Women have made enormous strides over the past three decades, in the workplace and beyond – and it’s important to reflect on the men and women who fought for the changes that have led to greater gender equality. One of those changes was introduced 29 years ago: The Retirement Equity Act became law, ushering in important protections for America’s workers and their families.
As the assistant secretary for the Employee Benefits Security Administration, one of my chief responsibilities is to oversee the administration and enforcement of Title I of the Employee Retirement Income Security Act of 1974, which sets minimum standards for pension plans.
ERISA was and is an important law that protects the retirement savings of America’s workers, but the law’s original text had some significant shortcomings, and those shortcomings disproportionately affected women.
ERISA has strict prohibitions against the “alienation of benefits,” so that creditors could not claim an employee’s pension benefits. But as written in 1974, this also meant that divorced women were unable to obtain their fair share of their ex-husband’s retirement benefits – even if a woman had forfeited a career of her own in order to support a husband or raise the couple’s children.
Under some circumstances, women who temporarily left the workforce to give birth and raise their children forfeited all the retirement benefits they’d earned up to that point. And in some other cases, women who had for decades based their own plans for retirement on the assumption that their working husbands’ benefits would support them were shocked to discover that they received nothing if they were unfortunate enough to be widowed before their spouses became eligible to retire – even if their husbands died just hours before pension eligibility.
Thanks to the efforts of passionate congressional advocates – including the bill’s drafter, Rep. Geraldine Ferraro – and critical supporters like Sen. Bob Dole, Rep. Bill Clay and Rep. Barbara Kennelly, a new law was drafted to address these nightmarish scenarios: the Retirement Equity Act, signed by President Reagan on Aug. 23, 1984.
The act lowered the minimum age requirement for pension plan participation, it prevented plans from penalizing parents who took time off to raise families, it allowed pension plans to make court-ordered payments to former spouses and it mandated spousal consent for workers to waive survivor benefits. In short, it began to recognize the working patterns of women, who remain more likely to interrupt their careers to take care of a family member, and provided greater retirement protection for women throughout the country.
It’s important to remember that women still face unique challenges in saving for retirement. Women are much more likely to work a part-time job that does not provide retirement benefits. And with a longer life expectancy, they need their savings to stretch farther.
As we reflect on the many benefits of the Retirement Equity Act, women (and men!) should use this opportunity to take stock of their financial situation and educate themselves about their retirement needs. To that end, EBSA has a number of resources, including a Retirement Toolkit, New Employee Savings Tips and a Women and Retirement Savings publication.
As the pension and employee benefit counsel for the House Education and Labor Committee in 1984, I’m proud of the role I played in drafting the Retirement Equity Act. And I’m equally proud today to lead an agency that works every day to ensure that the retirement savings of all of America’s workers get the protection they deserve.
Phyllis C. Borzi is the assistant secretary of labor for employee benefits security.