By Randy Meyers
Fifty years after it went into effect, the Employee Retirement Income Security Act (ERISA) remains the backbone of the U.S. private retirement system. However, it is also a framework whose 1970s-era design is sometimes out of sync with modern needs.
At a panel discussion during the 2026 Stable Value Investment Association Spring Seminar, three ERISA attorneys suggested that ERISA’s durability stems from its flexible design, even as that same structure has contributed to litigation risk and administrative complexity. The result, they argued, is a system that remains fundamentally sound but is increasingly in need of refinement.
Kendra Isaacson, a principal in the Insurance, Retirement, and Healthcare Practice at Mindset; Chantel Sheaks, vice president of retirement policy at the U.S. Chamber of Commerce; and Tina Anstett, an executive director and ERISA strategist at J.P. Morgan Asset Management, offered a mix of praise and frustration for ERISA. But first, Sheaks pushed back on what she said were misconceptions about the pre-ERISA retirement landscape and the so-called “golden age” of pensions.
“It’s a lie,” she said bluntly, noting that even at their peak, defined benefit plans covered only about 40% of workers. And, she said, many participants never vested in their plans prior to ERISA’s passage in 1974. (Most of the law’s provisions took effect two years later.)
Similarly, Sheaks challenged the notion that pensions were more effective in the past because plan participants tended to stay in the same job longer. In 1974, she said, average employee tenure was 5.1 years, while today it’s about 4.8. In short, she maintained, ERISA did not dismantle a universal pension system but instead imposed structure on what had been an uneven and often unreliable one.
That structure, however imperfect, was a recurring point of appreciation. Isaacson described ERISA as “a great compromise” balancing participant protections with incentives for employers to offer plans.
Anstett echoed that view, emphasizing the law’s fiduciary framework, which charges plan sponsors and administrators with making prudent decisions in the interest of plan participants. She also pointed to the requirement that plans be governed by a written document as a foundational strength.
“That’s an anchor,” Anstett said, calling it a “single source of truth” that has proven especially important in combating a wave of lawsuits filed in recent years against defined contribution (DC) retirement plans and their providers, including stable value providers.
Sheaks highlighted ERISA’s preemption of state laws as another of its critical features. Without it, she explained, employers operating plans across multiple states would face an unmanageable patchwork of requirements. Preemption allows them to maintain a single, uniform plan.
Still, the very features that make ERISA effective also create challenges. The panelists repeatedly returned to the law’s complexity and the burdens it imposes on plan sponsors.
“ERISA is complicated,” Anstett said, and to many outside the industry, “eye-wateringly boring.”
That complexity is compounded by the dual oversight of the law by the Department of Labor and the Treasury Department, which Isaacson acknowledged can make compliance more difficult. Even so, she views it as beneficial from a policy perspective because it creates more angles for pursuing legislative improvements to the law.
The panelists pointed to ERISA-based litigation as perhaps the most pressing concern for the retirement industry. Sheaks called stable value “the flavor of the day” in the current wave of litigation, citing more than two dozen lawsuits involving the asset class. In her view, the proliferation of cases—often focused on fees, investment choices, or procedural issues—has created an environment for plan sponsors in which “you’re damned if you do and you’re damned if you don’t.” She noted that the SVIA and the Chamber of Commerce have worked together to file amicus briefs in some of those cases.
The panelists were particularly critical of how ERISA’s prohibited transaction rules have been interpreted. Sheaks called them “the bane of my existence,” contending that they are both overly broad and redundant with fiduciary duty provisions.
“You can’t run your plan without having a prohibited transaction,” she said, referencing ERISA’s ban on plans entering into contracts for services without qualifying for certain exemptions.
Recent court decisions have exacerbated the issue by lowering the bar for plaintiffs to bring claims. As Sheaks explained, simply alleging the existence of a prohibited transaction can be enough to survive a motion to dismiss, opening the door to costly discovery and potential settlements.
Anstett noted that even when cases are resolved in favor of the plaintiffs, participants often reap modest benefits. “The average participant recovery last year was $68,” she said. “If you compare that to the legal fees, that is not helping.”
“All this litigation is doing is harming participants,” Anstett continued. “It’s causing (retirement plan) committees to be extremely conservative, and that only hurts the participant.”
Beyond litigation, the panelists identified as problematic certain disclosure and notice requirements that may no longer serve their intended purpose, such as the requirement to publish summary annual reports following Form 5500 filings.
“Nobody reads anything,” Sheaks said, questioning the value of lengthy participant communications that are often ignored.
Anstett further cited the complexity of required notices, including the multi-page tax disclosure for plan distributions, as evidence that simplification is overdue.
At the same time, the panelists emphasized that ERISA’s flexibility—what Sheaks described as its “Skeletor” design—remains a strength. Rather than dictating specific plan features or investments, the law provides a framework within which sponsors can tailor plans to their workforce.
That flexibility is being tested today by policymakers debating a proposed rule from the Department of Labor that would broaden DC plan access to alternative investments such as private equity and cryptocurrency. Isaacson noted that the proposed rule, issued in March, prescribes a process for selecting investments rather than specifying which investments should be offered—an approach she believes could make it more durable and less likely to be changed when new administrations take office.
Looking ahead, the panelists identified several areas where the retirement plan market under ERISA could evolve. One possible improvement would be expanding coverage of ERISA plans to a greater portion of the workforce, particularly among small employers. Sheaks pointed to pooled employer plans (PEPs) as a promising solution, allowing smaller businesses to outsource plan administration and fiduciary responsibilities.
Another improvement would be boosting participant outcomes through automation. Anstett highlighted the success of auto-enrollment and auto-escalation features where they’ve already been adopted. Isaacson emphasized the need to reduce “sludge”—frictions such as cumbersome rollover processes that discourage effective savings behavior.
Finally, the panelists called for a broader shift in how retirement policy is approached. Isaacson argued that Congress often looks at retirement plans as a source of revenue rather than a policy priority, leading to decisions that may undermine long-term savings goals. Sheaks agreed, suggesting that retirement policy should be evaluated on its own merits rather than through the lens of tax policy.
If there was consensus among the panelists, it was that ERISA’s core framework remains sound, but that its next 50 years will depend on thoughtful updates that preserve its strengths while addressing its shortcomings. And indeed, they may be forthcoming.
“We’re at a moment, an inflection point, where there is a desire … to fix this,” Isaacson said.