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Special Message to the Congress on Employee Benefits Protection.

March 13, 1970

To the Congress of the United States:

In his First Annual Message in 1901, President Theodore Roosevelt wrote: "The well-being of the wage-worker is a prime consideration of our entire policy of economic legislation."

The United States of America has changed in innumerable ways in the almost seventy years since those words were written. Yet, despite the changes that have transformed our economic and social life, the profound truth of those words remains: today the well-being of the workingman is a prime consideration of this Administration.

Last year I sent to the Congress legislation dealing with Manpower Training, Unemployment Insurance and Occupational Safety and Health.

The Manpower Training bill deals with how we can help a jobless man get work or help the workingman move on to better-paying and more challenging jobs.

The Unemployment Insurance bill deals with how we can help the workingman when he is temporarily out of work.

The Occupational Safety bill deals with how we can help the workingman to do his job under the best possible conditions of health and safety.

This legislation has now been before the Congress for more than seven months. And while I know that all of these bills are in one stage or another of the Congressional process, I am hopeful that they will be enacted promptly and sent to me for signature. I urge the Congress, for the sake of the American workingman, to reach final action on these measures without further delay.

This legislation concerns the American workingman on and off the job. Yet there is another important part to the average workingman's life: after his working years, the time when he can begin to enjoy his pension and welfare benefits.

The earliest known industrial pension plan in this nation was established in 1875. Today, less than one hundred years later, there are hundreds of thousands of employee benefit plans providing pension and welfare benefits to some 50 million workers.

Welfare and pension plans are a part of the success story of the American workingman. Employee benefits are among the most familiar--and most admired--aspects of economic life in our nation.

These plans involve over one hundred twenty billion dollars. More important, they involve the security, the dignity and the well-being of millions of Americans whose lives have been enhanced upon retirement or on the job by welfare or pension benefits. The control of these funds is shared by employers, unions, banks, insurance companies, and many others. While most of the plans are carefully managed by responsible people, we must make certain that the employee's money is fully protected.

I am therefore proposing the "Employee Benefits Protection Act." This Act would protect employees with pension fund rights against improper investments and conflict of interest on the part of administrators of these funds. This has never before been done by the Federal government.

The reforms proposed in the Employee Benefits Act can be divided into four major areas:

First, the Federal government would require that persons who control employee benefit funds must deal with those funds exclusively in the interest of the employee beneficiaries. A Federal standard of these obligations would more effectively provide a remedy where conflict of interest or carelessness exists in the management and investment of funds.

While these situations are infrequent, existing State and Federal laws are inadequate to deal with them. Theft, embezzlement, bribery, and kickbacks in connection with employee benefit plans have been made Federal crimes in earlier Congressional action, but conduct that breaches established principles of trusteeship has not been adequately dealt with.

Second, the reporting and disclosure provisions would be broadened and strengthened by requirements which call for additional information. Further and more detailed disclosure as to the financial operations and actuarial basis of employee benefit plans is a necessary complement to the imposition of fund management obligations and responsibilities. It is well established that those in a trustee-type relationship should give a detailed accounting of their stewardship. This type of accounting is similar to requirements presently applicable to mutual investment funds, banks, and insurance companies. However, the present reporting and disclosure provisions for employee benefit plans are more limited. The proposed Act would make available to employees vital information about the plans that are run for their welfare and retirement.

Third, changes would be made to implement the newly imposed management responsibility and the newly strengthened reporting provisions. These include broadened investigatory and enforcement powers for the Secretary of Labor and revisions designed to provide an alternative mode of enforcement of remedies through class actions by participants and beneficiaries.

Fourth, the Act would foster a body of uniform Federal law in employee benefits protection. State laws that otherwise regulate banking, insurance and securities are expressly allowed to remain in effect.

In summary, the Act would provide for a uniform source of law for evaluating the conduct of persons acting on behalf of employee benefit plans and for a single system of reporting and disclosure in lieu of burdensome multiple reports. Under the Act, States could require the filing with a State agency of copies of specified reports and State courts as well as Federal courts would be available to provide remedies. Furthermore, the Act would expressly authorize cooperative arrangements with State agencies as well as other Federal agencies. It would also provide that State laws regulating banking, insurance and securities remain unimpaired. Finally, experience in administering the present law has demonstrated that minor technical amendments are needed to resolve certain details of procedure and to otherwise make the law more workable.

The Employee Benefits Protection Act further expands my program to protect the American worker as he works, when he is out of work, and after his working career is over. Once again, I must express my concern that the first three parts of this program--relating to Manpower Training, Unemployment Insurance, and Occupational Safety--have been so long before the Congress without final action. And again I urge the Congress to enact these measures at the earliest possible date and to give urgent priority to this fourth part of the program--the Employee Benefits Protection Act.

America's most valuable asset is its workers. From their skills and from their determination to build a better life for themselves and their children has come a strong and free economy and a nation whose prosperity is unmatched in the history of the world. They deserve our active interest in their welfare.

RICHARD NIXON

The White House

March 13, 1970

Note: Also on March 13, 1970, the White House Press Office released the transcript of a news briefing on the President's message by Secretary George P. Shultz, Laurence H. Silberman, Solcitor, and W. J. Usery, Jr., Assistant Secretary for Labor-Management Relations, all of the Department of Labor.

Richard Nixon, Special Message to the Congress on Employee Benefits Protection. Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/240986

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