What Does Welfare And Pension Plans Disclosure Act Mean?
The Welfare and Pension Plans Disclosure Act (WPPDA) is legislation meant to increase transparency in the management of employee benefit plans of private companies. Passed in 1950, it gives authority and control to the U.S. Labor Department to check private retirement funds by requiring employers to provide relevant details and financial documents. The law aims to make sponsors more accountable to the participants and beneficiaries to prevent fund misuse.
Insuranceopedia Explains Welfare And Pension Plans Disclosure Act
This U.S. legislation requires the Labor department to file information about all pension plans with more than 25 employees participating. Moreover, pension plans with 25 to 100 employees require a detailed description. What's more, those with more than 100 employees need financial reports filed every year in addition to plan details. In 1962, the WPPDA was amended to increase its regulatory power over the plans to include the power to investigate. With its replacement by ERISA, the new law adopts certain standards of fiduciary duty to protect the plan's funds from mismanagement and thus be able to provide increased benefits to its participants.