US - Employers are unable to implement phased retirement programmes because federal rules on pension schemes preclude using qualified retirement plans, according to testimony from a Watson Wyatt retirement consultant.
While a number of employers would like to retain older, more experience workers through the use of phased retirement systems, they are hindered by the prohibition against pension distributions to actively working employees who have not attained normal retirement age, Valerie Paganelli, a senior retirement consultant at Watson Wyatt told the Special Senate Committee on Aging during a hearing.
“The United States faces unprecedented retirement policy questions,” said Paganelli. “It is imperative that we allow for the flexible adoption of alternative forms of retirement programs.”
Paganelli recommended that employers be allowed to distribute funds from pension savings to active employees who have not reached normal retirement age but who want to reduce their work schedules and stay with their current employer. She also recommended that the Ddepartment of Labor, the Equal Employment Opportunity Commission and other government agencies coordinate efforts to shape and adapt regulations to the changing realities of retirement in the US.
The Internal Revenue Service has recently proposed allowing certain phased retirement distributions, but they place signifiant administrative burdenrs and limited flexibility on employers, making it an unattractive option, according to Watson Wyatt.
The registration deadline for the Workplace Savings & Benefits Awards 2019 is today.
This week's top stories were the DWP giving the green light to CDC and TPR granting extensions for 11 master trust authorisation applications.
Susan Martin says building strong foundations for business are the only way forward as the pensions industry is radically shaken up
The Pensions Regulator (TPR) has granted Now Pensions a six-week extension for its master trust authorisation application after the 31 March deadline, PP can reveal.