The 1970s Law That Keeps Pensions And Health Care Private

 Defined-benefit pensions-which make regular payments in retirement at pre-determined levels-held individual workers hostage to the whims of plan administrators, left them without legal rights to protect their benefits from misallocation, and meant that they lacked vested rights to benefits when they left the firm.

The legislation set minimum funding standards for employer-sponsored pension plans, established fiduciary duties for plan sponsors, and regulated their investment decisions.

ERISA required defined-benefit pension plans to purchase "Plan termination insurance" from the Pension Benefit Guaranty Corporation, a federal agency that becomes responsible for paying insured benefits if the plan's sponsor runs into financial distress.

Fewer than half as many state and local government employees have defined-contribution plans as have defined-benefit plans.

Whereas assets of single-employer defined-benefit plans covered 83 percent of liabilities in 2019, those for multiemployer plans covered only 44 percent of benefits promised.

Establishing such open-ended assistance without governance or funding reforms will only encourage multiemployer defined-benefit plans to make increasingly risky investments to inflate benefit promises, while reducing the need to fund liabilities fully in case investments don't work out.

Three-quarters of Americans with private insurance were covered by ERISA health plans in 2017. 

https://www.city-journal.org/article/the-1970s-law-that-keeps-pensions-and-health-care-private