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ERISA at 40 – The past puts pension law in perspective

Photo provided courtesy of Drexel University's Earle Mack School of Law

From the Pension Rights Center:

The Employee Retirement Income Security Act ("ERISA"), the law governing private retirement plans, has changed quite a bit since it was signed into law in 1974. There have been numerous amendments, court cases, regulatory actions and other developments. ERISA has had such an impact on Americans' everyday lives that it has become a field of law unto itself.

ERISA buffs frequently come together to explore the law as it is now and to discuss how it impacts current and future retirees. But an in-depth exploration of ERISA's past is a much rarer occurrence. On October 25, 2013, lawyers, actuaries, and other professionals from all corners of the pension world gathered in Philadelphia for a unique, day-long discussion of the history behind the law. The topic? ERISA at 40 - What Were They Thinking? An Oral History of the Employee Retirement Income Security Act.*

The symposium, hosted by Drexel University's Earle Mack School of Law and co-sponsored by the Pension Rights Center and the American College of Employee Benefits Counsel, was organized by Norman Stein and James Wooten. Norman Stein is a Drexel University law professor and PRC Senior Policy Advisor and James Wooten is a professor at SUNY Buffalo Law School and author of The Employee Retirement Security Act of 1974: A Political History. Participants in the symposium represented a Who's Who of ERISA, including Assistant Secretary of Labor of the Employee Benefits Security Administration, Phyllis Borzi, and J. Mark Iwry, Deputy Assistant Secretary of Treasury for Retirement and Health Policy. The symposium also featured several individuals with ties to the Pension Rights Center: PRC Board members Dan Halperin, Regina Jefferson, and Ian Lanoff; Fellows Dianne Bennett, Bill Bortz, Frank Cummings, Bob Nagle, and Henry Rose; and PRC's Director, Karen Ferguson.

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Janell Muhammed

By Janell Muhammad
Social Media Specialist

As PBGC takes part in National Save for Retirement Week, one employee reflects on the generation gap between Boomers and XYs in the quest for a secure retirement.


Working always has been a privilege and an honor for me. From the moment I was legally able, which in my case was the age of 13, I have held a job. As part of my duties, I have perfected the ice cream cone, salted McDonald's world-famous French fries, and advised young ladies on wardrobe choices at Loft. Whether part-time or full-time, after school or on the weekends, as a teenager, work kept me busy.

Today, I work for an agency focused on retirement. Considering the people we serve at PBGC, I pondered what it meant beyond being a federal employee.

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Photo: Academy President-Elect Tom Terry, PBGc CEO Josh Gotbaum, Academy President Cecil Bykerk

Academy President-Elect Tom Terry, PBGC Director Josh Gotbaum, Academy President Cecil Bykerk
Source: American Academy of Actuaries

PBGC Director Josh Gotbaum addressed the American Academy of Actuaries board last week. He applauded the academy's discussion paper, "Risky Business: Living Longer Without Income for Life," and encouraged the group to continue its lifetime income initiative. Gotbaum also discussed PBGC's efforts promoting sound retirement systems, and provided several ideas for how Congress, the public, and employers could each do their part to make sufficient lifetime income a reality.

In August, an analysis by the academy supported the methods used by PBGC to calculate the agency's financial position. "The Pension Committee of the American Academy of Actuaries believes the methods and assumptions used by the PBGC produce a reasonable representation of the PBGC's current obligation and deficit," the group said.

Editor's note: Portions of this blog post were reprinted from This Week with permission from the American Academy of Actuaries.

Collage of images - a photo of the Euro currency symbol, a photo of Australia on a globe, and the Canadian flag

While the U.S. faces a retirement crisis, other countries have implemented programs that provide a better level of economic security in retirement. As compared to the U.S., Australia, Canada, and the Netherlands provide higher retirement income for citizens through social security and universal/quasi-universal employer retirement plans.

These findings are in a new research brief, Lessons for Private Sector Retirement Security from Australia, Canada, and the Netherlands authored by John A. Turner, PhD, Pension Policy Center director, and Nari Rhee, PhD, National Institute of Retirement Security manager of research.

"Americans are struggling to save for retirement," says Rhee. "The typical family has only a few thousand dollars saved. Yet, other advanced countries are doing a far better job of enabling older populations to have economic security in retirement. We hope our research provides insight and ideas for U.S. policymakers working to improve Americans' economic insecurity." Download the full research brief.

The National Institute on Retirement Security originated the content of this post.

  1. Road sign with the words Retirement Ahead.Americans are deeply worried about retirement. Some 85 percent report that they are highly anxious about their retirement prospects. Read The Washington Post article, "Americans anxious about Retirement."
  2. Pensions are highly cost efficient. They can provide a given retirement benefit at about HALF the cost of an individual 401(k) account because pensions pool longevity risk and achieve better returns by investing for the long term. Read the report, "A Better Bang for the Buck: The Economic Efficiencies of Pensions."
  3. Pension benefits provide critical economic stability and accounted for a $1 trillion in economic output. In 2009, pensions supported some 6.5 million jobs. Read the report, "Pensionomics 2012: Measuring the Economic Impact of DB Pension Expenditures."
  4. Pensions reduce the risk of elder poverty and reduce public assistance costs. In 2010, older American households with pension income were nine times less likely to fall into poverty than those who had no pension income. Read the report, "The Pension Factor 2012: The Role of Pensions in Reducing Elder Economic Hardships."
  5. Americans overwhelmingly support Congressional action to provide all Americans with access to a new type of privately run pension plan. More than 90 percent would favor a new pension plan that is available to all Americans that is portable, and provides a monthly check in retirement. Read the report, "Pensions & Retirement Security 2013: A Roadmap for Policy Makers."

The National Institute on Retirement Security originated the content of this post.

Coins in a nest.From Phyllis C. Borzi, Assistant Secretary of Labor for Employee Benefits Security:

Women have made enormous strides over the past three decades, in the workplace and beyond – and it's important to reflect on the men and women who fought for the changes that have led to greater gender equality. One of those changes was introduced 29 years ago: The Retirement Equity Act became law, ushering in important protections for America's workers and their families.

As the assistant secretary for the Employee Benefits Security Administration, one of my chief responsibilities is to oversee the administration and enforcement of Title I of the Employee Retirement Income Security Act of 1974, which sets minimum standards for pension plans.

ERISA was and is an important law that protects the retirement savings of America's workers, but the law's original text had some significant shortcomings, and those shortcomings disproportionately affected women.

ERISA has strict prohibitions against the "alienation of benefits," so that creditors could not claim an employee's pension benefits. But as written in 1974, this also meant that divorced women were unable to obtain their fair share of their ex-husband's retirement benefits – even if a woman had forfeited a career of her own in order to support a husband or raise the couple's children.

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