A news release from the National Institute on Retirement Security (NIRS) charged that the legal and regulatory framework governing pension plans “created funding volatility for companies sponsoring pensions, rather than facilitating predictable costs that enable companies to effectively manage cash flow.”
According to NIRS:
- Companies may not understand that employees value pension benefits. NIRS research indicates that nearly nine out of ten Americans believe all workers should have a pension to help ensure retirement security, and 84% believe policymakers should make it easier for employers to offer pensions.
- Private-sector industry shifts have seen fewer new industries offering pensions. For example, the number of domestic manufacturing jobs with long-tenured employees has declined, while there has been a growth in information technology companies that typically have employees with shorter average tenures.
NIRS recommended that:
- pension law be changed so that plan funding is less volatile,
- employees be given a way to share the cost of pensions by allowing pre-tax contributions,
- pensions be made portable, and
- officials create an avenue for third-party sponsorship of a pension plan.
“Americans soon will start to feel the sharp sting of the trend away from pensions as the first of the 78 million Baby Boomers turn 65 this year,” said Diane Oakley, NIRS executive director, in the news release. “This retirement shortfall will have negative consequences for individuals, the U.S. economy, the job market, and governmental public assistance programs. It’s a troubling forecast.”
The group’s research brief is here.