Investment Company and Variable Contracts Products Representative (Series 6)Practice Exam

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What does ERISA stand for?

Employee Retirement Income Security Act
Emergency Retirement Income System Act
Employer's Retirement Insurance Security Act
Employee Regulation for Income Security Act

The correct answer is: Employee Retirement Income Security Act

The correct answer is "Employee Retirement Income Security Act." ERISA is a federal law enacted in 1974 that sets standards for pension and health plans in the private industry, ensuring that plan fiduciaries do not misuse their position and that participants in these plans are protected. One of ERISA's primary goals is to provide employees with information about their retirement and health benefits, including how those benefits are funded and the obligations of the plan administrators. The other options presented do not accurately reflect the contents or intent of ERISA. For instance, "Emergency Retirement Income System Act" conveys a sense of urgency not present in the law and is not a recognized term associated with retirement plans. Similarly, "Employer's Retirement Insurance Security Act" and "Employee Regulation for Income Security Act" misinterpret the scope and purpose of ERISA, which focuses on the protection of employee benefits rather than regulatory compliance. Hence, "Employee Retirement Income Security Act" is the only option that correctly identifies and encapsulates the legislation's purpose and significance.