Wharton Pension Research Council Working Papers
 

Title

Changing Frameworks for Retirement Security

Document Type

Working Paper

Date of this Version

9-1-2014

Abstract

In 1963, the termination of the Studebaker Corporation’s pension plan wiped out or significantly reduced the pensions of thousands of the automaker’s employees and retirees. In response, Congress passed the 1974 Employee Retirement Income Security Act (ERISA), a monumental and revolutionary piece of legislation crafted to address corporate pension underfunding and set new rules regarding defined benefit (DB) and other retirement plans. ERISA also established the Pension Benefit Guaranty Corporation as a government-run insurer to serve as a backdrop to U.S. corporate pensions. Despite the bill’s far-ranging scope, in the years since its passage it has become evident that ERISA failed to achieve all of its intended objectives. The corporate pension scene today is in turmoil, and most private employers have terminated or frozen their traditional DB plans. In their place, employers are increasingly substituting defined contribution (DC) retirement saving plans, which pose a new set of responsibilities on employees and their firms. This volume investigates how and why traditional approaches to pension risk management have failed, and we also explore the new mechanisms required to strengthen retirement security for the future

Comments

The published version of this Working Paper may be found in the 2016 publication: Reimagining Pensions.

Working Paper Number

WP2014-04

Copyright/Permission Statement

All opinions, errors, findings, interpretations, and conclusion of this paper represent the views of the author and not those of the Wharton School or the Pension Research Council. © 2014 Pension Research Council of the Wharton School of the University of Pennsylvania. All rights reserved.

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Date Posted: 26 June 2019