Retirement Plan Regulation and Compliance: ERISA and the Internal Revenue Code
Two Rulebooks, One Plan
Every qualified retirement plan lives under two overlapping regimes. ERISA governs fiduciary conduct, reporting, disclosure, and claims; the Internal Revenue Code governs tax qualification through Code sections 401(a), 410, 411, 415, and 401(k). A plan can satisfy the Code and still breach ERISA, and vice versa. Questions frequently test whether a defect is a qualification failure (corrected through the IRS Employee Plans Compliance Resolution System) or an operational fiduciary breach (remedied under ERISA and Department of Labor programs).
Core Qualification Requirements
Know the minimum standards: exclusive benefit rule, minimum coverage under 410(b), minimum vesting schedules under 411(a), accrued benefit nonforfeiture, joint and survivor annuity rules under 417, top-heavy rules under 416, and the 415 annual addition limits. ERISA adds minimum funding for defined benefit plans under Title IV, bonding under section 412, and summary plan description delivery rules.
Traps to Watch
- Confusing ERISA title jurisdiction: Title I (Labor), Title II (Treasury/Code), Title IV (PBGC).
- Assuming a governmental or church plan is fully ERISA-covered; both have significant exemptions.
- Treating a 401(k) deferral as an employer contribution for deduction and testing purposes.
- Missing that ERISA preemption is broad but does not displace state insurance regulation of insured plans (savings clause).
Rule of Thumb
Ask two questions in sequence: Is the arrangement an ERISA plan (a plan, fund, or program established by an employer for employees)? If yes, is it also a tax-qualified plan? Answer both before analyzing any specific rule.