Martin (Marty) I. Slate

Martin (Marty) I. Slate passed away in 1997. He was inducted as an In Memoriam Fellow of the American College of Employee Benefits Counsel in 2000.

Marty graduated magna cum laude from Harvard University in 1967 and earned his law degree at Yale University in 1973. In 1988, he earned a master's degree in laws in taxation at Georgetown University Law Center. He served as an adjunct professor of taxation at Georgetown from 1988 to 1993.

Following graduation from Yale, Marty spent 12 years with the Equal Employment Opportunity Commission (“EEOC”), initially as a trial lawyer, then as Director of the Chicago regional office, and later as the EEOC's Director of Field Operations.

From 1986 until 1993, Marty served as director of the Employee Plans Technical and Actuarial Division of the Internal Revenue Service, where he headed a 180-member staff. At that time, no formal correction program existed for qualified plan defects. As a result, upon discovery of a qualification failure (no matter how minor or insignificant), a plan sponsor who disclosed the failure to the IRS had no firm assurances that the failure could be corrected, or at what cost. This often led to plan sponsors choosing to attempt self-correction with the hope that the plan would not be audited. The lack of administrative correction mechanisms of general applicability proved to be burdensome to the IRS as well. Field agents who discovered qualification errors on audit were reluctant to impose disqualification as a sanction, particularly where rank-and-file participants would suffer adverse tax consequences. This resulted in the uneven and unpredictable application of the revenue laws.

Marty initially attacked this problem by preparing a scholarly and comprehensive analysis detailing the legal basis for the grant of IRS relief with respect to qualified plan defects. His analysis was published by BNA as a Tax Management Memorandum Special Report entitled “The IRS ’Use of Section 7805(b) in the Qualified Plan Area: An Analysis” (February 13, 1989). Marty then applied these legal principles towards the development and implementation of self-correction programs that later became building blocks and part of the Employee Plans Compliance Resolution system, a staple in retirement plan practice. For his contributions to and innovations in the qualified plan area, he was honored with the IRS Commissioner's Award.

Marty was appointed Executive Director of the Pension Benefit Guaranty Corporation (“PBGC”) in 1993. At that time, many public officials were warning that the PBGC’s financial condition could make it an eventual candidate for a taxpayer-subsidized bailout along the lines of the savings and loan industry bailout in the 1980s. The agency then was laboring under a $4 billion deficit, which was expected to grow. Mr. Slate, upon taking over as PBGC chief, immediately took steps to cool the rhetoric. He described the agency's financial situation as serious and real, but manageable.

After Secretary of Labor Robert Reich appointed him chairman of an administration task force charged with examining the PBGC's financial problems and drafting legislation to ease those problems, Marty quickly reached out to the business community for its input. He won the respect of the business community not only for his knowledge of pension issues, but also for his honesty, integrity, and accessibility. For several years, he worked with stakeholders on legislation to close many of the loopholes in federal law that had allowed companies to seriously underfund their pension plans, exposing the PBGC to massive liabilities when those companies collapsed. Mixing a bulldog-like tenacity with strategic legislative skills, he became the architect and driving force behind the Retirement Protection Act of 1994 (“RPA”). As a result of Marty’s efforts, the agency’s deficit was eliminated in 1995. The agency continued to operate in a surplus position for six years (in fact, these were the only years in the history of the PBGC when the agency had not been in a deficit position).

During his tenure at the PBGC, Marty devised a program to alert the agency to early signs that a pension plan might be headed for financial trouble. His efforts won the agency an Innovations in Government Award from the John F. Kennedy School of Government at Harvard University.

Practitioners appreciated Marty as a man who behaved not as a bureaucrat but as a public servant. He never worried about his turf or whether something had ever been done before, but instead focused on what needed to be done to get the best result. Above all, Marty had a big heart with great compassion for those in need of assistance. As a young man, he marched in Selma, Alabama during the height of the civil rights movement. He later created a scholarship program to help minority lawyers at the Internal Revenue Service earn advanced degrees in taxation. When working towards passage of the RPA, he successfully advocated for the inclusion of a missing participant program to find people who were due pension benefits but had not collected them, and then oversaw the PBGC’s implementation of that program.

Marty died much too young at age 51. A few months after his passing, President Clinton made an appearance to discuss the state of pension security in America. At one point, he referenced a chart illustrating that the PBGC was running the first surplus in its history, and then commented as follows:

“Let me say, when I look at that chart it is a bittersweet experience for me, because a great deal of the credit for turning the Pension Benefit Guaranty Corporation around goes to my friend, the late Marty Slate. … He spent almost his whole life working to make sure that our laws were fair and applied justly. We saw him put that commitment on the line time after time -- as a Freedom Rider in the south, as a visionary creating a scholarship program for minority lawyers at the IRS, as a dear friend in so many ways. Marty Slate was the quintessential public servant. I'm proud that I appointed him to direct the Pension Benefit Guaranty Corporation in its hour of crisis and need. It's one of the best decisions that I have made as President. Thanks to him, millions of workers ... can sleep better at night knowing their pensions are safe and secure. I really wanted to have a chance to say that one more time in public."

Photo Source: The Decade Book, American College of Employee Benefits Counsel 2000-2010