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
)
