decisions that focus on risk and return, and must not be swayed by unrelated factors that could hurt returns or increase risks.

Fiduciaries are also required to follow the terms of the plan documents, if these are consistent with ERISA. Relevant documents include the plan document, Summary Plan Description, trust agreement, investment management agreements, and investment policies. Fiduciaries must also avoid conflicts of interest. This means that they must avoid transactions that benefit parties related to the plan (eg, services providers or the plan sponsor). Note that both ERISA and the Internal Revenue Code also explicitly prohibit certain transactions involving ‘parties in interest,’ which include fiduciaries. For more information on both who qualifies as a fiduciary and on their duties of care, see the 2021 guide published by the Department of Labor.

Step 5 – Understanding the main claims procedure requirements

ERISA requires every employee benefit plan to provide adequate, written notice to participants or beneficiaries whose claims for benefits under a plan have been denied (see 29 USC section 1133). The notice must set out the ‘specific reasons’ for the denial and be written in an understandable manner. It must also provide participants with ‘reasonable opportunity’ for a ‘full and fair review’ of the denial. The DOL has issued helpful guidance - see 2024 Advisory Council on Employee Welfare Benefit Plan Claims and Appeals Procedures.

5.1 Have reasonable procedures for filing benefit claims, notifying participants of determinations, and appealing adverse determinations been established and maintained?

Regulations issued by the Department of Labor implement, and elaborate on, the statutory requirements under ERISA. They require all employee benefit plans to establish and maintain reasonable procedures for filing benefit claims, notifying participants of benefit determinations, and appealing adverse benefit determinations.

The regulations specify under what conditions such claims procedures will be deemed ‘reasonable,’ including the following non-exhaustive list of requirements:

• the SPD must include a description of all claims procedures and the applicable time frames;
• the procedures may not include provisions, or be administered in a way that unduly inhibits or hampers pursuing a claim (eg, by charging a fee for doing so);
• the procedures must allow for an authorized party to act on behalf of a claimant; and
• processes and safeguards must be in place to ensure that claim determinations are made in accordance with governing plan documents and, where appropriate, applied consistently to similarly situated claimants.

5.2 Have participants been notified of these procedures?

In addition to maintaining certain procedures as outlined at 5.1 above, it is also vital for plan administrators (including employers serving as administrators) to comply with applicable requirements when determining claims and notifying claimants of decisions. These requirements include rules regarding the timing, manner, and content of decisions and the notifications of decisions to claimants. The applicable rules vary depending on what kind of plan is involved.

For example, in terms of timing, the regulation separately sets out requirements for claims regarding retirement plans, welfare plans, group health plans, disability plans and others (such as life insurance) (see 29 CFR section 2560.503-1). Pursuant to these requirements, initial decisions regarding retirement plan claims must generally be issued within 90 days (but this can be extended under special circumstances). By contrast, urgent care claims based on group health plans must be decided within 72 hours, at the very latest.

In terms of content, adverse decisions must, among other requirements:

• set out the specific reasons for the determination;
• refer to the specific plan provisions on which they are based;
• describe any additional information the claimant could add to perfect their claim;
• spell out available review procedures (including applicable time limits); and
• state that the claimant has a right to file a civil suit following an adverse determination on appeal.

This information must be provided in a manner ‘calculated to be understood’ by claimants.

5.3 Has a ‘full and fair’ review been offered for adverse determinations on appeal?

ERISA’s regulations also require every employee benefit plan to establish and maintain a procedure for appealing adverse benefit determinations. The procedure must provide for ‘a full and fair’ review of the claim and the adverse benefit determination (see 29 CFR section 2560.503-1(h)).

To satisfy this requirement, the appeals procedures must, among other requirements:

• provide claimants with at least 60 days to appeal (with longer time frames specified for specific plans);
• give claimants the opportunity to submit written comments and other information;
• give claimants reasonable access, free of charge, to information relevant to their claim; and
• provide for a review that takes into account all comments and information, regardless of whether this was taken into consideration with respect to the initial claim.

5.4 Have participants been notified of their right to sue in court to resolve appeals?

In addition to an internal review of initial adverse benefit determinations, claimants also have a right to bring a civil action following an adverse benefit determination on review (see 29 USC section 1132). As noted, claimants must be informed of this right in the initial adverse determination.

Additional resources

Department of Labor, Fiduciary Responsibilities (2022)
Department of Labor, Reporting and Disclosure Guide for Employee Benefit Plans (2022)
Internal Revenue Service, Retirement Plan Reporting and Disclosure Requirements (2025)
Department of Labor, Meeting Your Fiduciary Responsibilities (2021)

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