The Pension Act was implemented in 2006 under the authority of President Bush. The goal of this act is to ensure those that approach retirement age are going to have the funds they need to do so. Too many people have seen their nest eggs go down the drain due to faulty pension plans. As a result they are facing retirement with a very grime outlook of what they had planned for themselves.
This Pension Act makes sure that those that have a pension plan in place will actually be able to reap the benefits from it. There have been numerous accounts in the media where that didn’t happen. It really lead to the public becoming uneasy. To them, their pension plan was once a source of security. In light of what others had experienced though they felt it was nothing more than some numbers. They definitely didn’t feel like it was anything they would be able to rely on.
One of the main changes under the Pension Act is that any business offering such funds has to have them in place. The money has to be secured accounts for that purpose. The fact that many of these faulty pension plans had the numbers on the books but not in reality was a major concern. Under the new guidelines of the Pension Act this is no longer possible for companies to do. In all likelihood, they were using the pension funds for the business when they got into trouble. The problem though is that they couldn’t rebound from it and replace the funds as they had intended.
The new laws definitely help everyone in the workforce to feel more secure about their future. Those individuals that are new to the workforce will end up with the most benefits. Those that are close to retirement age can get some peace of mind though as they will know they are going to be able to access the funds they have accumulated in their accounts.
The government plans to closely monitor various types of pension funds as well. There are stiff penalties for not being in compliance. There has been some leeway though for companies to get the money they are to have into accounts in place. The government wants to make sure they do it but at the same time wants to make sure they don’t have to let people go or make other detrimental changes in order to do so.
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