I recently read two articles about employers talking about renewed interest in changing plan design or reopening Defined Benefit Plans that were previously closed or frozen. Employers realize the financial difficulties workers face and are looking to enhance retirement and workplace benefits to recruit workers and help current employees feel financial more secure. Regulatory relief from the American Rescue Plan Act has also created a favorable environment for plan sponsors to consider reopening a frozen pension plan. Last years legislation helped protect contribution burdens with market volatility and has given CFO’s the confidence they can manage them.
In a June Gallup Poll, 40% of people surveyed said economic problems are the most severe issues facing the US, with 18% citing the high cost of living and 13% citing the economy in general and inflation fears.
As a father with 2 children in their 20’s and 30’s, I would like to see more private employers offer this benefit as another source of income for retirement. Defined Contribution Plans “401(k)” are great, but you are at the mercy of the volatile stock market to increase your retirement savings.
There was a time when most employers offered pension plans, like many things it seems what was old may become new again. Offering a Defined Benefit Pension Plan could be a great way for companies to attract and retain talent.
First State Trust Company acts a Trustee, Custodian and Paying Agent for Governmental Pension Plans, Defined Benefit and Defined Contribution Plans.
I can be contacted at 302-573-5972 or firstname.lastname@example.org for any questions.
James Robinson, Vice President/Trust Officer
The posts expressed are views of FSTC and are not intended as advice or recommendations. FSTC does not offer tax or legal advice, professional counsel should be sought for tax or legal advice. For informational purposes only.