Today marks the 40th anniversary of The Employee Retirement Income Security Act’s (ERISA) signing into law Sept. 2 by President Gerald R. Ford.
In honor of this day, here is a quick list of 5 items ERISA’s enactment provided to both plan sponsors and participants:
- Established a long overdue framework for operating pension plans and protecting their participants.
- For participants: ERISA shortened vesting periods, protected their rights to collect pension benefits they had earned, and created the Pension Benefit Guaranty Corp. as a safety net in case a pension plan sponsor failed.
- For plan sponsors: ERISA set out minimum pension funding standards, seeking to ensure companies that made pension promises would keep them.
- Created a uniform set of rules for plan sponsors, replacing a wilderness of state and federal laws that were inadequate to provide guidance and protection and led to uncertain outcomes. That set of uniform rules encouraged the growth in DB plans that occurred in the decade after ERISA's enactment.
- Provided a clear outline of fiduciary responsibilities.
Source: Pensions & Investments (www.pionline.com/article/20140901/PRINT/309019998/lessons-learned-from-erisa)