Employee Retirement Income Security Act

Employee Retirement Income Security Act

Long title	An Act to provide for pension reform.
Acronyms (colloquial)	ERISA
Nicknames	Employee Benefit Security Act
Enacted by	the 93rd United States Congress
Effective	September 2, 1974
Citations
Public law	93-406
Statutes at Large	88 Stat. 829
Codification
Titles amended	29 U.S.C.: Labor
U.S.C. sections created	29 U.S.C. ch. 18 § 1001 et seq.
Legislative history
Introduced in the House as H.R. 2 by John Herman Dent (D-PA) on January 3, 1973 Committee consideration by House Education and Labor Passed the House on February 28, 1974 (376-4) Passed the Senate on March 4, 1974 (passed, provisions of H.R. 4200 substituted) Reported by the joint conference committee on August 12, 1974; agreed to by the House on August 20, 1974 (407-2) and by the Senate on August 22, 1974 (85-0) Signed into law by President Gerald Ford on September 2, 1974

The Employee Retirement Income Security Act of 1974 (ERISA) (Pub.L. 93–406, 88 Stat. 829, enacted September 2, 1974, codified in part at 29 U.S.C. ch. 18) is a federal law that establishes minimum standards for pension plans in private industry and provides for extensive rules on the federal income tax effects of transactions associated with employee benefit plans. ERISA was enacted to protect the interests of employee benefit plan participants and their beneficiaries by:

ERISA is sometimes used to refer to the full body of laws that regulate employee benefit plans, which are mainly in the Internal Revenue Code and ERISA itself.

Responsibility for interpretation and enforcement of ERISA is divided among the Department of Labor, the Department of the Treasury (particularly the Internal Revenue Service), and the Pension Benefit Guaranty Corporation.

In 1961, U.S. President John F. Kennedy created the President's Committee on Corporate Pension Plans. The movement for pension reform gained some momentum when the Studebaker Corporation, an automobile manufacturer, closed its plant in 1963. Its pension plan was so poorly funded that Studebaker could not afford to provide all employees with their pensions. The company created a program in which 3,600 workers who had reached the retirement age of 60 received full pension benefits, 4,000 workers aged 40–59 who had ten years with Studebaker received lump sum payments valued at roughly 15% of the actuarial value of their pension benefits, and the remaining 2,900 workers received no pensions.

In 1963, Senator John L. McClellan (D) of Arkansas began an investigation through the Permanent Investigations Senate Subcommittee into labor leader George Barasch, alleging misuse and diversion of $4,000,000 of union benefit funds. After three years, the investigation had failed to find any wrongdoing, but had resulted in several proposed laws, included McClellan's October 12, 1965, bill setting new fiduciary standards for plan trustees. Additionally, due much in part to his "dismay" over Barasch's sole control over union benefit plan funds, Senator Jacob K. Javits (R) of New York also introduced bills in 1965 and 1967 increasing regulation on welfare and pension funds to limit the control of plan trustees and administrators and address the funding, vesting, reporting, and disclosure issues identified by the presidential committee. His bills were opposed by business groups and labor unions, which sought to retain the flexibility they enjoyed under pre-ERISA law. Provisions from all three bills ultimately evolved into the guidelines enacted in ERISA.

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