Pension Reform

Pension Reform
Due to great recession of 2008, there has been an effort to reform pension funding to help ensure that employees will have enough to retire on. Different types of pension reform since 2008 are as follows:
 * New plans for new employees - this means moving towards the defined contribution plans where the employee must also invest in their retirements plans, not only the employer


 * Increase employee contributions - at the moment, many pension plans do not have a requirement for employees to invest part of their pay into the pension fund. With this reform, employees must contribute so the pension plan is fully funded.
 * Reduce or eliminate retiree cost of living adjustments
 * Extend retirement age - there has been a movement to raise the retirement age to at least 67 which would create a cost savings.
 * Increase employee vesting schedule - This refers to increasing the time that it takes for the employee to become vested in the pension fund. It would also alleviate "double-dipping" which means the employee cannot retire, collect a pension from the state, and then work at another job.
 * Greater smoothing of base-line retirement age determination (eliminate spiking or double pensions)

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