The letter, however, makes no mention of the proposal that incumbent employees would be given the option to switch future pension accruals to the new lower tier. I have been told that such an option is likely to be offered. However, because of the relatively high employee contribution envisioned for the lower tier, there would be little benefit for incumbent employees in making a switch.
The Yudof letter also refers to ending the subsidy for survivors in the lower-tier plan. Current law requires defined-benefit pensions to offer a basic spousal survivor benefit and UC does. However, employers are not required to offer the basic benefit at no cost to the employee. UC does offer it at no cost. Other employers make an actuarial deduction in the monthly pension payment to cover the basic survivor benefit but UC does not. In the new lower tier, UC would make the deduction. (Under the current UC plan, an employee can opt for more than the basic spousal benefit but the incremental cost - above the basic benefit - is paid for via an actuarial deduction.)
There may be other questions, too:
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