US. The federal government should fix the pension coverage gap
The coverage gap is the most serious problem in the private sector retirement system.
At any moment in time, less than half of private sector workers are offered any type of retirement plan by their employer. Since people rarely save outside of organized savings mechanisms, those without coverage do not accumulate retirement assets.
Right now, I am worried about Massachusetts. Like the rest of the nation, about half of the state’s private sector workers have no plan. The state’s response to date has been to launch a multiple-employer 401(k) plan open to nonprofits with 20 employees or fewer. The idea is to relieve small employers of the administrative and fiduciary burden of offering their own plans, and, through economies of scale, reduce the fees and expenses generally associated with running a small 401(k). The problem is that Massachusetts’ approach is not only limited in terms of its target population, but also relies on each employer to make the decision of whether to participate.
Read More: Market Watch
