PAC Publications: Finding a Lost Pension

Legal Protections

Once, private pensions were almost entirely unregulated. It was not at all uncommon for a worker to reach the end of a long working life and find that his or her nest egg, in the form of an ample pension, had completely disappeared. In 1974 Congress passed the Employee Retirement Income Security Act (ERISA). This law, and other reforms enacted since 1974, established broad protections for many workers. The Department of Labor monitors pension plans to make sure they are solvent and are being responsibly managed. The Internal Revenue Service (IRS) also qualifies and regulates pension plans.

ERISA established PBGC, a federal agency that oversees the termination of defined benefit pension plans so that workers are not deprived of their accumulated benefits. However, not all pension plans are protected by these federal laws. Here are the major exceptions to ERISA's safeguards:


	Only private-sector workers are protected, not employees of the federal government or state or local governments.

	The ERISA protections are not retroactive: that is, they do not apply to workers who left their companies prior to the effective date of ERISA. For most plans this is 1976, but for union plans (multiemployer plans) it may be later. Nonetheless, it is important to know that in some cases, if a person terminated employment before the effective date, but satisfied the provisions of the plan and is vested, he or she may be due a benefit.

	PBGC only insures private sector defined benefit pension plans.