Magazine article Risk Management

'Forced' Retirement Savings Plan Preferred

Magazine article Risk Management

'Forced' Retirement Savings Plan Preferred

Article excerpt

In saving for retirement, nearly 68 percent of Americans would prefer that employers contribute a percentage of salary to a retirement savings plan on their behalf rather than receive the money as pay, according to a survey conducted by the Employee Benefit Research Institute and the Gallup Organization Inc. Respondents preferred to save for retirement through tax-favored employer-sponsored pension and savings plans. In addition, 59 percent of respondents said that if they left their jobs today and received a cash retirement benefit equal to three months' pay, they would save the money for retirement. That percentage grew to 82 percent if the employer transferred the benefit into an individual retirement account where individuals could not access the money before retirement without paying a penalty. Recent public policy proposals, such as the Employee Benefits Simplification Act introduced during the 101st Congress by Sen. David Pryor, D-AR, and Rep. Rod Chandler, R-WA, have tried to restrict the distribution of funds to workers prior to retirement by requiring that preretirement distributions be rolled over into other qualified plans or IRAs. Other proposals would require employers to offer simplified employee pensions on an employee's request. …

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