On its 20th birthday, the Employee Retirement Income Security Act seems like an unruly youth in need of some discipline.
Hardly anyone is entirely happy with the way it has matured - not the people who gave birth to it, nor those who have to live with it.
But most believe modest corrections would be enough to straighten it out.
"In many regards, ERISA has been a smashing success relative to what policy makers want to accomplish," observed Sylvester J. Schieber, research director at The Wyatt Co., a Washington-based employee benefits consulting firm.
Granted, the law still has some shortcomings. The most visible, some of ERISA's founding fathers say, is the failure to expand pension coverage among working Americans - only 45% of those working are eligible for some form of employer-linked retirement benefits, about the same as when the law was passed.
Many of those interviewed in conjunction with ERISA's 20th anniversary would like to see a thinning of the regulatory morass that threatens to make traditional pension plans extinct.
"Employers who wish to provide benefits should not have to wade through piles of laws and regulations or hire ERISA specialists," Labor Secretary Robert Reich said.
Some 15 pension industry experts present their wish lists in a special report that begins on Page 16. Among the changes to ERISA they suggest:
Steven J. Sacher, a pension lawyer and head of the ERISA practice at the Washington office of Kilpatrick & Cody, would like ERISA to be administered by only one agency, an independent commission along the lines of the Securities and Exchange Commission, as originally proposed. He also would repeal portions of the law that regulate group industry plans for unionized workers. "It's redundant, it gets in the way and the industries with multiemployer plans should be allowed to run their own plans."
Michael Gordon, a pension lawyer who was minority counsel for pensions of the Senate Labor and Public Welfare Committee in the early 1970s, would overhaul the Pension Benefit Guaranty Corp. to work more like an insurance company, so the risk of termination is factored into premiums employers pay to receive the protection. Employers with higher risk of shutting down their plans in higher risk industries would be assessed a bigger premium.
John Erlenborn, one of ERISA's founding fathers, and Robert A. G. Monks, top ERISA administrator in 1984-1985, would push for a national retirement policy.
Such a policy would examine the role of the private pension system in tandem with Social Security, personal savings and the aging of the American population, Mr. Monks said. "Changing ERISA without doing it in the context of a national retirement policy doesn't make sense," he said.
Mr. Schieber would like to see the compensation limit on which employers can calculate pensions revert to $235,000. He also would like to see lawmakers lift the ceiling on the amount of retirement benefits employees can accrue in traditional pension plans. Current law limits benefits to either $118,800 or an individual's average compensation for the three highest paid years, whichever is less.
Roy A. Schotland, pension law professor at Georgetown University, wants to fix the Form 5500, an annual financial statement that plan sponsors must file with the Internal Revenue Service. Mr. Schotland has little praise for the statement, calling it "a leading candidate for the worst report in the federal government." He wants more disclosure to plan participants of such information as total return and performance comparisons.
Randy Barber, director of the Center for Economic Organizing, Washington, believes employee stock ownership plans could be removed from ERISA.
"ESOPs aren't pension funds. They are investment mechanisms," Mr. Barber said. "They have been used as a tax dodge, an anti-takeover device, any kind of mechanism other than an employee benefit."
Although Assistant Secretary of Labor Olena Berg could not predict when or if the ESOP provision would get pulled from ERISA, she did say it was an issue worth exploring.
"With ESOPs you have two very good public policies coming right up against each other," Ms. Berg said. "One is to encourage people to be productive by tying their fortunes to the company, but the other is to make sure that they secure their retirement income by diversifying their portfolio.
"So, if the solution to this potential conflict were to be the removal of ESOPs from the ERISA framework, depending on how it is done, I don't think that's a bad thing."