|Written by Delphos|
|Friday, December 28, 2012 2:23 PM|
As the Baby Boom generation begins to retire, it is increasingly important to ensure the strength of the private retirement plan system. Millions of retired Americans rely on private pensions and employer-sponsored retirement savings as their most important source of income after Social Security. In an era where life expectancy has increased dramatically, it is more important than ever that policymakers foster the growth of employer-sponsored retirement plans.
There are two types of retirement plans sponsored by employers—qualified plans and nonqualified plans. Qualified plans are regulated by the Employee Retirement Income Security Act of 1974 (ERISA) and must meet certain requirements in order to obtain and maintain a tax-favored status. Nonqualified plans do not receive tax-favored treatment and are regulated by section 409A of the Internal Revenue Code.
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