last paragraph of Conference Report No. 2656, Aug. 15, 1958, to accompany S. 2888.
Four years later, Pub.L. 87-420, § 17(e) (March 20, 1962), enacted what is now codified as 18 U.S.C. § 1954 to make criminal the offer, solicitation or acceptance of any thing of value because of, or to influence, any action, decision or other duty in connection with an employee welfare or pension benefit plan as defined by WPPDA (since amended to refer to the definitions of ERISA).
The history of ERISA is extensive and bulky. The Act as passed was the distillation of many bills, as reflected in the committee and conference reports mentioned above, and it shows that, unlike WPPDA, the object of ERISA was mainly regulatory, and the focus was centered on pension plans rather than welfare plans. As introduced and discussed, the bill would have merely amended and supplemented WPPDA, as to welfare plans, and the rest dealt with problems unique to pensions. These features deal with funding, eligibility and vesting, non-forfeitability, fiduciary responsibility, prohibited transactions, and the like. One important feature, not included in the Act as passed, dealt with portability and would have established a centrally administered fund through which accrued and vested shares in one plan could be exchanged for an equivalent or superior share in another plan when changing jobs. Provision was included for insurance, like FDIC and SIPC, in case of the financial failure of a plan, but only for pension plans, not for welfare plans.
In the end, WPPDA was not amended and supplemented, but was repealed. Administrative aspects were divided between the Department of Labor and the Treasury Department. The general provisions, as well as those dealing with reporting and disclosure, fiduciary responsibility and administration and enforcement, apply to both welfare and pension plans. The parts dealing with participation and vesting do not apply to employee welfare benefit plans by express language of § 201 and § 301. The amendments to the Internal Revenue Code, by the addition to Title 26 of §§ 410-415 deal only with pension plans and not with welfare plans. The same is true of the amendments to 26 U.S.C. § 401, and by the addition of 26 U.S.C. §§ 6057, 6058 and 6059. The addition of § 1131, at the end of Part A of Title XI of the Social Security Act (42 U.S.C.A. § 1320b-1), imposing duties on the Secretary of HEW, deals only with pension plans and not with welfare plans. The addition of § 7476 to Title 26, to authorize declaratory judgments in the Tax Court, is limited to retirement plans in the form of (1) a pension, profit-sharing, or stock bonus plan; (2) an annuity plan described by § 403(a), and (3) a bond purchase plan described in § 405(a). All are pension plans; none is a welfare plan.
The provisions in respect to the Pension Benefit Guaranty Corporation (ERISA §§ 4001-4068), also apply only to pension plans and not to welfare plans.
Other criminal statutes which had been enacted by supplement to WPPDA, such as 18 U.S.C. § 664 (embezzlement or conversion from employee benefit funds) and 18 U.S.C. § 1027 (making any knowingly false statement in any document required by the Act), were amended to substitute references to ERISA rather than to WPPDA, and apply to both welfare and pension plans, as does 18 U.S.C. § 1954 (kickbacks).
These criminal statutes roughly parallel analogous statutes dealing with federally insured banks, such as 18 U.S.C. § 656 (embezzlement or misapplication by a bank officer), 18 U.S.C. § 1005 (false entries in bank records); 18 U.S.C. § 1014 (false statements in loan applications) and 18 U.S.C. § 215 (kickbacks on loans, etc.).
From this history and analysis, it is plain that from the entire universe of welfare and retirement plans, the Congress has chosen to legislate to encourage some of them by favorable tax treatment in the Internal Revenue Code, and, in the case of those employee oriented plans covered by WPPDA, acted between 1958 and 1975 to require certain reporting and disclosure but did not regulate, and since 1975, by ERISA, has undertaken to regulate, such plans to the extent that they are pension plans.
Except as included in one or another of these federal statutes, the Congress has not enacted any law dealing with other kinds of plans in the universe of plans, whether constructed on an individual basis or by groups other than those composed of employees of an employer or groups of employers or of employees.
Natural persons thus remain free of federal law of this kind to establish individual, family and group plans or programs to deal with all the countless risks that life in a complex society entails. They may design all manner of savings plans, from the simple bank account at interest on through term certificates, T-bill certificates, on to sophisticated investment portfolios of debt and equity securities. They may invest in land or other property. They may buy insurance of all kinds, whether of an indemnity or investment nature, including protection against the risks of fire, lightning and extended coverage risks; burglary, theft and mysterious disappearance; homeowners' and automobile or water vessel or aircraft liability; hospital and medical expense policies, including major medical and disability benefits whether caused by accident or sickness; life insurance in all its variations, from term to endowment; and annuities. This list does not exhaust all the available choices freely available on a voluntary basis, which may play a part in establishing individual or group programs for providing security against risks.
Yet, except in peripheral ways, such as through the SEC, and through regulating interest rates and terms of various kinds of deposits in banking institutions, federal law does not attempt any direct regulation of that part of the field. So much as has been dealt with, mainly in the Internal Revenue Code, WPPDA and ERISA, has been confined to matters of special tax treatment, to reporting and disclosure, and to rather strict regulation of plans that are employer/employee oriented, except for the very recent developments, mostly with tax consequences, of bHR-10 or Keogh Plans and IRA's in an effort to provide means to those outside the traditional labor/management sphere to achieve some measure of equal tax treatment in respect to pensions and retirement.
So far as the regulation goes, its major aim is to establish minimum standards for eligibility and vesting, and to require suitable funding to minimize the risk that there will be insufficient funds to provide the benefits specified by the plan. By and large the Congress has not made the establishment of any plan mandatory, nor has it attempted to specify what the particular benefits are to be.
Thus, there is nothing illegal or forbidden about establishing a plan that would otherwise fall within ERISA, for example, but that fails to qualify with its requirements. The only consequence of such a course of action is that by failing to qualify, the tax benefits otherwise available will be denied. If someone wishes to follow that course he is free to do so. ERISA itself makes it explicit that the participation and funding provisions of an employee pension benefit plan, 29 U.S.C. § 1051 through 1061, do not cover (among others)
... an unfunded plan maintained by an employer primarily to provide deferred compensation for a select group of management or highly compensated employees (29 U.S.C. § 1051(2));
... a plan of a labor organization described in 26 U.S.C. § 501(c)(5) which has no provision for employer contributions after September 2, 1974 (29 U.S.C. § 1051(4));