What does the term "portability" refer to in pension plans under ERISA?

The term "portability" in the context of pension plans under the Employee Retirement Income Security Act (ERISA) specifically refers to the ability to transfer benefits from one retirement plan to another. This feature is crucial for individuals who change jobs throughout their careers, as it allows them to move their accrued benefits without incurring penalties or losing value. Portability ensures that employees can retain their retirement savings and continue to grow them in a new plan, thereby promoting greater security and flexibility in retirement planning.

This aspect is vital because it supports a workforce that may not stay with a single employer for their entire career. By allowing the transfer of benefits, portability helps individuals maintain control over their retirement savings and provides them with options that align with their changing employment situations.