The Department of Labor's Employee Benefits Security Administration (EBSA) is facing budget constraints despite an increase in responsibilities. The agency's budget has remained flat over the past 10 years, while its oversight responsibilities for health and retirement benefits have grown. The Government Accountability Office (GAO) found that EBSA has taken steps to manage its limited resources, such as focusing on enforcement cases with high monetary recoveries and moving trainings online. However, the flat budget has led to a decline in staffing. EBSA oversees approximately 747,000 employer-sponsored retirement plans and 2.5 million group health plans. The agency has identified areas for expansion, including dedicating a full division to its missing participants program and modernizing efforts to respond to 'hard-to-value' assets. The GAO recommended that EBSA develop a systematic decision-making process for allocating staff in a changing budget environment.
Lisa Gomez, the Assistant Secretary of Labor for the Employee Benefits Security Administration (EBSA), discusses the agency's work in implementing the SECURE 2.0 Act and addressing disparities in retirement benefits access. Gomez emphasizes the importance of equity in retirement and reaching underserved communities. She highlights the need for employers to offer retirement plans and encourages them to seek support and information from the government. Gomez also mentions the availability of benefits advisers and resources on the EBSA website. The article concludes with brief mentions of recent hires in the retirement industry and the impact of student loan debt on employees' financial stress.
Retirement systems around the world are facing increasing uncertainty and volatility due to various factors such as an aging workforce, the Fourth Industrial Revolution, geopolitical shocks, and high indebtedness. Governments may not be able to fully protect individuals from these risks, given historic debt burdens and fiscal constraints. In this context, the need for defined-benefit (DB) pension plans becomes crucial. Employers should take on the responsibility of providing DB plans to ensure greater financial security for employees. DB plans can help alleviate rising life insecurity more effectively than additional income. Shifting pension obligations to large, professionally managed pension pools can make them more manageable for employers. From the employee's perspective, DB plans eliminate longevity risk, reduce fund management costs, and allow for maximum investment diversification. Canada's pension system should transition back to broader DB pension coverage, as employees are willing to contribute more for greater lifetime financial security. Companies should also prioritize the social aspect of environmental, social, and governance (ESG) matters, including the livelihood of employees through pensions. Governments can support this transition by providing tax incentives for individuals and companies to join pension pools, leading to a stronger and more stable economy and increased government tax revenues.
The SECURE Act, which stands for Setting Every Community Up for Retirement Enhancement, is a piece of legislation that was signed into law in December 2019. It aims to improve retirement security for Americans by making it easier for small businesses to offer retirement plans, increasing access to retirement savings options, and providing incentives for individuals to save for retirement. The SECURE Act includes several provisions that impact retirement plans, such as the expansion of eligibility for part-time employees, the increase in the required minimum distribution age from 70 1/2 to 72, and the allowance for penalty-free withdrawals for birth or adoption expenses. The Act also includes provisions related to lifetime income options, multiple employer plans, and automatic enrollment. Implementing and administering the changes brought about by the SECURE Act is an ongoing process that requires coordination between employers, plan administrators, and employees. It is important for individuals to stay informed about the changes and take advantage of the new opportunities and benefits provided by the Act.
In conclusion, EBSA is facing budget constraints while its responsibilities for overseeing health and retirement benefits continue to increase. The agency is taking steps to manage its limited resources, but the flat budget has led to a decline in staffing. Lisa Gomez, the Assistant Secretary of Labor for EBSA, emphasizes the importance of equity in retirement and discusses the agency's work in implementing the SECURE 2.0 Act. Retirement systems around the world are facing uncertainty, and the need for defined-benefit pension plans becomes crucial. The SECURE Act, signed into law in 2019, aims to improve retirement security for Americans and includes provisions that impact retirement plans. Implementing and administering the changes brought about by the Act is an ongoing process that requires coordination between employers, plan administrators, and employees.
[6b47aa58]