Carroll Savage: ERISA Expert Who Sailed Through His Career

  • Print Page

By Debra Bruno
December 11, 2017

Carroll Savage With members in all 50 states and more than 80 countries, the D.C. Bar is beginning a regular feature to profile the people who make up our community. Read about your peers, their lives, and their work around the world.

If it wasn’t for his important role in the world of retirement benefits, this could be seen as a story of a lawyer who found another calling in sailing.

Carroll Savage, 83, did follow a midlife passion for sailing, clocking a voyage around the world on a 45-foot sailboat. But the attorney with Ivins, Phillips & Barker, Chartered also is considered one of the farsighted lawyers who helped institute a new era in retirement plans—systems that have changed the world of employee benefits.

Savage’s work helped both Congress and the rest of the country understand and implement the Employee Retirement Income Security Act (ERISA) of 1974 and the 401(k) plan, instituted in 1978. The changes, says Savage, began “at a time when companies were trying to get out from the huge liabilities they had with traditional pension plans.”

It’s uncertain whether Savage’s contributions to the retirement savings landscape will get him a place in history, or whether it might be the other part of his story. After all, not many attorneys manage to convince their law firms to let them take off as many as three months in the summer to sail around the world.

Even fewer decide to take up sailing despite never having actually learned how to sail

Savage says he was “not burned out but ready to do something different” when he hit middle age in the mid-1980s, after years of working on matters involving flexible compensation.

“I can remember many times getting phone calls at home in the swimming pool, and having to take my motorcycle and rush to the Hill on a Sunday morning to see a staff person who wanted to talk about something,” he says. “I was always putting out fires.”

Up against that reality was his romantic notion that maybe he should have been a round-the-world sailor or an undersea archeologist, “but I didn’t even know how to sail a boat,” he says. (He grew up far from the sea, in a small town in inland South Carolina, and still speaks with a gentleman’s southern drawl.)

Savage convinced his law firm to adopt a policy allowing lawyers to take an extra month of vacation every four years. He added that to his usual month-long vacation, but even two months wasn’t enough. So Savage negotiated a reduced percentage of his partnership to take yet another month off.

Next, he taught himself how to sail and navigate, and, with his wife and their blended family—two children each from their previous marriages, and two together—he “took ‘em all on board” and sailed around the world. Not every family member joined every summer, but they all had time at sea. The full circumnavigation took 12 years. Savage would sail as much as possible and leave the boat in a port with a caretaker for the winter.

It wasn’t always smooth sailing. The family left the United States in 1985, went through the Panama Canal in 1988, and reached Australia in 1990. Next, they went on to Bali and Indonesia, and found themselves in the Gulf of Aden near the Red Sea in 1991, while the Persian Gulf War was going on. “We did get shot at by some Sudanese army people who said we were in an area where we were not allowed,” Savage recalls.

Eventually, the boat retired itself, with a dead motor and a rusted-out hull, so Savage gave it up.

In 2014 he published a memoir, The Caiad: A Voyage Around the World, a 250-page work that combines his musings on philosophy, navigation, poetry, and family with the technical details of sailing. Savage says he has no regrets. “It’s been a challenge, kept my mind active, and I got to have adventures and a good family life,” he says. “So I don’t brood on it.”

Savage joined Ivins, Phillips & Barker in 1963, has been practicing in the benefits field since 1968, and is senior partner in the firm’s Executive Compensation and Benefits practice. In the 1970s he testified before Congress during hearings that led to the development of ERISA, which established minimum standards for employee pension plans in private industry. He also was involved in the 1978 amendments to the Internal Revenue Code that gave rise to 401(k) and cafeteria plans.

Prior to ERISA, companies were looking to replace the old pension system in which they contributed over the years to a fund that would go to employees on retirement. Instead, employees would add to a fund matched by the employer. (The Studebaker-Packard case, in which a plant closure in 1963 led to the company defaulting on its obligation to provide retirement funds for its hourly workers, served as a symbol for the need for pension reform.)

Today, of course, opinion is divided over whether these changes were a good thing. “You could take a negative view, as many have, and say that 401(k) basically killed the traditional pension plan,” says Savage. “But I think it was dying anyway. You could say it saved employees from what was going to be a lot worse result.”

Savage’s involvement started with his firm’s clients—Eastman Kodak and Xerox—that were some of the only large corporations offering flexible retirement programs. Another client, TRW, the Cleveland-based aerospace company, wanted to develop a system of employee benefits known as the cafeteria plan, says Savage, which allowed employees to choose between different sorts of benefits.

“I didn’t really have any Hill experience lobbying,” says Savage, but he was willing to step in to explain aspects of ERISA. “I got used to testifying before Senate committees.”

One notable difference with today, he says, was that Democrat and Republican members of Congress could work together to draft legislation. “Congress was so different in those days,” Savage says. “I’m almost nostalgic about how gentlemanly they were and how easily they reached across—they didn’t even think of it as an aisle. There was no hostility, nothing of what you see today.”