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The Department of Labor should establish clear protections for participants in defined benefit plans when fiduciaries wish to transfer their pension annuities to private insurance companies.
Plans that wish to offer lump-sum buyouts should be required to provide clear and complete disclosures. These should be in hard-copy form and state the implications of choosing a lump sum.
When retirement plans transfer risk from the plan to others—either by purchasing annuities from private insurers that take responsibility for paying monthly benefits or by offering retirees current
More than 30 million Americans participate in some form of public government employee retirement plan. Among others, they include:
Federal, state, and local government retirement plans are usually defined-benefit (DB) pensions with benefits based on an employee’s salary in the years just before retirement.
Modifications to retirement plans or plan formulas should hold harmless current beneficiaries and employees. They should also ensure the retirement security needs of future retirees.
Policymakers should adopt new and expanded progressive savings incentives.
Congress should make improvements to the saver’s credit. The credit should be phased out gradually and smoothly as income increases. Income limits for receiving the credit should be increased.
People are more likely to save when saving occurs automatically through mechanisms such as payroll deductions. Only about half of U.S. workers have access to an employer-sponsored retirement plan.