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Abstract

This Article examines why federal legislative policy-makers and judicial decision-makers should ascertain the impact of the transfer of risk and liability on furthering welfare and security interests and preserving organizational discretion under ERISA and public policy. Part I explains why business organizations or employers transfer risk and liability to employees and retirees. This transfer occurs where global business outcomes cause social consequences that are driven directly by business decisions responding to new global competition and less American economic standing. Part II explains the need to assess the substantive issues and public policy concerns underlying legislative acts and judicial interpretations limiting or permitting the transfer of risk and liability by employers. Part II also explains the need to consider the impact of the global business environment on domestic business outcomes causing or leading to social consequences, such as less health care or retirement funds, transferring risk and liability to employees, and retirees. Part III discusses ERISA administrative and fiduciary obligations of plan sponsors, plan administrators, and trustees; and it explains the ERISA rights and claims of plan participants and beneficiaries. Part IV examines recent federal legislation adjusting ERISA's framework by changing substantive requirements and administrative standards for asset management and plan administration of employee benefit plans in furthering security and welfare interests, preserving organizational discretion and enlarging administrative discretionary authority. Part V analyzes a decision of the Supreme Court of the United States to illustrate the substantive impact of ERISA's interpretation on the transfer of risk and liability, namely investment risk and financial liability, by a plan administrator executing an investment decision of a plan beneficiary or participant. Part VI explains the substantive and policy impacts and implications of recent legislative and judicial decisions that permit and limit the transfer of risk and liability by plan sponsors and administrators. Finally, Part VII finds that policy-makers and business decision-makers must come to grips with the fact that new global competition may accelerate the occurrence of unfavorable business outcomes, which, in turn, cause more social welfare consequences including fewer pension and welfare benefits. Therefore, fewer employee benefits create a need for both Congress to scrutinize ERISA and public policy concerns, and for the Federal Judiciary to scrutinize substantive ERISA issues in deciding whether the transfer of risk and liability to employees, retirees, and governments greatly undermines, and therefore, justifies the immediate need to adjust ERISA's objectives and framework in light of domestic and global business and social conditions.

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