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Congress urged to 'protect and enhance' retirement system

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The ERISA Industry Committee, known by the acronym ERIC, has cautioned the Senate Finance Committee to be careful about any changes to the Employee Retirement Income Security Act. ERIC submitted comments to the committee urging them to enhance the current system so that it promotes more retirement savings by American workers. In a press release, the organization urged Congress to "protect and enhance the retirement system to allow future generation to properly prepare for retirement."

It was not reported what steps the senators might be considering that could undermine Americans' ability to save for retirement. Last fall, however, the Pensions & Investments website ran a commentary in which the writer argued that ERISA had become too bogged down in amendments and regulations. The resulting inflexibility, he said, was driving businesses away from offering ERISA-defined benefit plans to their employees.

ERIC says that plan design and funding have to remain flexible for our retirement system to thrive. It argues that "one-size-fits-all approach" regarding ERISA regulations does not recognize the challenges that employers face in providing benefits to employees. The group says that changes in the way that savings in employer-sponsored plans are taxed could endanger the whole system in an economic climate where "retirement savings are not enough to meet future needs."

People are changing the way they work. With the Affordable Care Act, they no longer have to stay in a job they hate just to have health insurance. Some are starting their own businesses, becoming independent contractors or working part time in order to spend more time with their children. However, one thing that doesn't change is the need to prepare financially for retirement and to know that the money you've saved in an employer-sponsored plan is there when you need it. That's why it's important to keep an eye on any changes to ERISA regulations.

Source: BenefitsPro.com, "ERISA group urges Senate caution on retirement changes," Matthew Stern, April. 14, 2015

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