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Retirement Equity Act of 1984 amends ERISA.

President Ronald Reagan signed the Retirement Equity Act of 1984, which broadens the conditions under which spouses receive retirement benefits. Under the act, spouses of employees who die after attaining eligibility for pensions are guaranteed a benefit beginning at age 55; a prospective survivor must agree in a signed, notarized statement before a pension plan member can waive the option of providing a survivorship benefit (previously, the plan member had the sole right to decide); and the divorced spouse of a plan member is entitled to part of a pension, if stipulated in the separation papers or ordered by a judge.

Also, the new act:

* Requires employers to count all service from age 18 in calculating when an employee becomes vested (legally entitled to a pension, which usually requires 10 years of service). In computing the amount of benefits, all employee earnings from age 21 must be considered. (Previously, service accrual toward vesting began at age 22 and benefits were based on earnings from age 25.)

* Permits pension plan members to leave the work force for up to 5 consecutive years without losing pension credits.

* Allows plan members to take maternity or paternity leave of up to 1 year without loss of service credit for the period.

* Permits employees of companies that have thrift (savings) plans to join as early as age 21. These plans generally provide for employers to match some of the money the employee invests.

* Requires employers to explain to employees the tax consequences of taking lump-sum amounts from pension or profit-sharing plans.

Supporters praised the act, saying it "alters certain rules that in some cases allowed pension plans to ignore the changing needs of women and others in the work force."

The new provisions, which amend the Employee Retirement Income Security Act of 1974, are effective December 31, 1984. For pension plans established through collective bargaining, provisions take effect when the contract pertaining to the pension plan expires, or January 1, 1987, whichever comes first.
COPYRIGHT 1984 U.S. Bureau of Labor Statistics
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Publication:Monthly Labor Review
Date:Oct 1, 1984
Words:329
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