We live in politically charged times. Congress seems unable to reach a consensus on anything, including where to have the annual congressional Christmas ball! Years of political crossfire over the Affordable Care Act have drawn renewed focus on employee benefits in general. If the current administration thought that the problem of the uninsured was a national crisis, then the subject of employee retirement plans has to be a problem of even greater magnitude. The topic of retirement benefits has only pinged on the media radar peripherally, as a result of large-scale municipal bankruptcies and the potential impact on retiree benefits and the esoteric topic of pension underfunding.

The reality is that most people do not have the financial resources to retire at the traditional retirement age of 65 and will continue working until their death. The problems are exacerbated by a combination of other factors—complex regulations under the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code—that require employers to satisfy a number of participation and contribution requirements; a weak economy; and higher marginal tax rates. It is ironic that the public sentiment about labor unions is generally negative, as the bygone days of heavy manufacturing and union organizing in the U.S. (say the 1950s-1970s), seem to be the last time that American workers had secure retirement benefits.

Originally published in Journal of Taxation Of Investments on June 11, 2014.