Employee Retirement Income Security Act (ERISA)

Definition:

US Employee Retirement Income Security Act of 1974, which established legal guidelines for private pension plan administration and investment practices, including regulations relating to plan funding, participation, vesting, termination, disclosure, federal tax treatment, and fiduciary responsibility of plan administrators.

In the context of capital markets transactions, ERISA can impact: (i) transaction documentation regarding issuers giving assurances to underwriters that they are exempt from the ERISA regime, as well as (ii) transactions being structured to exclude ERISA investors in order to avoid issuers becoming subject to the ERISA regime.

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