The HR Legal News Blog

ERISA at Forty

On September 2, 1974, just weeks after assuming office in the aftermath of the Watergate scandal, Gerald Ford signed the bill that would become ERISA.   President Ford predicted “a brighter future for almost all the men and women of our labor force” and invited the country to celebrate the first steps towards “bring[ing] some order and humanity” into the private pension system.

Forty years later, it’s easy to take for granted the “order and humanity” which ERISA introduced into the world of employee benefits.  Indeed, we have become  so accustomed to receiving myriad summary plan descriptions, fee disclosures, notices to interest parties and the like that we have forgotten a time when neither information about our benefits nor the ability to enforce our rights to those benefits could be taken for granted.  For all its flaws–and who could doubt their existence?–ERISA has indeed helped to secure retirement income and other benefits for many American workers.

Here’s a section of ERISA that is unlikely to grab your attention on a day-to-day basis.  In celebration of ERISA’s 40th birthday and all that the statute has meant to American workers over the past four decades, take a minute to read Section 1 of ERISA.

ERISA, Section 1:

(a) Findings.  The Congress finds that—

(1) single-employer defined benefit pension plans have a substantial impact on interstate commerce and are affected with a national interest;
(2) the continued well-being and retirement income security of millions of workers, retirees, and their dependents are directly affected by such plans;
(3) the existence of a sound termination insurance system is fundamental to the retirement income security of participants and beneficiaries of such plans; and
(4) the current termination insurance system in some instances encourages employers to terminate pension plans, evade their obligations to pay benefits, and shift unfunded pension liabilities onto the termination insurance system and the other premium-payers.

(b) Additional findings.  The Congress further finds that modification of the current termination insurance system and an increase in the insurance premium for single-employer defined benefit pension plans—

(1) is desirable to increase the likelihood that full benefits will be paid to participants and beneficiaries of such plans;
(2) is desirable to provide for the transfer of liabilities to the termination insurance system only in cases of severe hardship;
(3) is necessary to maintain the premium costs of such system at a reasonable level; and
(4) is necessary to finance properly current funding deficiencies and future obligations of the single-employer pension plan termination insurance system.

(c) Declaration of policy.  It is hereby declared to be the policy of this title—

(1) to foster and facilitate interstate commerce;

(2) to encourage the maintenance and growth of single-employer defined benefit pension plans;
(3) to increase the likelihood that participants and beneficiaries under single-employer defined benefit pension plans will receive their full benefits;
(4) to provide for the transfer of unfunded pension liabilities onto the single-employer pension plan termination insurance system only in cases of severe hardship;
(5) to maintain the premium costs of such system at a reasonable level; and
(6) to assure the prudent financing of current funding deficiencies and future obligations of the single-employer pension plan termination insurance system by increasing termination insurance premiums.