shall be continued to final judgment by the Attorney General. After July 1, 1976, upon request of the Commissioner of Corporations and with the approval of the Department of Finance, the Controller shall transfer funds from the Health Care Service Plan Account to the Attorney General to pay for the costs of pursuing to final judgment all actions commenced by the Attorney General prior to July 1, 1976, to carry out and enforce the provisions of the Knox-Mills Health Plan Act. SEC. 7. Notwithstanding any other provision of law, the Attorney General or the Attorney General's representatives may make available to the Commissioner of Corporations or the commissioner's representatives any and all records, documents, files or other information relating to health care service plans under the Knox-Mills Health Plan Act as the Attorney General or the Attorney General's representatives deem appropriate to the orderly transition of the regulation of health care service plans from the Attorney General to the Commissioner of Corporations as provided by this act. SEC. 8. Except for Sections 4, 5, 6, 7, and this section, this act shall become operative July 1, 1976. Sections 4, 5, 6, 7, and this section of this act shall become operative January 1, 1976. FROM: RE: HONORABLE JOHN H. DENT, Chairman HARRY V. LAMON, JR., General Counsel STANLEY H. HACKETT, Associate General Counsel PROPOSED AMENDMENTS TO THE EMPLOYEE RETIREMENT This Memorandum is in response to your request of May 3, 1978, that we provide you with general proposals as to possible amendment of the Employee Retirement Income Security Act of 1974 (ERISA). Where pertinent, the Memorandum includes comments on major legislation introduced in both Houses of Congress relating to employee benefit plans (e.g., H.R. 7597; H.R. 4340; H.R. 12078; S. 901, S. 2352, S. 3017, and Administration proposals relating to non-qualified deferred compensation arrangements). This Memorandum is presented on behalf of the National Association of Pension Consultants and Administrators, Inc. (NAPCA). The proposals focus primarily on amendments with particular relevance to small plans. I. FINDINGS AND DECLARATION OF POLICY. The impact of ERISA on employee benefit plans, and particularly smaller employee benefit plans, has been the subject of considerable study, comment and debate. A number of studies have previously been made available to the Subcommittee. We suggest that all such studies be accumulated and made a part of the Subcommittee's record of proceedings. The studies include: Survey of Increased Administrative Costs of ERISA (National Association of Pension Consultants and Administrators, Inc.) (1975); Certified Public Accountants Survey (Retirement Administrators and Designers of America, Inc.) (1977); Pension Consultants Survey (Retirement Administrators and Designers of America, Inc.) (1977); IRS Statistics Based on Determination Letters Issued Pre- and PostERISA (On-going); Survey of House Committee on Small Business (1977); Meidinger & Associates, Inc. Survey (1977); General Accounting Office Survey (1977); Senator Robert Dole Survey (1977); Senator Richard Lugar Survey (1977); PBGC Statistics of Terminated Plans (On-going); Price-Waterhouse Survey for the Department of Labor (1978). Although the survey results are not uniform, and many are not scientifically designed, they do unanimously reflect that ERISA has resulted in increased costs for many plans, and that ERISA has been a significant factor in the termination of many existing plans and in the failure of many employers to establish new plans. These conclusions, however, should not be misinter preted. ERISA was designed to correct problems and abuses of the past and to enhance the protection of the rights of participants and beneficiaries. Some increased costs and In complexities were inevitable and justified. The objective of amendments to ERISA should be to identify those areas where increased costs and complexities are not justified specifically, where the costs of compliance exceed the corresponding benefit to participants and beneficiaries. our judgment, the philosophy of federal pension laws must equally consider the need to protect the rights of participants and beneficiaries and the need to foster the continued viability and growth of the private employee benefit system. Recommendations: 1. We strongly recommend that the President proceed expeditiously to implement the proposed "Presidential Retirement Commission" to conduct a comprehensive review of the present and future needs for retirement income and the ability of public and private employee benefit plans to meet those needs. The Commission should formulate a reasoned and comprehensive federal policy with respect to all employee benefit plans, public and private, qualified and non-qualified. The result should be a comprehensive "White Paper", subjected to Congressional and public scrutiny and comment. The final report should be in such form that specific policies and goals are articulated and can be considered by the Congress for adoption as national goals. |