Which of the following is exempt from ERISA?

Which of the following is exempt from ERISA?

• A. Government plans
• B. Certain church plans
• C. Plans subject to state law including workers' compensation, disability, and unemployment
• D. Unfunded payroll practices

Answer: (C)

ERISA applies to most private-sector employee benefit plans, but plans that are regulated and governed by state law are not under ERISA. When a benefit is mandated or administered under state statutes—such as workers’ compensation, state unemployment insurance, and state disability programs—the framework is state-based, not ERISA-based. Because of this, these plans are exempt from ERISA's federal protections and requirements, which is why the option describing plans subject to state law—including those types of benefits—is the correct exemption. Note that other common exemptions exist (like government plans or certain church plans) for different reasons, and unfunded payroll practices aren’t formal ERISA plans either since there’s no ERISA-governed trust involved. The key idea is that state-law regulated plans operate outside ERISA’s scope.

ERISA applies to most private-sector employee benefit plans, but plans that are regulated and governed by state law are not under ERISA. When a benefit is mandated or administered under state statutes—such as workers’ compensation, state unemployment insurance, and state disability programs—the framework is state-based, not ERISA-based. Because of this, these plans are exempt from ERISA's federal protections and requirements, which is why the option describing plans subject to state law—including those types of benefits—is the correct exemption.

Note that other common exemptions exist (like government plans or certain church plans) for different reasons, and unfunded payroll practices aren’t formal ERISA plans either since there’s no ERISA-governed trust involved. The key idea is that state-law regulated plans operate outside ERISA’s scope.