Fifty Years of Pension Law

Abstract

I have been involved in pension law and policy for more than fifty years as a private practitioner, as a government official, as a professor, as a board member of the Pension Rights Center, and as an author of more than a dozen articles on the subject.1 In preparation for the Drexel Law Review Symposium, ERISA at 40: What Were They Thinking?, held on October 25, 2013, I read for the first time in many years my first pension article written in 1976, a surprisingly in-the-weeds discussion, which I called Retirement Security and Tax Equity: An Evaluation of ERISA . ... Returning to the Treasury, eventually as Deputy Assistant Secretary, gave me an opportunity to be involved in some ERISA regulations and Reorganization Plan 4, as well as the series of events that led to 401(k)s. ... Of course, the major change in the landscape of qualified plans over the last forty years has been the increasing dominance of defined contribution plans and the shift to elective contributions and employee control of investment choice under section 401(k). ... I now believe it makes more sense to talk in terms of allocation of risk--for example, as to investment return, early termination of the plan or of employment, and unexpected growth in salary. ... Since I worried about encouraging a shift to DC plans, I did assert in 1976 that a case could be made for plan termination insurance with respect to certain types of DC plans, primarily target benefit plans. ... While I worried about pre-retirement distributions and loans endangering retirement security, I focused my ire on the favorable tax treatment of lump sum distributions, which I felt provided an unfortunate incentive for forgoing lifetime distributions. ... I was influenced by a feeling that lack of vesting "is less of a problem if those who forfeit benefits are younger employees . . . who would not have ordinarily saved for retirement" during the period, and by the fact that the ERISA standard was not only a substantial improvement over prior law, but also compared favorably to the cabinet committee proposal as well as most of the proposals that had surfaced along the way. ... I wrote that " the only sensible way to improve retirement benefits for low-income households may be to increase their lifetime income through some redistributive device which would enable low-income workers to have more retirement income without a significant cut in their wages during their working years."