Opinion ID: 109975
Heading Depth: 2
Heading Rank: 1

Heading: Actions of Congress

Text: The SEC in its amicus curiae brief refers to several actions of Congress said to evidence an understanding that pension plans are securities. A close look at each instance, however, reveals only that Congress might have believed certain kinds of pension plans, radically different from the one at issue here, came within the coverage of the Securities Acts. There is no evidence that Congress at any time thought noncontributory plans similar to the one before us were subject to federal regulation as securities. The first action cited was the rejection by Congress in 1934 of an amendment to the Securities Act that would have exempted employee stock investment and stock option plans from the Act's registration requirements. [17] The amendment passed the Senate but was eliminated in conference. The legislative history of the defeated proposal indicates it was intended to cover plans under which employees contributed their own funds to a segregated investment account on which a return was realized. See H. R. Conf. Rep. No. 1838, 73d Cong., 2d Sess., 41 (1934); Hearings before the House Committee on Interstate and Foreign Commerce on Proposed Amendments to the Securities Act of 1933 and to the Securities Exchange Act of 1934, 77th Cong., 1st Sess., pt. 1, pp. 895-896 (1941). In rejecting the amendment, Congress revealed a concern that certain interests having the characteristics of a security not be excluded from Securities Act protection simply because investors realized their return in the form of retirement benefits. At no time, however, did Congress indicate that pension benefits in and of themselves gave a transaction the characteristics of a security. The SEC also relies on a 1970 amendment of the Securities Act which extended § 3's exemption from registration to include any interest or participation in a single or collective trust fund maintained by a bank . . . which interest or participation is issued in connection with . . . a stock bonus, pension, or profit-sharing plan which meets the requirements for qualification under section 401 of title 26, . . . § 3 (a) (2) of the Securities Act, as amended, 84 Stat. 1434, 1498, 15 U. S. C. § 77c (a) (2). It argues that in creating a registration exemption, the amendment manifested Congress' understanding that the interests covered by the amendment otherwise were subject to the Securities Acts. [18] It interprets interest or participation in a single . . . trust fund . . . issued in connection with . . . a stock bonus, pension, or profit-sharing plan as referring to a prospective beneficiary's interest in a pension fund. But this construction of the 1970 amendment ignores that measure's central purpose, which was to relieve banks and insurance companies of certain registratration obligations. The amendment recognized only that a pension plan had an interest or participation in the fund in which its assets were held, not that prospective beneficiaries of a plan had any interest in either the plan's bank-maintained assets or the plan itself. [19]