More Shelter For Middle Managers?

For many workers planning for their golden years, employers' tax-deferred savings programs are about the only game left. But not everyone gets to play. The rules governing these company-sponsored 401(k) plans are so complicated that many employers, especially small businesses, are avoiding them. But now, relief is in sight. Support is growing in Congress to make iteasier for companies to offer 401(k)s and allow more middle managers to participate fully in the programs. Many companies have slashed their traditional pension plans. And Congress has sharply curbed the tax break for individual retirement accounts, or IRAs. But contributions to 401(k) plans now amount to some $25 billion a year--twice the money going into IRAs. And nearly half of workers using 401(k)s consider them their main source of retirement income. But companies interested in a 401(k) must run a gauntlet of restrictions. Those same rules tend to limit the amount that many higher-paid employees can save under the plans.

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