Wednesday, April 11, 2007
Estreicher and Gold on The Shift From Defined Benefit Plans to Defined Contribution Plans
Thanks to Sam Estreicher (NYU) for passing along his latest piece, co-authored with Laurence Gold, entitled: The Shift From Defined Benefit Plans to Defined Contribution Plans.
Here's the abstract:
The U.S. has undergone a major shift in recent years from defined benefit pension plans to defined contribution plans. The shift has important consequences for the most Americans because defined contributed plans, in granting decision-making authority to participants, will often fail to provide adequate retirement income to individuals with median earning capacity. The authors propose a number of legal changes to reduce some of the regulatory handicaps that have attended defined benefit plans and improve the reliability of defined contribution plans as principal source of retirement income.
This piece contains some much-needed, thoughtful recommendations on how to improve the current state of employer-provided pension plans. The full paper is here.
PS
https://lawprofessors.typepad.com/laborprof_blog/2007/04/estreicher_and_.html
Footnote 10 of the article, sentence 3 suggests that the maximum §415 benefit limit in 2005 was $160,000 per year. The following is the exact quote: "In 2005, the limit was $160,000 or under four times the wages of the average full-time worker. 26 U.S.C. § 415(b)(1) (Supp. IV 2000)."
I'm sure your omission of 26 U.S.C. §415(d) (the cost of living adjustment) was simply an oversight. In fact, after the application of §415(d), the §415(b)(1)(A) limit was §170,000 for retirement ages between 62 and 65.
Posted by: Silas Harrington | Apr 12, 2007 11:11:10 AM