August 11, 2014 (PLANSPONSOR.com) - Next month, specifically September 2, will mark the 40th anniversary of the passage of the Employee Retirement Income Security Act (ERISA).
the past 40 years, a number of changes have been made to the law through
various legislation. Last week, I asked NewsDash readers which change to ERISA
in the past 40 years they think has MOST helped participant retirement savings
outcomes, and what suggestions they have for changes that would be helpful.
six in ten (58.7%) of responding readers are plan sponsors or work for plan
sponsors, while 10.9% are or work for advisers/consultants, 26.1% are or work
for TPAs/recordkeepers/investment managers, and 4.3% are attorneys.
change to ERISA during the past 40 years that received the greatest percentage
of votes for being the one that most helped participant retirement savings
outcomes was the establishment of Section 401(k) qualified deferred
compensation plans, at 44.7%. This was followed by the sanctioning of automatic
enrollment subject to certain requirements, at 21.3%.
percent of responding readers selected “increasing contribution limits and
establishment of indexed increases each year” as the change to ERISA that has most
helped participants retirement savings outcomes, 4.3% chose “addition of
catch-up contributions for participants age 50 and older,” and 2.1 % each
selected “creation of SIMPLE retirement savings incentive match plan for small
businesses,” “establishment of Roth 401(k),” and “sanctioning of cash balance
defined benefit plans as non-discriminatory.”
included the combination of auto enrollment and auto deferral escalation, and
more stringent vesting on employer contributions, with one reader saying “ERISA
originally allowed a 15 year graded vesting schedule which in 1974 seemed very