The us pension fund system, Financial Management

Assignment Help:

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.

 


Related Discussions:- The us pension fund system

Types of financial assets, Types of Financial Assets Majority of financ...

Types of Financial Assets Majority of financial assets used worldwide are in the form of deposits, stocks and debt. Deposits Deposits can be made either with banking or

Investable capital market portfolio, The Total Investable Capital Market Po...

The Total Investable Capital Market Portfolio According to a report prepared by McKinsey in January 2007, World financial assets including bonds, stocks, corporate debt securit

Interpretations of long term solvency or liquidity ratio''s, Long Term Solv...

Long Term Solvency or Liquidity Ratio's   DE:          The Debt Equity ratio exhibits the relation that exists between debt and proprietor's fund and is considered a very im

Calculate profitability index, XYZ Ltd is a manufacturer and distributor of...

XYZ Ltd is a manufacturer and distributor of agricultural equipment. XYZ produces milking machines and supplies as well as being the sole Australian distributor of machinery from t

Conversion premium , The amount by which the market price exceeds the...

The amount by which the market price exceeds the conversion value or the investment value is called as the premium.

Pension fund management, Pension fund management Pension fund systems o...

Pension fund management Pension fund systems ought to be carefully designed and supervised to make sure that their purposes are met, the economic consequences are appropriate a

Term money, Short-term funds having a maturity of 15 days and over ar...

Short-term funds having a maturity of 15 days and over are categorized as term money. Banks access this term money route to bring greater stability in their short

What number of seats generates that maximum revenue, Q. In planning a resta...

Q. In planning a restaurant, it is estimated that a revenue of $6 per seat will be realized if the number of seats is at most 50. On the other hand, the revenue on each seat will d

Scenario analysis for a portfolio manager, A portfolio manager would ...

A portfolio manager would never prefer to make investment decision based on just one set of assumptions. Instead, he would evaluate the outcome of the selected st

Policy conflicts in debt and monetary management, Policy Conflicts in Debt ...

Policy Conflicts in Debt and Monetary Management: Co-ordination of operations is important so as to avoid differences in the policies of cash and debt management of the governm

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd