Essay Example on Multiemployer Pension Reform Act of 2014: Pension Reduction Benefits

Introduction

President Barack Obama signed the Multiemployer Pension Reform Act of 2014 to the law in December 2014 as a part of the reforms aimed at union pension plans facing long-term insolvency. The previous months had seen a deficit in the multiemployer insurance program. The deficit had increased as compared to the values recorded during the last years. For Pension reduction benefits to be achieved, trustees have to apply to the treasury department. The approval of the application will make the beneficiaries to enjoy the right of voting for the proposal of pension plans (Andonov et al., 2012). According to Kline-Miller, there might be a decline in the pension plan in about ten to fifteen years due to a shortage of finances by trustees of the multiemployer pension plan.

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Public pension

Public Pension in the United States is financed through taxes paid by employers and employees, accounting for the interest gained through trust fund reserves and the tax revenues paid by high-income earners. The employer and the employee pay the equal amount of the social security tax. If the total income of retirement exceeds a specified amount, they are taxed according to their benefits. Their retirement age lies between age 65 and 67. The pension operates on a pay-as-you-go basis, and it entails the OASDI meaning the Old age, Survivors, and Disability Insurance program. Coronavirus has made the .retirement crisis worse in America, and some new rules on retirements have been put across. Some pre-retirees and seniors have taken advantage of these lenient and flexible new rules to survive,

Occupational pension

About 60 percent of the workforce in private firms have access to retirement plans. The occupational pension plan follows specific schemes types, for instance, employer-sponsored retirement plans, which helps employees of both non-governmental organizations and public institutions to contribute from their incomes to the program; employees of the governments also contribute to the plan from their salaries. According to the report from S&P Global Ratings, the coronavirus pandemic has led to the rise of pension obligations and fiscal stress to the United States government.; Thrift Saving plans which entail employees of the Federal Government; Simplified Employee Pension plans which are meant for small businesses, banks, mutual funds, and other financial institutions such as insurance companies.

How the pension funds have been affected by the pandemic

Coronavirus has caused drastic effects on the American pension system. It has led to the collapse of pension funds. The pension savers find it hard to survive because trustees using emergency powers have trapped their money. Retirement planning for many people has been changed; for instance, people have started learning how to save for their retirement. It has also caused a lot of stress due to pandemic loss and rising obligations of the US government. According to the Banking giant J.P.Morgan, COVID 19 has caused economic downtown on retiree healthcare liabilities and unfunded pensions by the government. The stock market has been drastically affected, causing a lot of retirement funds to be lost. A lot of cities in the United States have felt the pressure of pension debt.

Conclusion

In conclusion, the American Pension system is one of the best methods of the globe. Most nations of the world should try to emulate them. It is quite evident that coronavirus pandemic is g great threat to the retirement benefits of not only the United States but also the entire globe. The US government should try as much as possible to curb the pandemic by coming up with appropriate measures against it.

References

Andonov, A., Bauer, R., & Cremers, M. (2012). Pension fund asset allocation and liability discount rates: Camouflage and reckless risk-taking by US public plans?