Why employer sponsored plans are important

Today, employer-sponsored plans are playing an increasingly important role in employees' overall compensation packages for several reasons. Tax reform, particularly the compression of individual income tax rates and the expansion of the tax base, has intensified the search for ways to compensate employees while minimizing the parties' resulting tax burden. In addition, the Social Security system remains vulnerable to changes in national demographics, inflation, and politics. As a result, employer-sponsored retirement plans are becoming the principal means of insuring employees' retirement security.

As the prevalence of plans has increased, so has the complexity of the law in this area. This is not surprising since law governing these plans is drawn from a number of diverse areas, including tax, labor, trust, and fiduciary law. Moreover, since ERISA's enactment, there have been numerous changes in law, which have required constant redrafting of plans and reevaluations of planning strategies. Keeping pace with these changes represents a formidable challenge.