Wake Up and See the Light, Congress! Congress has a once-in-a-generation opportunity. Since its first major overhaul in 1922, Congress has seen fit to make earth-shaking changes to the inner Revenue Code (Code) once every 32 years. Isn’t this enough time? Surely, it could be finished with little, if any, effective income effects.
Since ERISA, there were really significant changes in defined advantage (DB) plan design including the now popular traditional cash balance plan, the even better market comes back cash-balance plan, pension equity plan, and less used other cross programs. And, DB plans have a lot of features that should make them popular than DC plans, especially 401(k) programs. Individuals can get annuity payouts from the plan directly, thereby paying wholesale as opposed to the retail prices they might pay from insurers for a DC balance. Participants who prefer a lump sum can take one and if they choose, move that amount over to an IRA.
Assets are professionally invested and since employers have more leverage than do individuals, the invested management fees are better negotiated. In the event of corporate insolvency, the benefits are secure up to limits. Plan assets are spent by the program sponsor, so that participants don’t have to concentrate on investment decisions for which they may be woefully under-prepared.
Participants don’t have to contribute to be able to benefit. But, they could better be. Isn’t it time that people allowed advantages to be studied in a mixed format, e.g., 50% lump amounts, 25% immediate annuities, 25% annuities deferred to age 85? Isn’t it time that these benefits should be as portable as individuals might like? Far Thus, however, Congress appears to be missing this fantastic opportunity. Sadly, Congress prefers to keep its collective blinders on rather than waking up and viewing the light.
- Include funding for development like the EU does
- ► May (2) Is There a Debt/GDP Threshold at 90 Percent? (Part
- Do nothing at all about it
- 1989 Specifying Specific Deterrence: The Influence of Arrest on Future Criminal Activity
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This time, the Federal Reserve is confronting a ‘far more dangerous’ backdrop in the relationship market as it gears up to further raise interest rates. The prevailing dynamics in the Treasury market — an ever-narrowing gap between longer-term and brief U.S. Treasury yields, and record lows in forwards rates because of this point in the monetary routine — could derail the Fed’s tensing path, according to Bank or investment company of America Merrill Lynch.
Though a flattening produce curve is apparently a replay of previous rate-hike regimes — including the one overseen by Greenspan and Ben Bernanke, which culminated in the financial crisis — Bank or investment company of America sees extra cause for concern. November 13 – Wall Street Journal (Steven Russolillo and Corrie Driebusch): “A flood of Chinese companies is traveling the largest world-wide surge of preliminary open public offerings in ten years. 1 billion or even more, regarding Dow Jones VentureSource.
November 13 – Financial Times (Thomas Hale and Robert Smith): “Sales of commercial bonds is on course for a record year, as the stimulus from the European Central Bank or investment company and intensely cheap borrowing costs propel companies into the capital markets. There have been €339bn of non-financial corporate bonds sold in euros up to now in 2017, according to Dealogic…, putting issuance on course to surpass last year’s record of €345bn.