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

What entity was granted jurisdiction over private pension plans by ERISA?

1. The U.S. Government

2. The Department of Labor

3. The Securities and Exchange Commission

4. The Internal Revenue Service

The correct answer is: The U.S. Government

The correct answer is that the Department of Labor was granted jurisdiction over private pension plans by the Employee Retirement Income Security Act (ERISA). ERISA, enacted in 1974, was designed to protect the assets of millions of Americans enrolled in employer-sponsored retirement plans. It established standards for the management and operation of these plans, including reporting and disclosure requirements to ensure that participants are informed about their benefits and rights. The Department of Labor is responsible for enforcing these standards, which include overseeing pension and health benefit plans to ensure they adhere to ERISA's consumer protection regulations. This oversight is crucial to safeguarding the financial security of the beneficiaries of these plans, ensuring that pension funds are managed responsibly and that participants receive their promised benefits upon retirement. While the U.S. Government as a whole is involved in the overarching framework of laws and regulations, it is the Department of Labor that specifically handles the jurisdiction related to ERISA and private pension plans. Other entities like the Securities and Exchange Commission and the Internal Revenue Service have roles in regulation and tax compliance, but ERISA explicitly places the Department of Labor in charge of the administration and enforcement of rules concerning private pension plans.