An insider describes how ERISA came to be.
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In this month's column, I continue my interview with Jeffrey Mamorsky. Here is Part 1.
Scott Simon: So you became legal counsel to a Business Roundtable Task Force, which had been established to review the various pension reform bills that were being introduced in Congress in the early 1970s?
Jeff Mamorsky: Yes, that's right. As counsel to a task force of lawyers from representative Business Roundtable companies, which was the precursor to the ERISA Industry Committee--known today as ERIC--I began working with the House Pension Task Force and the Senate Finance Committee in looking at the bills. And that led to my going to Washington to help draft ERISA.
So were you one of the principal drafters of ERISA?
Oh, no. ERISA was drafted principally by the staffs of Sen. Javits, Sen. Williams, Congressman Dent, and Congressman Erlenborn. I worked with the staff members and the congressional committees, and helped provide input to them. Don't forget that in those days there really weren't too many people with experience in running retirement plans. I was just lucky to be one of the few. I had the experience working at Prentice Hall and then working at Mobil, which had a huge benefit plans administration department, more than 100 people. While at Mobil, I worked with best-of-class benefit professionals such as Bob Peters, who was director of benefits, Art Foli, who was manager of benefit plans administration, and a brilliant in-house actuary, Ed McGarrity. So with the great team at Mobil and the other companies on the Business Roundtable Task Force, we were able to educate Congress in the pension legislation process. But it was educating the four gentlemen who were responsible for the ERISA statute and their staff people that was really our most important work.
Why are Title I and Title II of ERISA so much alike?
There were tandem pension bills moving through at the same time on both the House side and the Senate side. You had a House and Senate labor committee, and then you had the House and Senate tax committees, and they could never agree on things. Don't forget, this was very volatile, cutting-edge legislation then. Title I of ERISA is the labor title and Title II is the tax title--or really the employee benefits requirements of the Internal Revenue Code--and they are pretty much in almost all respects parallel statutes. If you put them side by side, you will see that eligibility, funding, and vesting are all pretty much parallel. Even in the prohibited transaction rules, you have the labor titles where the Department of Labor can impose civil penalties, and you have the tax title, where the IRS can impose excise taxes. And that's why Title I and Title II of ERISA are so much alike.
Do you know who came up with the name "Employee Retirement Income Security Act"? That's quite a mouthful and I was curious as to its origin.
I actually think that it was Sen. Javits who came up with the name, since he was the one who was the real catalyst of the pension reform effort. Sen. Javits was just a great man, having led the pension reform effort for many years conducting Senate hearings on the "broken pension promise" since the Studebaker plant closing in the early 1960s.
As you may know, there is a lot of debate going on now about the value of independent fiduciaries in qualified retirement plans.
Oh, yes, I'm very familiar with that debate and, in fact, have a great deal of personal experience with independent fiduciaries in qualified retirement plans since, among other things, I'm legal counsel for the largest multiple employer plan in America.