The us pension fund system, Financial Management

The US Pension Fund System

The US corporate pension system has matured along with the country's demographic cycle. It consists of both defined benefit plans and defined contribution plans. For the past several decades, the US corporate Defined Benefit (DB) system has contributed significantly to the retirement needs of millions of Americans. Consequently, the aggregate long-term retirement system in America is perhaps the finest in the world. Active participants in the aggregate national DB system are now roughly equal to inactive participants (primarily retirees).

The Employee Benefits Security Administration is responsible for administering and enforcing the fiduciary, reporting and disclosure provisions of Title I of the Employee Retirement Income Security Act of 1974 (ERISA). At the time of its name change in February 2003, EBSA was known as the Pension and Welfare Benefits Administration (PWBA). Prior to January 1986, PWBA was known as the Pension and Welfare Benefits Program.

The provisions of Title I of ERISA, which are administered by the US Department of Labor, were enacted to address public concern that funds of private pension plans were being mismanaged and abused. ERISA was the culmination of a long line of legislation concerned with the labor and tax aspects of employee benefit plans. Since its enactment in 1974, ERISA has been amended to meet the changing retirement and healthcare needs of employees and their families. The role of EBSA has also evolved to meet these challenges.

The administration of ERISA is divided among the US Department of Labor, the Internal Revenue Service of the Department of the Treasury (IRS), and the Pension Benefit Guaranty Corporation (PBGC). Title I, which contains rules for reporting and disclosure, vesting, participation, funding, fiduciary conduct, and civil enforcement, is administered by the US Department of Labor. Title II of ERISA, which amended the Internal Revenue Code to parallel many of the Title I rules, is administered by the IRS. Title III is concerned with jurisdictional matters and with coordination of enforcement and regulatory activities by the US Department of Labor and the IRS. Title IV covers the insurance of defined benefit pension plans and is administered by the PBGC.

Prior to the 1978 reorganization, there was overlapping responsibility for administration of the parallel provisions of Title I of ERISA and the tax code by the US Department of Labor and the IRS, respectively. As a result of this reorganization, the US Department of Labor has primary responsibility for reporting, disclosure and fiduciary requirements; and the IRS has primary responsibility for participation, vesting and funding issues. However, the US Department of Labor may intervene in any matters that materially affect the rights of participants, regardless of primary responsibility.

 

Posted Date: 9/11/2012 1:45:19 AM | Location : United States







Related Discussions:- The us pension fund system, Assignment Help, Ask Question on The us pension fund system, Get Answer, Expert's Help, The us pension fund system Discussions

Write discussion on The us pension fund system
Your posts are moderated
Related Questions
State the meaning ofUnlimited profit sharing Unlimited profit sharing means that equity shares have an unlimited potential for dividend payments and price appreciation. Which i

need to understand some basics of changes in working capital

I just purchased a stock that would pay the dividends of the first four years as D1 = $0.65, D2 = $0.74, D3 = $0.79, D4 = $0.84. I also told that the dividends would grow continual

Discuss the risk associated with Foreign Direct Investment. How do these risks differ from those encountered in domestic investment.

You have to make a payment of $1,561.39 in 10 years. To get the money for this payment, you will make 5 equivalent deposits, starting today and for the following 4 quarters, in a b

What is Performance ratios ROCE Return oncapital employed (ROCE)= (Profit before interest and tax (PBIT) / Capital employed) * 100% ROCE measures profitability and illu

Explain about the Valuing Securities Objective of any investor is to maximise expected returns from his investments, subject to various constraints, primarily risk. Return is m

Government intervention The government might look for intervene in the take-over bid because of fears that the market share of the combined group would constitute a monopoly wh

Karl Robinson is about to make his first major decision as president and chief executive officer of Conway Control & Instrument Corporation, a manufacturer of electronic test instr

Second-Round Financing This is the introduction of further funding through original investors or new investors to enable a new organization to deal with finance growth or unexp