Comparison of ERISA Pension and State Pension Protections

Comparison of ERISA Pension and State Pension Protections: "COMPARISON OF ERISA AND STATE PENSION PROTECTION PROVISIONS

By: Laura Jordan, Research Attorney

You asked whether any state has adopted Employees Retirement Income Security Act of 1974 (ERISA) pension fund mismanagement protections. You also asked for a comparison of the ERISA provisions that are designed to protect private-sector employees from pension plan mismanagement with state law provisions designed to protect public pension plans from mismanagement by the state treasurer.
SUMMARY
State and local governments are exempt from ERISA. We contacted the National Association of State Retirement Administrators, the Employee Benefits Research Institute, the National Conference on Public Employee Retirement Systems, and the State and Local Pension Exchange website. These sources were unaware of any state that had directly adopted ERISA provisions. However, because ERISA and state law protections both stem from common law fiduciary and trust principles, many public pension protections are similar to those found in ERISA.
The rules described in this summary are explained in detail below. We simplified the ERISA rules for this report because particular conditions or exemptions apply to most of them. Some ERISA rules are not explained because they are not relevant in comparing ERISA and state mismanagement protections (e.g., rules concerning investment in employer-owned real property or securities and corporate control contests).
The public pension funds that this report refers to and that the treasurer oversees include the Connecticut Municipal Employees' Retirement Fund (A and B); the Soldiers', Sailors', and Marines' Fund; the State's Attorney Retirement Fund; the Teachers' Annuity Fund; the Teachers' Pension Fund; the Teachers' Survivors"

Finally, ERISA places extensive reporting requirements on private-sector employers. State law requires the Advisory Committee to annually report to the governor, General Assembly, and plan beneficiaries on public pension security investments.
For your further information, we have attached a copy of the Uniform Management of Public Employee Retirement Systems Act that the National Conference of Commissioners of Uniform State Laws recently approved and an OLR summary of the Act. The Act may be found at www.law.upenn.edu/bll/ulc/fnact99/1990s/umpers97.htm. The OLR summary is available at www.cgalites.state.ct.us/p599/rpt/olr/htm/99-r-0769.htm.