Opinion ID: 441965
Heading Depth: 3
Heading Rank: 1

Heading: Minimum Vesting Standards

Text: 5 One of the serious shortcomings Congress identified in private pension plans was their failure to provide for vesting of accrued benefits before the time of actual retirement; employees like Mrs. Rettig and Mr. Ramputi with thirty, forty or more years of service were thus flatly denied a pension if their employment was terminated for any reason before reaching retirement age. In enacting ERISA, Congress sought to remedy this inequitable situation by requiring all ERISA-covered pension plans 3 to provide for pre-retirement vesting determined solely by years of service. Title I of ERISA provides three alternative minimum vesting standards; that selected for the Lidz plan, like most plans, 4 provides for one hundred percent vesting of accrued benefits after ten years of service. 5 6 For plans in existence on January 1, 1974, these requirements became effective for plan years beginning after December 31, 1975, 29 U.S.C. Sec. 1061(b)(2); for newer plans, the vesting requirements were immediately effective for plan years beginning any time after the date of enactment, September 2, 1974. 29 U.S.C. Sec. 1061(a). In selecting these particular effective dates, it is important to note, Congress rejected the less generous provisions of the House bill, which had provided for a gradual phase-in of the vesting provisions over five years. According to one of the House conferees, [t]his change was made because, after consideration, your conferees agreed that it was essential for the protection of covered employees that they be given the full protection of the vesting provisions on the effective date without any delay, particularly since the costs involved in financing such vesting are expected to be moderate. 120 Cong.Rec. 29199 (1974) (remarks of Rep. Ullman).