by Judi Willard
In 1974, in an effort to protect employees' pensions, the federal government set minimum standards for voluntarily established retirement and health plans offered by employers. It was called the Employee Retirement Income Security Act of 1974. [ERISA]
As quoted on the government website, “ERISA requires plans to provide participants with plan information including important information about plan features and funding; sets minimum standards for participation, vesting, benefit accrual, and funding; provides fiduciary responsibilities for those who manage and control plan assets; requires plans to establish a grievance and appeals process for participants to get benefits from their plans; gives participants the right to sue for benefits and breaches of fiduciary duty; and, if a defined benefit plan is terminated, guarantees payment of certain benefits through a federally chartered corporation, known as the Pension Benefit Guaranty Corporation (PBGC).”
Also, as quoted on the government website: “In general, ERISA does not cover plans established or maintained by governmental entities, churches for their employees, or plans which are maintained solely to comply with applicable workers compensation, unemployment or disability laws. ERISA also does not cover plans maintained outside the United States primarily for the benefit of nonresident aliens or unfunded excess benefit plans.”
Why was the government left out of this law?
Is it because they know they have a constant source of revenue? A business has to earn its customers and profit, while a government can take it at will while operating in financial darkness.
Maybe the question isn’t why there are two sets of accounting standards. Maybe it should be: Is the government disrespecting my tax dollars by being non-transparent?
Truth in Accounting makes no policy prescriptions past transparent accounting standards so citizens can be knowledgeable participants in the budgeting process.