One of the many questions being raised after the collapse of the Enron Corporation is what can Congress do to protect workers from the evaporation of their retirement security when their company goes bankrupt.

There is a saying that those who do not learn from history are doomed to repeat it. That is what led to the pension tragedy at Enron.

From 1962 until 1974 Congress debated a variety of plans to protect against exactly what happened at Enron. As a result of those debates, in 1974 Congress enacted the Employee Retirement Income Security Act, popularly referred to as ERISA.

The Congressional debates leading to ERISA were initiated after another Enron-like corporate collapse that caught the nation's attention because hundreds of workers lost not only their jobs but also their pensions. The company was the Studebaker Corporation of South Bend, Indiana, which was at the time a venerable U.S. automaker.

Because Studebaker had failed to adequately fund its defined benefit pension plan, when the company went bankrupt the pension plan also collapsed, leaving Studebaker retirees destitute, and its employees without their jobs or their pensions.

Congress set about designing a law that would avoid future Studebakers, and in ERISA they thought they succeeded. ERISA required that a defined benefit pension plan -- which at that time was the predominant type of pension plan -- must maintain adequate funding at all times, and must also pay annual insurance premiums to a newly created federal agency, the Pension Benefit Guaranty Corporation (PBGC), to provide federal insurance for the plan's benefits.

ERISA has worked as intended since 1974. While there have been many corporate bankruptcies producing pension plan terminations, because of ERISA the plans had been adequately funded prior to their terminations, and the PBGC insurance covered any remaining future benefits.

What Congress did not anticipate, however, was that to avoid the funding and insurance requirements of ERISA, companies would convert their defined benefit plans into 401(k)-style defined contribution plans.

Because defined contribution plans do not promise any particular benefit, but merely permit employees to save and invest as best they can, there is no obligation for the employer to maintain any funding of the plan, or provide any federal insurance.

Given these economic choices, employers abandoned their defined benefit plans in droves, thereby avoiding the employee protections Congress had worked so hard to provide. The numbers are startling. In 1975 71% of all pension plans were defined benefit plans and 29% were defined contribution plans. By 1995 only 35% of all plans were defined benefit plans and 65% were defined contribution plans.

Employers made some efforts to disguise their economic motivation by claiming that they were switching from defined benefit pans to defined contribution plans to provide new freedom to their employees to choose how much to set aside for retirement and how to invest the funds. Indeed, they dressed up their profit motive as worker empowerment.

The result of this worker empowerment is now on national display in the misery of Enron's workforce. Enron's workers relied on the Company's 401(k) defined contribution plan, which was neither funded nor insured. All of the employer's contributions to the plan were in Enron stock, and the employees had foolishly invested their own contributions to the plan in Enron stock. Accordingly, when Enron collapsed, the assets of the 401(k) plan were vaporized. Just like Studebaker 40 years earlier, overnight the Enron retirees were rendered destitute and thousands of Enron employees lost not only their jobs but their retirement security.

Hopefully as Congress again debates how to amend the law to protect against future Enrons, they will remember the lessons of Studebaker and toughen, not weaken, ERISA. Congress should seek to strengthen and restore the security of defined benefit pension plans, and encourage defined contribution plans as only a supplement to, not a substitute for, defined benefit plans.

Fortunately, IUOE members don't have to rely on Congress to protect their defined benefit plans. They protect their pensions at the bargaining table through their union contracts.