'We need a national retirement policy.'

• Author: Curtis, James A.

"We need a national retirement policy" Plato said, "What is honored in a country will be cultivated there." Perhaps, because we do not truly honor the retiree andutilize the experience and wisdom of the elderly, our society has not made the commitment to define, develop, and cultivate a national retirement policy.

Every year, at least 2.2 million of our neighbors and friends retire, yet fewer than half receive some form of pension benefits through the private system. Unless we adopt a national retirement policy to encourage employers to continue to provide retirement benefits, the number receiving benefits will continue to decrease.

In the 1930s, when the Depression hit and a crisis was upon us, we created the Social Security system. With all its faults, that system provides one leg of the "retirement stool," the others being private savings andprivate pension plans. The wobbliest leg of that stool is our pension system.

If we're not careful, private pension plans could literally disappear. And, without a national policy and commitment, there is little hope that the "retirement stool" will be available for the next generation of retirees.

The public pension plans are not only alive and well, but they are being liberalized almost as fast as private plans are being restricted and at a tremendous and not fully understood cost to the taxpayers. Perhaps a double standard is being developed. In any case, I'm not challenging what is happening with public plans but rather speaking out against the unfairness toward private plans adn the consequences of continuing on such a course.

Snarling pension legislation

On September 2, 1974, ERISA was signed into law. Today, most knowledgeable observers, and particularly professional pension plan advisors, would agree that it is not only needed but is also a good piece of legislation that corrects a number of abuses. That ERISA basically is accepted by government, sponsors, advisors, and participants is no accident. It was planned.

In the almost 16 years since ERISA, there has been a veritable deluge of pension legislation and regulation. Major pension legislation was passed in 1982, 1984 (two pieces), 1986 (two pieces), and 1987. In addition, new or amended regulations have been put in place every year (sometimes several in a calendar year) by the IRS.

All this caused many problems for the private pension system, not the least of which was dereliction by the IRS in issuing regulations in a timely manner. That attitude even got the attention of Congress, which provided in one piece of legislation that the IRS be required to issue regulations by a certain date. No penalty was involved so the IRS chose to ignore the wish of Congress. It seems impossible, and certainly is indefensible, that the IRS would take 10 years to issue final regulations for 401(k) plans--but it did!

Of course, a pension plan can be set up before regulations are available, but the penalties for guessing wrong on the final requirements are so harsh that companies find it difficulto to justify taking the risk.

The impact on the private pension system has been far reaching, far from good, and far more than is necessary. Sponsors have terminated plans rather than be subject to the constant changes, thus removing altogether some employees from pension plan coverage.

Congress cani take some blame for today's not-so-friendly pension environment. It can be faulted in four areas:

* First, pension legislation has been passed for which the regulation writing responsibility has been given to the IRS with no requirements that the intent of...