FYI Auditing Employee Benefit Plans - Vesting Requirements—ERISA establishes specific minimum vesting standards for pension plans; pension plans may vest more quickly than these requirements, but they cannot vest less quickly. [Note: Benefits are “vested” when the employee has earned the rights to those benefits without any further performance requirements or conditions.]

Funding Requirements—“Qualified” pension plans (those having tax-exempt status) are subject to specific funding requirements; welfare plans are not required to be funded, although plan documents typically do address funding issues. Exemptions from ERISA—ERISA provides certain specific exemptions from some or all of ERISA, but the auditor is not responsible for determining whether a plan is subject to ERISA requirements or whether the plan must be audited (although the auditor may, of course, assist in determining those matters); the plan sponsor's legal counsel should be involved in those determinations.