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WASHINGTON, D.C., May 8, 2024
/PRNewswire/ -- In response to a request for information issued by
the U.S. Senate Health, Education, Labor, and Pensions (HELP)
Committee, the National Institute on Retirement Security (NIRS)
today submitted a research issue brief with six policy
recommendations to help expand defined benefit (DB) pension
coverage for private-sector employees.
The research brief, Policy Ideas for Boosting Defined Benefit
Pensions In The Private Sector, indicates that expanding access
to pensions should focus on plan design to meet the key goals of
retirement plans: broad participation, shared financing, targeted
income replacement, pooled investment and longevity risks, and
lifetime benefits. Read the research.
Register for a webinar today, Wednesday,
May 8, 2024, at 2:00 PM ET for
a review of the research with the report authors.
The research indicates that future policy solutions must address
two key issues. First, private-sector pension plans should provide
an avenue for retirement adequacy for the large majority of
Americans lacking pensions regardless of their demographic profile
and income. Second, private-sector pension plans must be affordable
and sustainable for employers. The research offers six
recommendations for Congress to consider to help expand pension
coverage in a manner that is workable for both employers and
employees:
- Lower the per-person rate of Pension Benefit Guaranty
Corporation (PBGC) premiums for single-employer pension plans.
- Reduce the variable rate PBGC premium.
- Formally acknowledge in statute risk-sharing plans.
- Permit greater flexibility in the use of funding surpluses in
DB plans.
- Allow pre-tax employee contributions in private-sector pensions
similar to state and local government pension plans.
- Formally acknowledge in statute that retirement benefits should
be fungible for each individual and allow transfers
from defined contribution plans to pension plans (and conversely)
in the vein of Revenue Ruling 2012-4.
The report is authored by Tyler
Bond, NIRS research director; Dan
Doonan, NIRS executive director; Michael Kreps, Groom Law Group principal;
John Lowell, October Three
Consulting partner; Jonathan Price,
Segal senior vice president and national retirement practice
leader; and Zorast Wadia, Milliman principal and consulting
actuary.
"We remain encouraged that the Senate HELP Committee is taking
action to address the retirement savings crisis facing middle class
Americans," Dan Doonan said. "The
recommendations set forth in this issue brief offer pragmatic ways
to ensure more working Americans will have access to a pension that
delivers adequate retirement income that won't run out. As
importantly, these policy solutions will help ensure pension costs
are sustainable and predictable for employers. American workers and
employers deserve a sustainable, win-win solution, and there indeed
is a way to get there."
Earlier this year, Doonan testified before the Senate HELP
Committee about the scope of the retirement savings shortfall. He
said the move away from pensions is a major culprit in the nation's
retirement crisis and serious policy discussions about rebuilding
retirement security must include increasing pension coverage.
Research finds that pensions provide reliable lifetime income for
employees, are economically efficient, provide workforce benefits
to employers, and deliver substantial economic impacts to
communities across the nation, especially rural areas.
Read Doonan's written testimony submitted to the HELP
Committee.
The National Institute on Retirement Security is a
non-profit, non-partisan organization established to contribute to
informed policymaking by fostering a deep understanding of the
value of retirement security to employees, employers, and the
economy as a whole. Located in Washington, D.C., NIRS membership includes
financial services firms, employee benefit plans, trade
associations, and other retirement service providers. More
information is available at www.nirsonline.org.
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SOURCE National Institute on Retirement Security