Employee Retirement Income Security Act of 1974: Difference between revisions

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Employee Retirement Income Security Act of 1974 (view source)

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-Be afraid. Be very afraid.
+{{g}}Be afraid. Be very afraid.
-See also
+The [[Employee Retirement Income Security Act]] of 1974 ([[ERISA]]) (Pub.L. 93–406, 88 Stat. 829, enacted September 2, 1974, codified in part at 29 U.S.C. ch. 18) is a United States federal law which establishes minimum standards for pension plans in private industry and provides for extensive rules on the federal income tax effects of transactions associated with employee benefit plans. [[ERISA]] was enacted to protect the interests of employee benefit plan participants and their beneficiaries by:
+*Requiring the disclosure of financial and other information concerning the plan to beneficiaries;
+*Establishing standards of conduct for plan fiduciaries;
+*Providing for appropriate remedies and access to the federal courts.
+*[[ERISA]] is sometimes used to refer to the full body of laws regulating employee benefit plans, which are found mainly in the [[Internal Revenue Code]] and {{tag|ERISA}} itself.
+===[[Plan assets]]===
+[[ERISA]] can get you in its clutches even if you aren’t (knowingly) an [[ERISA]] plan.
+===Investment vehicles===
+''Be extra-specially warned: this is the untutored ramblings of a one who is not even a US attorney let alone an [[ERISA attorney]]''
+====[[Close out]] ====
+If there is more than a certain percentage of {{tag|ERISA}} plan money (or money from other non-{{tag|ERISA}} Government retirement plans with similar legislation) in a fund, it becomes itself subject to {{tag|ERISA}} regulations, particularly penal tax and investor protection provisions, ''and also provisions affecting the ordinary winding up of the fund and therefore [[netting]]''.
+While some people will loosely talk of a “look-through” to the underlying fund it doesn’t seem right that you would look through the [[close out]] [[netting]] of a separate [[Fund]] legal entity to view the insolvency scenario of an underlying {{tag|ERISA}} investor – particularly since the underlying investor will by no means necessarily itself be insolvent, just because a legally distinct fund it had invested in had blown up.
+It seems more likely that by dint of its {{tag|ERISA}} investment, the sleeve fund itself would be deemed subject to {{tag|ERISA}} and therefore {{tag|ERISA}} might intervene in the Fund's insolvency.
+In any case in the UK the [[netting]] analysis depends on the good old fashioned [[corporate veil]]: Unless there is a reason ([[fraud]] etc.) to lift the veil and treat the proximate corporate entity (the Fund) as a sham, the corporate veil will not be lifted under English law: the fact that there is just one investor in the company is very clearly no reason to lift the veil in itself (else the majority of all corporate veils would be lifted). (I would have said exactly the same would apply in the US – but as per above happy to stand corrected)
+There are no special rules applying to UK pension plans akin to ERISA that would change that (if what you say below is true) and nor is there an equivalent to the ERISA’s “contribution percentages”.
+The credit/trading risk analysis would also be directed at the assets in the fund. There will be no recourse beyond them and [[I]] can’t see how the characterisation of the person contributing those assets in return for a structurally [[subordinated]] equity stake could make any difference, either in the UK or in the US.
+{{erisa netting}}
+{{sa}}
+*[[Safe harbor]]
 *[[Pension Fund]]
 *[[ERISA Reps]]
+*[[Qualifying Professional Asset Manager]] ([[QPAM]])
+*[[Indicia of ownership]] where you have a non-US investment manager.
+{{c2|US Securities Regulation|Insolvency}}
+{{ref}}