conceivably the Tax Court), not by participants. If the plan meets the minimum standards, it qualifies. Participants cannot impose higher standards than those required by law. A significant amount of information is reported to the administrative agencies. With regard to small plans, it is often relatively simple to review reports made public and to determine compensation levels and other personal data as well as extensive data about the employer. Several companies are presently involved in accumulating and selling information acquired from ERISA reports. We contend that access to such "identified" information should be limited to those with a legitimate need to know -i.e., to participants and beneficiaries, their representatives, and the agencies. "Identified" information should not be made freely available to competitors and soliciters. F. Master and Prototype Plans Reporting requirements for "Master" and "Prototype" plans could be substantially simplified by permitting master reporting of information common to the particular plans. (See Section 401 of S. 3017). However, the broader goal of ERISA amendments, should be to reduce and simplify reporting requirements for all plans, including individually designed plans. "Master" and "Prototype" plans fill an important role in the private employee benefit plan universe. However, by their nature they are inflexible and simply cannot be adapted to all situations. Furthermore, they are often installed and administered by mail, with little personal contact of a professional nature. As a result, communications problems often arise between the sponsor, the employer, and the employees, resulting in administrative, interpretative, and procedural difficulties. Finally, administrative and installation costs can vary considerably from plan sponsor to plan sponsor, and with some plans, may equal or exceed the costs of individually designed plans. To summarize, simplified reporting for "Master" and "Prototype" plans should not be viewed as the final answer. There must be simplified reporting for all plans. When pension reform was being considered initially, many in the private sector supported retention in the Internal Revenue Service of the administrative and enforcement functions relating to qualified retirement plans. The reason for such support, primarily, was because the Internal Revenue Service was a known quantity with existing administrative and enforcement capabilities which practitioners felt could fully implement the objectives of ERISA. Most opposed then and now the concept of "dual jurisdiction", although all recognized that it was the result of a legislative compromise and, at the time, was essential to passage of ERISA. However, the experience of dual jurisdiction has reaffirmed that it is not a practical solution to the many problems addressed by ERISA. Throughout the past four years NAPCA has been intimately involved in dealing with the problems that have arisen under ERISA. The common denominator of a substantial majority of these problems has been jurisdictional uncertainty or jealousy or a simple inability of the administrative agencies to coordinate and make decisions. The problems have been particularly acute in the areas of reporting and disclosure, prohibited transactions and fiduciary responsibility, and the totally different approaches of the agencies to enforcement activities. We fully recognize that progress has been made in the implementation of ERISA and quite candidly we highly compliment the agencies for the progress to date. However even this much progress comes only after a truly inordinate amount of time, expense and hard work on the part of the Congress, the agencies and the public. It is our considered judgement that the jurisdictional problems remain and that they are institutional. We have no reason to believe that the situation will significantly improve, absent a legislative change. There appear to be two basic philosophies as to how the dual jurisdiction problem might be addressed. One is the concept of "statutory consolidation of functions" as exemplified by the original Senate proposals, again in H.R. 4340 introduced last year, and most recently in S. 3017. The second is the concept of "statutory allocation of functions" as exemplified by S. 901, now S.2352. NAPCA strongly supports the concept of consolidation as the only realistic long-term alternative for resolving the jurisdictional problems which have so hampered the administration and enforcement of ERISA. The ERISA Advisory Council has recommended a transfer of all administrative and enforcement functions of ERISA to the Department of Labor, with the Internal Revenue Service retaining jurisdiction solely over matters relating strictly to taxation. Essentially, the Advisory Council recommended a scheduled transfer with the most acute jurisdictional problems being addressed immediately and other functions transferred on a step-by-step basis over a reasonable period of time. We are aware of the obvious practical and logistical problems involved in consolidating the administrative and enforcement functions of ERISA in a single agency. We are aware of the particular political problems involved in consolidation in an existing agency as opposed to a new independent agency. For the short term, we have recognized the simple reality that we have multi-jurisdiction in strong agencies supported by powerful constituencies, and that the only practical approach is to seek an allocation or division of responsibilities on a scheduled basis. For the long term, however, we believe it essential that we obtain consolidation of administrative and enforcement functions of ERISA and, indeed, of all employee plans both public and private, the Social Security System and the Pension Benefit Guaranty Corporation (PBGC) under a single agency. The "dual jurisdiction" debate has focused largely on the implementation problems of ERISA, and they have been and are substantial. However, these problems are but a part of the overall problem, which we view as our failure to have developed a uniform and coordinated national policy dealing with employee plans and retirement security in general. We totally concur with the view that federal, state, local and private pension plans, Social Security, ESOP's, TRASOP's, IRA's and Keogh plans must be viewed as part of the same We believe the ultimate goal should be the creation of a cabinet level Employee Benefits Commission, or Employee Benefits Administration, with overall responsibility over all private and public retirement plans. We envision that the enabling legislation would maintain "walls of separation" between private assets and public promises so that the former would not be used to fund deficits in the latter, and would also be mindful of Constitutional considerations involving the relationships of the States and the continuum. 30-779 - 78 - 69 |