Storm Clouds Ahead for 401(k) Plans?

Presents a preliminary assessment of whether the automatic 401(k) plan features approved in 2006 are encouraging employers to offer plans and employees to save. Discusses the potential impact of a lawsuit over an employer's management of a 401(k) account

FAQs about Employees and Employee Benefits

This primer is an introduction to the basic laws of employee benefits. It is often assumed that there are legal impediments to employers providing benefits to phased retirees, part-time workers and the contingent workforce. From a benefits law perspective, this is really not true. By statute, self-employed workers are sometimes excluded from plans required to be employee-only but employers face few other prohibitions when designing their plans. From an employer’s perspective, there are far more impediments to excluding these workers from their benefit plans than including them. Tax law provides incentives to employers who sponsor plans and to workers who participate in them. But tax law also insists that this special treatment should not be available only to high-paid workers. So today’s regulatory structure is intended to compel employers to include a substantial number of rank-and-file and lower-paid workers in their plans in exchange for favorable tax treatment for high-paid workers. This primer illustrates this regulatory structure by focusing on the basic rules for eligibility and participation in the most common plans. It is in part an exercise in mapping the employee benefits universe. It is written from the perspective of an employer and highlights questions that an employer must answer when designing a particular plan. Those questions range from “who is an employee” to “how many low-paid workers must I include” to “what benefits may I offer and to whom?

Why Not a "Super Simple" Saving Plan for the United States?

Describes a basic, low-cost plan to help workers build savings, with minimum employer contributions for low- and moderate-income employees, automatic employee contributions, a significant government match, streamlined retirement plans, and fairer rules

Reality Testing for Pension Reform

The US private pension system is at a crossroads. Its future direction is now under intense scrutiny by Congress, which has recently considered two very different proposals for change, each containing elements likely to be on the national agenda for some time. One approach embodies a traditional approach to pension reform, with an omnibus statute that tinkers with almost every aspect of the private pension system to make incremental changes. A second seeks to bring radical change and simplification, with sweeping consolidation of the number and types of defined contribution plans. This chapter evaluates these two approaches, one for incremental change, the other for structural reform, and then considers an alternative. Our analysis focuses on the nuts-and-bolts of the private pension system, the plans that comprise it, and the rules that govern them that have accumulated over the past 60 years. Our thesis is that an analysis of the architecture and machinery of the private pension system can teach us a great deal about how to redesign the private pension system to meet retirement income challenges to come

Entitlement Reform and the Future of Pensions

Reform of retirement and health care entitlements is inevitable, but its ultimate format remains uncertain. Any entitlement reform should take advantage of the additional resources provided by economic growth and the rise in demand for and supply of older workers. Recognizing the potential from those two forces argues for constructing reforms aimed largely at three goals: better orientation of public-sector retirement resources to needier and older populations; removal of obstacles to increased employment of older workers; and private-pension reform that provides the long-sought second tier of support in older ages