The Employee Retirement Income Security Act (ERISA, a 1974 law) was designed to create pension plan standards in the United States’ private sector. While ERISA does not require employers to pay their employees a given amount through the pension plan, it does establish the obligation for the employer to provide truthful, timely information to employees regarding information contained within their pension plans. This information may include statements regarding vesting, standards of participation, accountability of fiduciaries, and benefit accrual. The Employee Retirement Income Security Act also insures a definite minimum for pension plans in the event that they are terminated (typically by bankruptcy or change of ownership by the employer). However, the amount that ERISA reimburses the employee may not match the original pension plan established by the employer.
Both presently and continuing over the next decade, baby boomers will be reaching retirement age. Many have been working for years with the understanding that upon retirement they will be receiving a full pension. Due to the shifting age demographics in the workforce, the ratio of workers paying into pension plans and those drawing from them has shifted unfavorably, and will continue to slide further out of balance. This trend mirrors a shift in the ratio of workers who are contributing to Social Security. Though pension plans and Social Security benefits have long been a staple for elderly US citizens, there may be a sweeping redesign of their associated programs in the coming decades.
As one might imagine, Social Security reform and shifting pension plans make the American public nervous. Often, the elderly have no income other than what these two options provide, and in a sluggish economy tending toward part-time labor and early retirement, elderly retirees may not even receive a pension. Many companies are now offering early retirement packages with substantial severance pay, but participation is seldom entirely voluntary and may be coupled with a steep reduction in employees’ long-term pension plans.
These changes, along with ERISA and the Affordable Care Act, have changed healthcare delivery for the elderly primarily by necessitating widespread caution regarding the investment of retirement benefits. Secure full pensions are now at a premium, and many members of the American public have obtained legal consultation to ensure that they receive as much of the retirement packages as possible. This practice is especially common where Medicaid (a type of medical insurance available for low-income individuals) is involved, due to the complex nature of how Medicaid assesses eligibility. Each state in the US has its own Medicaid program which in turn has specific rules regarding how citizens must divide their assets to be eligible for care. With adequate planning and budgeting, however, citizens can establish a benefit plan to maximize their chances of a risk-free retirement.