Archive for June, 2011
GAO’s Private Pension Study
Earlier this year, the U.S. Government Accountability Office (GAO) published a study on private pensions. The study examined the characteristics of defined contribution plan participants contributing at or above statutory limits and the long-term effects of the recent financial crisis on retirement savings. The study found that almost 75% of individuals who contributed at or above statutory limits had a salary of at least $126,000 while less than 1% of individuals who contributed at or above statutory limits had a salary no greater than $52,000. The study was unable to determine the effects of the financial crisis on defined-contribution and defined-benefit plans due to limited data. Not surprisingly, the study pointed out that “the unemployed, especially the long-term unemployed, may be at risk of experiencing significant declines in retirement income as contributions cease and the probability of drawing down retirement accounts for other needs likely increases.”
