A Pension Plan For Small Fry
Only 24% of employees who work for small companies are eligible for pensions. But Labor Secretary Lynn Martin hopes her new proposal will encourage small business to expand coverage. On Apr. 30, Martin suggested that companies with 100 or fewer employees be relieved from following complex federal rules governing larger employers that offer pensions.
Such rules bar companies from setting up plans that favor higher-paid employees. Martin's proposal is likely to lend support to efforts in Congress by larger companies to relax "nondiscrimination testing" for all businesses. The plan would also make it harder for all employees to cash out their pensions when they leave jobs before retirement.