Pension News

Thirty-six years ago today the nation’s landmark private pension law, the Employee Retirement Income Security Act of 1974 (ERISA), was signed into law by President Gerald Ford. In honor of the workers who would benefit from the new law, the signing appropriately took place on Labor Day.

ERISA made private retirement plans fairer and helped ensure that workers received the pensions their employers had promised to give them at retirement. ERISA also created the Pension Benefit Guaranty Corporation – the federal pension insurance program. As a result of ERISA, most traditional pension plans are insured, adding an important layer of protection for workers and retirees should their companies go out of business.

Traditional pensions are just as important today as they were when ERISA was passed, because they provide retirees with financial security through the ups and downs of unpredictable economic times. There are, however, still many gaps in ERISA that need to be fixed, and more workers that need to be covered.

While much of the recent focus is on expanding coverage through individual retirement accounts (IRAs) and 401(k)s, we must not forget about ERISA’s initial goals of providing secure retirement benefits to all workers of all economic backgrounds – from the executive to the teacher to the janitor.

Increasing access to IRAs and 401(k) saving vehicles is a good thing, but these saving vehicles are not the complete solution. So far, they have not shown that they can provide sufficient or secure retirement income for most people. Also, the trend towards more individualized saving vehicles has led to new problems for participants that now need to be addressed by the law – participants need more information about the fees they pay for and participants need access to independent investment advice.

Happy Birthday, ERISA. You’ve come along way and helped millions of workers attain secure retirement incomes. But after celebrating where you came from and what you have accomplished in the past, it is time for you to move forward and meet the future challenge of providing safe and sufficient retirement incomes to all working Americans.

Certain rules in the Internal Revenue Code are designed to prevent employers from discriminating against non-highly paid employees in their pension plans. Unfortunately for the retirement security of their employees, some employers look for ways to get around the nondiscrimination rules. (more…)

Have you heard that the government is planning to seize your 401(k) and use the money to send monkeys to Mars? Well, we haven’t heard about the monkey part, but some people are making the claim that the government is gunning for workers’ 401(k)s. (more…)

Dow Jones Newswires reports that the Internal Revenue Service has released rules clarifying when participants in 401(k) plans can sell company stock held in their accounts.  (more…)

On New Year’s Eve, current and retired employees of Augsburg Fortress, the publishing arm of the Evangelical Lutheran Church in America, learned that their traditional defined benefit pension plan would be terminated and that they could lose a substantial portion of their benefits as a result of the termination.  (more…)

Labor Day marks the 35th anniversary of a law hailed by its principal sponsor Senator Jacob Javits as “the greatest development in the life of the American worker since Social Security.” Thanks to the Employee Retirement Income Security Act of 1974, millions of retirees are receiving the secure lifetime pensions that are making it possible for them to live comfortably in retirement. (more…)

When writer-comedian Al Franken was sworn in as Minnesota’s junior Senator on July 7, I was intrigued to hear that he will be serving on the Committee on Health, Education, Labor, and Pensions (also known as the Senate HELP Committee). Not surprisingly, this is one of the committees that we deal with the most, and I wondered what kind of positions Senator Franken would take on retirement income issues. (more…)

The recent bankruptcies of Chrysler and General Motors have caused a lot of workers to be concerned about their pensions. While Chrysler has now emerged from bankruptcy GM is still going through the bankruptcy process and the question. “What will happen to my pension?” is very much on the minds of workers and retirees in the automotive sector - and elsewhere. (more…)

Today, May 1, marks the start of Older Americans Month. What better a day to discuss the retirement security of older Americans? Not so long ago retirement security was thought of as a three-legged stool, consisting of employer-sponsored pensions, personal savings and Social Security.   (more…)

With Mother’s Day approaching, it seems only fitting that I put in a plug for the current edition of Mother Jones magazine. Its cover asks, “Who Ran Away With Your 401(k)?” and the issue is required reading for anyone interested in the future of retirement income.   (more…)