What is a core requirement of ERISA for employee retirement plans?

A core requirement of the Employee Retirement Income Security Act (ERISA) for employee retirement plans is that they must be adequately funded and provide necessary disclosures. ERISA was enacted to protect the interests of employee benefit plan participants and their beneficiaries, ensuring that plans are managed responsibly and transparently.

Adequate funding is crucial because it ensures that the plan has sufficient assets to meet its obligations to participants upon retirement or separation from service. This requirement helps prevent plans from becoming underfunded, which could jeopardize the financial security of employees relying on those funds.

Additionally, disclosure is an essential component of ERISA. Plans must provide participants with comprehensive information about the plan's features, funding, and financial status. This transparency is meant to empower employees to make informed decisions regarding their retirement savings.

In contrast, the other options do not reflect ERISA’s core requirements. Guarantees of returns are not a requirement under ERISA; plans can have varying levels of investment risk. The stipulation that plans must only invest in government bonds is overly restrictive and not a reflection of ERISA’s guidelines, which allows for diverse investment options. Finally, while plans have specific rules regarding the withdrawal of funds, ERISA does not mandate that participants can withdraw funds at any time,