Chapter 2 - § 2.4 • PENSION PLAN INTERESTS

• Jurisdiction: Colorado

§ 2.4 • PENSION PLAN INTERESTS

Interests in employee pension plans may be considered securities. In Uselton v. Commercial Lovelace Motor Freight, Inc.,⁴⁷ the court found that interests in a voluntary, contributory pension plan were securities under federal law. The court further held that pension plan regulation under the Employees' Retirement Income Security Act of 1974 (ERISA) did not preempt the application of the securities laws since ERISA does not duplicate the protection offered by the disclosure and anti-fraud provisions of the securities laws.

The Supreme Court earlier had found in International Brotherhood of Teamsters v. Daniel⁴⁸ that an employee's interest in a non-voluntary, non-contributory pension plan was not a security under federal law. The SEC has been struggling with deferred compensation plans that offer a variety of investment alternatives and are made generally available to all corporate employees. Since these employees do not meet the Ralston Purina⁴⁹ tests for sophistication, access to information, and bargaining position, the § 4(2) exemption is not generally available. But the SEC has allowed these plans without requiring registration, although it is reconsidering this position.

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Notes:

^[47] Uselton v. Commercial Lovelace Motor Freight, Inc., ...