ERISA at 40 Four Decades of Protecting America's Employee Benefits
In December 1963, the Studebaker-Packard Corporation shuttered its manufacturing plant in South Bend, Ind., and it quickly became clear that the auto manufacturer's finances, including its pension plan, were in disarray. Thousands of workers received lump sum payments worth a fraction of the pension benefits they'd earned over their careers. Thousands more received no pensions at all.
The misfortunes of Studebaker's employees drew national attention to a critical issue: the need for pension reform. The danger was clear: Without protection for pensions, workers risked losing the retirement benefits they'd accrued over the course of their working lives. The solution was the Employee Retirement Income Security Act of 1974.
ERISA established standards for private sector pension, health and other employee benefit plans, increasing protections for plan participants and their families. The Labor Department's Employee Benefits Security Administration enforces ERISA, along with the Treasury Department and the Pension Benefit Guaranty Corporation.
This year, we recognize the fortieth anniversary of ERISA, which was passed by the House of Representatives on Feb. 28, passed by the Senate on March 4, and signed by President Gerald Ford on Sept. 2, 1974. Over the past four decades, the retirement landscape has changed dramatically, but throughout that time, ERISA has continued to protect America's retirement savings.