Defined Contribution

With just 24% of workers feeling confident that they'll be able to retire comfortably, a new report identifies key focus areas where employers can make a difference, such as employees with student loans and low-income workers.

Under the new proposal, which was expanded to include more borrowers, eligibility must meet certain criteria, such as those who have been in repayment for a long time or those whose loans exceed what they originally owed.

If employees do not save towards retirement, they might be stuck indoors at home because they cannot afford to go anywhere, which is why employers need to shine light into that dark corner of the calendar again.

The new legislation is the most extensive update in retirement law in the past 15 years, however, there are distinct areas that Congress should address for a more effective retirement income system, says the Brookings Institution.

The Employee Benefits Security Administration (EBSA) recently announced that about half of the $1.4 billion amount came from enforcement actions ($844.7 million) and 30% came from informal complaint resolutions ($444.1 million).

The legislation would require firms with 10+ employees to automatically enroll all full-time and long-term part-time employees in an automatic IRA or 401(k) plan, allowing workers to decline to participate at any time after enrollment.

The new rule aims to rein in any predatory practices around rollover recommendations from commission-based advisors, but employers can protect themselves by offering objective, retirement planning advice inexpensively.

In 2024, a provision in SECURE 2.0 takes effect that provides a new option tying student debt repayments to 401(k) plans but clearly communicating to employees why and how to opt into the new program is key to adoption.