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.

Thinking about tapping into your 401(k) early? Think again - at least if you want a shot at a secure retirement. (more…)

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…)

Over the last few months you’ve probably heard reports about the president’s fiscal commission. Word around town is that this secretive commission, with its stated goal of reducing the federal deficit, is seriously considering cuts to Social Security. (more…)

Yesterday I joined friends from Social Security Works, OWL - The Voice of Midlife and Older Women, Social Security Matters, the Alliance for Retired Americans, the Economic Policy Institute, and others outside of the Ronald Reagan Building and International Trade Center as Pete Peterson (you know him, he’s the one who is trying to scare everyone into thinking that Social Security is on its last legs - don’t worry, it isn’t) hosted a closed-door meeting of millionaires and billionaires, at which cutting Social Security was a primary point of discussion.  (more…)

Today Brad Pitt and Angelina Jolie announced that they were committed to working toward a new universal pension system to ensure that all Americans - and particularly their six children - would be able to retire with dignity. (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…)

As I was reading the most recent edition of the Private Pension Plan Bulletin Abstract of 2007 Form 5500 Annual Reports [PDF], published by the Labor Department’s Employee Benefits Security Administration, I noticed something rather odd in one of the footnotes.  (more…)

A few months ago we posted a blog entry about a letter [PDF] we wrote opposing a bill in the Oklahoma state legislature that would limit the ability of former spouses to receive an award of military retirement pay in a divorce settlement. The blog entry received a number of comments - several disagreeing with our position. (more…)