ERISA 50th Anniversary

2024 marks 50 years since the Employee Retirement Income Security Act of 1974 (ERISA) became law. This is the federal tax and labor law that established minimum standards for defined benefit pension plans for the private sector in the United States.

The earlier movement for pension reform truly began in the 1960s with President John F. Kennedy, who created the President’s Committee on Corporate Pension Plans in 1961.

Then, in 1963, just two years later, thousands of employees of the Studebaker Corporation, a car manufacturer, closed its plant. The company couldn’t afford to pay promised pensions to their more than 10,000 employees or retirees.

Lawmakers in the U.S. began to investigate this issue of pension security and found that the private sector was lacking a true safety net to protect retirees from being swindled. It amounted to pension insecurity.

50 years later, it feels as though ERISA has been stripped of many of its pre-retiree protections.

Then, Congress was spurred into action following NBC’s hour-long special broadcast in 1972, Pensions: The Broken Promise.

This TV special shined a spotlight on the inadequately funded pension plans and the difficult vesting requirements at companies across all 50 states.

In January of 1973, Representative John Herman Dent (D-PA) introduced ERISA legislation into the House of Representatives, where it would make its way through the House Education and Labor Committee before finally passing in the full House on February 28, 1974.

Only a few days later, on March 4, 1974, the Senate would pass the bill as well.

It was finally signed into law by President Gerald R. Ford on September 2, 1974.

The passage of this historical legislation impacted every single American with a private sector pension.

The passage of ERISA meant that working Americans no longer had to worry about the security and stability of their pension plan. If their company were ever to go bankrupt, or simply could no longer fulfill their fiduciary duties, retirees knew that Uncle Sam would make good on the promises made, but not kept.

However, 50 years later, it feels as though ERISA has been stripped of many of its pre-retiree protections.

A January survey of over 1,000 Association of BellTel Retiree members is a reminder that nearly one-third of the members in our community had their pensions de-risked by Verizon.

One of those de-risked retirees expressed the desire for enhanced ERISA protections on their previously transferred pension, adding, “Please pursue the application of the Pension Benefit Guarantee Corporation (PBGC) coverage for members now on annuity.”

When those pensions were transferred, into a group pension replacement annuity, those retirees lost all of the protections guaranteed under ERISA. Our Association has been sounding the alarm on this issue consistently since 2012 when 41,000 Verizon retirees were de-risked.

Recently, in May of 2023, 96,000 of AT&T retirees were likewise transferred to a group annuity.

Your Association of BellTel Retirees even took the legality of this issue all the way to the United States Supreme Court, twice.

President Ford signing ERISA. Photo Credit: Pension Benefit Guaranty Corporation

In May of 2023, 96,000 AT&T retirees were transferred to a group pension annuity.

Your Association and leaders at Retirees for Justice have been the leading advocates for better protections of retirees who have had their ERISA protections stripped without notice, or consent.

More recently, our advocacy in 2022 helped to include greater pension protections into the federal Secure 2.0 Act at the conclusion of that federal legislative year.

This past summer, BellTel board member Don Kaufmann, along with Association Special Counsel Edward Stone, provided essential testimony before the ERISA Advisory Council during their hearings on the issue of pension de-risking.

“Retirees want transparency and accountability when it comes to their pensions. Retirees want to know what is going on and why; most importantly, they want to know that their pensions are safe and secure,” Stone said in his testimony to the ERISA Advisory Council.

The Association of BellTel Retirees remains steadfastly committed to advocating for the rights of retirees across our country and our fellow friends in the telecommunication field.

We hope that in another 10 years, ERISA will be revived, stronger than ever, protecting retirees from all corporate maneuvering so that we all may enjoy a peaceful retirement.