'Ninety-Five Percent of Them Will Not Be Missed': Recovering the Tax Shelter Limitation Aspect of ERISA

27 Pages Posted: 23 Mar 2014 Last revised: 2 May 2014

Peter J. Wiedenbeck

Washington University in St. Louis - School of Law

Date Written: March 21, 2014

Abstract

ERISA is justly hailed as a paramount achievement in labor and social welfare legislation. The worker-protective elements of ERISA get most of the attention. Yet Congress also emphasized that employee benefit plans “substantially affect the revenue of the United States because they are afforded preferential Federal tax treatment” which justified a coordinate declaration of policy, “to protect...the Federal taxing power”. ERISA § 2(a), (c), 29 U.S.C. § 1001(a), (c). The tax-subsidized but largely unregulated regime that preceded ERISA facilitated widespread tax abuse. Reducing wasted revenue by focusing preferential tax treatment on plans providing retirement savings to a broad cross-section of the workforce — not just to the business owners — is the often-overlooked dual objective of ERISA. This article seeks to recover the tax shelter limitation aspect of ERISA. Part II briefly explains the origins of ERISA’s tax controls. Part III surveys ERISA’s accomplishments and limitations in suppressing pension tax shelters. Part IV describes later momentous developments to which ERISA pointed the way.

Keywords: ERISA,employee benefit law, pension plans, qualified retirement plans, tax shelters

Suggested Citation

Wiedenbeck, Peter J., 'Ninety-Five Percent of Them Will Not Be Missed': Recovering the Tax Shelter Limitation Aspect of ERISA (March 21, 2014). Drexel Law Review, Vol. 6, Issue 2, 2014 ; Washington University in St. Louis Legal Studies Research Paper No. 14-03-05. Available at SSRN: https://ssrn.com/abstract=2412708

Peter J. Wiedenbeck (Contact Author)

Washington University in St. Louis - School of Law ( email )

Campus Box 1120
St. Louis, MO 63130
United States

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