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When Did Workplace Pensions Become Law in the USA?

Updated: May 18, 2022

Workplace pensions are legally required to offer employees some form of pension plan, with the details depending on your location and the industry you work in.

In this article, we’ll examine when workplace pensions became law, what they are, and how they work.

We’ll also go over some of the pros and cons of workplace pensions, so you can decide if they’re right for you. Lastly, we’ll discuss some tips to help you manage your workplace pension account and make smart decisions with it.

When Did Workplace Pensions Become Law in the USA

The early 1900s

In 1912, President Taft signed Executive Order 8407. This order required federal employees to participate in a pension system run by their employer (and funded by both employees and their employer).

This was an important moment for workplace pensions because it set precedent for private-sector employers: if you want to attract quality talent, it’s not enough to just offer good pay—you also need an attractive benefits package. In 1935, Social Security Act became law.

How workplace pensions changed over time

The shift from defined-benefit pensions to defined-contribution plans is a recent development.

In 1983, just 8 percent of U.S. private sector workers participated in defined-contribution plans, and more than 40 percent were enrolled in defined-benefit pensions, according to an analysis by Alicia Munnell, director of Boston College’s Center for Retirement Research.


The 1980s were a particularly difficult time for pensions, since employers and employees were increasingly looking to lower their expenses.

The Employee Retirement Income Security Act of 1974 (ERISA) was supposed to protect workers’ pensions by preventing employers from siphoning off pension funds; however, no one really bothered to enforce it.

Throughout most of history, work was seen as something you did in your early 20s and quit when you reached retirement age.

The 21st century

In 2001, President George W. Bush signed into law a bill that made it illegal for employers to deny their employees access to a 401(k) or other retirement savings plan.

The pension age was also bumped up by two years as of 2012—this means if you’re 62 now, you won’t be eligible for Social Security benefits until age 66.

When Did Workplace Pensions Become Law in the USA - The Bottom Line

Pensions aren’t what they used to be. Thirty years ago, companies provided workers with retirement plans that guaranteed a certain monthly check after retirement.

Nowadays, most companies don’t offer pensions; instead, they provide 401(k) plans—policies that have some similarities to pensions but are far less secure.

However, in 1980, Congress passed legislation requiring employers to offer pension plans for their employees or else face penalties.

This law had an immediate impact on workplaces across America.

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1 Comment

Jun 13

This legislation highlights a commitment to supporting workers' long-term financial well-being through structured retirement savings plans. Understanding the historical context and impact of these laws is critical to advocating for fair benefits and retirement provisions in the modern workplace. For protection, you can use the services of a nurse lawyer, they are guided by health care rules to protect your rights.

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