Pension News

Last week the federal minimum wage rose to $6.55 an hour, increasing the annual earnings for a full-time minimum wage worker to $13,624.  While it’s certainly the right move for Congress to raise the minimum wage for current workers, it raises an important question about retired workers.  Take a look at our statistics page and you’ll see why: The average retired worker’s Social Security check is now less than that of a minimum wage worker. (more…)

When I was head of the Employee Benefits Security Administration (the Department of Labor agency charged with protecting pensions) during the Clinton administration, I became concerned about whether or not people who had 401(k) plans truly understood how much they were paying in fees and what those fees were for. So in 1997 and 1998, we held hearings and issued a report [PDF] on the issue.

A couple of months ago, I decided to take another look at the 1998 report to see what had changed in the last 10 years. (more…)

In an earlier blog post, we discussed efforts in Congress to make it easier for people to withdraw money from their 401(k) accounts to save their homes from foreclosure. Such withdrawals are part of a larger problem with 401(k)s known as “leakage” (what a lovely name!) – loans, early withdrawals, and lump-sum payouts that reduce or deplete a worker’s retirement savings account long before the worker actually retires. Between withdrawal penalties, interest charged on loans, and the overall reduction in their retirement savings, “leakage” has long-term consequences that many workers aren’t aware of until it’s too late. (more…)

Too often we hear bad news stories about how public pension plans are underfunded and that they’re a drain to taxpayers. But a congressional hearing last week told a different story. The hearing, Your Money, Your Future: Public Pension Plans and the Need to Strengthen Retirement Security and Economic Growth, focused on how public sector pensions efficiently provide adequate retirement income to a large segment of the workforce. (more…)

Last month, the United States Supreme Court addressed the issue of how courts should review a benefit plan’s denial of an application for benefits. The results were mixed for workers and retirees. (more…)

In down economic times, it isn’t uncommon for people to feel the urge to dip into their assets to help make ends meet. Therefore, it isn’t a surprise to hear that more and more people are borrowing from their 401(k) plans for a little extra cash. Some people are even paying hefty taxes to permanently withdraw money from their 401(k)s . (more…)