Employee Benefits


Phased-in retirement plans—in which, for example, employees receive a portion of their pension benefits while earning a salary—are attracting attention as skilled labor shortages persist and many older employees work past normal retirement age to supplement their inadequate savings. A new report from the Employee Benefit Research Institute says educational institutions and state and local governments face fewer legal and regulatory obstacles to such plans than do private-sector employers and, therefore, are more likely to adopt them. ( www.ebri.org/prrel/pr576.htm )

Much of the opposition to proposals allowing workers to invest their Social Security contributions in stocks is based on misconceptions, says a new study from the Cato Institute. For example, researchers say, the Social Security Administration’s ability to pay retirement and survivors’ benefits would not—contrary to some reports—be diminished by letting wage earners invest a portion of their withholdings in equities. Instead, they argue, such a strategy would inject $10 trillion to $20 trillion into the U.S. economy and nearly triple benefits for workers—assuming only a 4% real return. Consequently, the study’s authors recommend granting workers a greater role in the financial management of their retirement contributions—a process now governed solely by the SSA and over which taxpayers have no direct influence. ( www.cato.org/pubs/briefs/bp68.pdf )

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QUIZ

News quiz: Senate health care bill in the spotlight

Reports related to the Republican bill to repeal many provisions of the PPACA, other tax issues, and the giant AICPA ENGAGE Conference offered a diverse reading list for June. See how much you know about recent news with this short quiz.