Hardly a week goes by without news of another defined benefit pension plan suffering troubles or going under entirely. The relatively generous plans employers once commonly offered might be much rarer today, but millions of retired Americans or those who are soon to be retired still depend on their viability. While the vast majority of private sector employers have long since switched to more flexible options like contribution matching for 401(k) accounts, some still offer traditional pension plans as well. For employers in Arizona and elsewhere, keeping up with this style of retirement benefit entails some real responsibilities.
Some of these are of plainly obvious kinds, as with always being sure to contribute enough money to keep any such system funded. On top of these basic requirements of remaining responsible and solvent, however, come others that have been established in an effort to keep plan managers honest. The Employee Retirement Income Security Act, or ERISA, for example, mandates employers who offer defined benefit plans post bonds that encourage their continuing compliance with all the associated requirements.
Employers in Arizona who wish to offer such an option to their workers need to see to this detail, among others. Contact Southwest Bond Services or another of the state’s bond-writing companies and it will become clear that obtaining and posting ERISA bonds in Arizona is less complex than it could initially seem. While some effort and financial commitment will inevitably be required, the process itself will, in the vast majority of cases, turn out to be fairly routine.
In exchange, employers can count on workers being more confident the retirement benefits they have been promised will be there when the moment arrives. The posting of ERISA Bonds in Arizona is not designed to fully fund any such defined benefit system, by any means, but only to make sure the plan managers keep up with their responsibilities along the way. While there will undoubtedly be more stories of defined benefit pension systems that have collapsed due to a lack of investment or insufficient returns, requirements like those laid down by ERISA help to keep this number down. In the final analysis, that benefits both workers and employers who wish to offer an especially appealing benefit as a way of attracting the most talented and dedicated employees.
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