Are Pension Funds Safe? Discuss the new regulatory laws that have been put in place and who are the participants in the financial market

Pension funds with attached DB benefits are considered safest pension plans where the promised benefits are backed by secure fundigns such as US treasury and debt instruments along with the taxing power of United States govt.

It is regulated by ERISA (Employee retirement income security Act )

Prime responsibility is to provide consumer information, and assistance in pension compliance.

It required that the funds or assets need to be held in trust for the exclusive benefit of the employee and the after death beneficiaries.

Thee are favourable tax treatment for qualified plans which falls under the regulations of ERISA

Contributions to a qualified plan helps in saving tax for the employee becasue it may be taxed as regular income instead of taxing on the capital gains too.

The systems provides careful and ladded information and violation of which would not entitle for tax exemption and other benefits provided if defined benefit plan were chosen.

The system is designed to encourage employers to adapt compliance procedures and practices when on comolying is subject to reduction in certainty of potential liability and taxation.

Another system provided is IRA (individual retirement agreement ) which plays a leading role in facilitating the movement between portability system of US retirement plans.

The participants in the financial markets are :-

Fed , IRAs, ERISA, pension fund systems, and participating individuals.