ShmoopTube

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finance a la shmoop what is ERISA ERISA

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wasn't that the actress Milano or something from charmed and maybe not

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well ERISA actually stands for Employee Retirement Income Security Act

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yeah next name there which was lovingly created by yes the Nixon clan in 1974 [picture of President Nixon]

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about a week after Watergate it essentially established minimum

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standards or guidelines for pension plans in the United States and believe

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it or not before this act companies essentially did not have to disclose to

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their employees how well or poorly their pension investments had been doing all

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along the way sort of a hidden set of numbers until well one day the [pension papers going into a filing cabinet]

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beneficiary retired and was more or less cashed out well here's what you got good [older guy casting a fishing rod]

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luck have fun in your two and a half years of expected lifetime after [$50 check passing hands]

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retirement weirdly pension funds were actually

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managed by the corporation that made whoopee cushions or whatever they made

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because of course it assumed that if it was great at making whoopee cushions [whoopie cushions in a production line]

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well then it would also be great at buying and selling stocks in the global [stock floating across world map]

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stock market marketplace yeah not so much

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so specifically ERISA codified or structured the way in which pension

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funds are created and managed in the United States it made them voluntary

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that is you are no longer forced to save money in a structure in which the [money going into piggy bank]

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company managed your retirement savings and by the same token it did away with

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the government's requirements formerly of the company having to have pension [gov't mandated pension plan paper getting ripped]

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funds in the first place like they didn't need them anymore wasn't a

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requirement additionally the features benefits and the whole notion of

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fairness in terms of how the pension fund monies were earned retained vested

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into and then distributed well it all had to be written down yes that was like

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a new thing back then in a rational logical way so that employees would not [guy writing in binder]

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end up being screwed under the yoke of unscrupulous managers in a lousy company

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ERISA only exists for corporations that is it's not something that government

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uses nor religious organizations nor other structured health things like

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workers comp unemployment or disability insurance and all of this only works if

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you and your they are in the good ol US of A there is [US map with whoopie cushion business man]

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in fact a Somalian corporate retirement plan but we're pretty sure you wouldn't

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like it

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