PBGC Celebrates 40 Years of Protecting Pension Benefits: The 1970s
This entry is part of a series of blog posts that looks back and commemorates the agency's work.
We hit the "Door" running
We had no time to hang photos, adjust chairs or figure out how to dial long distance. Visualize the rush on department store doors on Black Friday — well, that was much like what greeted us when we opened our doors for the first time in Silver Spring, Md., in 1974.
More than 200 urgent cases waited for us before the first pot of coffee was brewed.
Two days later our Board met for the first time and 21 days later we mailed our first premium forms. And it has not slowed since.
Initial annual premiums were $1 per plan participant in the single-employer program and 50 cents per participant in the multiemployer program. Thus began our march together with workers and employers seeking to preserve pension security for hard-working Americans.
When President Ford signed the Employee Retirement Income Security Act (ERISA) on Sept. 2, 1974, which included creation of PBGC, he gave us our charge: "Today, with great pleasure, I am signing into law a landmark measure that may finally give the American worker solid protection in his pension plan," Ford said.
"May" is the word we looked at hard and carefully. In a sense, we want to make the impact of that word as minimal as possible and — ideally — change "may" to "will."
We are not there yet.
Less than half a year later we trusteed our first plan and the next day the first check ever was made for $140.75, to a participant in the International City Bank of New Orleans Employees Retirement Plan.
One year and about two weeks from our birth, we moved to 2020 K Street, NW. — getting closer to our eventual permanent home. And before the decade ended, we trusteed our first multiemployer plan, which covered 2,700 millinery workers.
We could see our impact, even in Congress. For the first time, Congress increased the annual single-employer premium payment to $2.60 per participant.
And then a new entry into the world arrived, when the Revenue Act of 1978 established qualified deferred compensation plans (sec. 401(k)) under which employees are not taxed on the portion of income they elect to receive as deferred compensation rather than direct cash payments. The act created simplified employee pensions (SEPs) and changed IRA rules.
Pension insurance had begun — just as the pension world was changing dramatically!