Arkansas Life and Health Insurance Practice Exam

ERISA sets ________ standards for pension plans in private industry.

1. Basic

2. Maximum

3. Minimum

4. Typical

The correct answer is: Basic

ERISA, the Employee Retirement Income Security Act, sets basic standards for pension plans in private industry. This federal law establishes guidelines for employers who offer pension and welfare benefit plans to their employees. The main purpose of ERISA is to protect the interests of employees who participate in these plans by ensuring transparency, accountability, and fiduciary responsibility on the part of plan administrators. The word "basic" accurately describes the nature of the standards set by ERISA, making it the correct answer.