Brief Storm Clouds Ahead for 401(k) Plans?
Pamela Perun
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Designed to promote retirement saving, the Pension Protection Act of 2006 clarified auto-enrollment, auto-contribution, and auto-investment rules in employer 401(k) plans. Early evidence suggests that the legislation boosted these plan features and increased employee participation in 401(k) plans. It is too soon to gauge the act's ultimate success, however, because it hinges on the number of new participants that will eventually amass substantial account balances. Adding to the uncertainty, the recent LaRue Supreme Court decision, which highlights the legal liability that employers face as plan fiduciaries, could undermine future retirement security by making some employers reluctant to sponsor plans.
Research Areas Economic mobility and inequality Wealth and financial well-being Aging and retirement
Tags Economic well-being Pensions Wages and nonwage compensation Income and wealth distribution Retirement policy Wages and economic mobility
Policy Centers Income and Benefits Policy Center