Made this type of privatization with limited

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made this type of privatization with limited financial success o Privatization concerns is § Privatized accounts would provide no protection for individuals who are victims or fraud or who, by seeking high returns on their investments, risk and lose their money · SS and SSI program currently protect individuals against such risks § The transition to a more privatized system could incur hidden costs; one generation must pay twice, once to finance their own future retirements and again to pay for benefits already owed to other older adults in the legacy SS system · No source to cover this latter cost ever been identified What are the current trends and issues regarding employer pensions? 183-186 Employer Pensions: Retirement income systems sponsored or organized (sometimes funded in part) by employers Issues: Represent a complex legal, fiscal, and policy area In 2013, pension expenses averaged $1.35 per emyploee hour worked, an amount totaling billion of dollars Some pension programs individuals must work a minimum number of years to become eligible or vested for personal benefits This means that not every worker is going to be covered by a pension will eventually receive benefits if his or her job tenure is too short In 2012, only 42% of adult workers between 25-64 were in sector jobs that offered an employer-sponsored pension program of type; 21% of these workers who have a 401k program from their employer didn’t participate in it (workers made no contributions into 410k) Resulting in a low number likely to get benefits for retirement The employee retirement income security act of 1974(ERISA) mandates how funds must be collected and credited to employees, how employees become vested in pension plans, and how pension funds are managed Trends: DB=defined benefit; DC=defined contribution Pensions is away from what are called DB systems DB is when the employer controls a workers pension
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Workers know exactly what their pension amount will be as they approach retirement and whether the amount will grow with inflation or remain fixed Issues of DB is when the workers change jobs b/c these programs are held and managed by employers--- pensions may be frozen for those who leave after becoming eligible and often such benefits are forgotten and go unclaimed “rapidly taking over the field of pensions is DC pensions, familiar to many 401k plans” DC is a system where the worker, the employer, or both contribute to many as 401k plans that is held by an independent financial identity; this money in this fund immediately belongs to the worker, but rules limit if the individual uses this money before retirement age Benefits grow or shrink depending on the vigor of the stock market and the workers success at choosing investments because the worker has control over investment choices From 1991 to 2011 the percentage of workers with the traditional DB plans dropped from 40% to 19% of those covered DC plans has grown to be the only pension available to most “pension covered” workers today Discuss gender, ethnic, and socioeconomic variation in the “three-legged stool”.
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  • Summer '16
  • AngelaJenks
  • AGING

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