|
|
One of the most important aspects of the Pension Protection Act (PPA) is automatic enrollment of eligible employees in company 401(k) plans. The old-school thinking, that with enough education and awareness employees would make necessary contributions to available retirement plans, has proven to be faulty. (This is the same type of thinking that assumes health awareness will cause folks to wear helmets, stop smoking, and lay off super-sized portions at the local am/pm.)
Currently, only about 70% of eligible workers participate in their 401(k)s. With the new law, employees will be automatically enrolled in 401(k) programs as of December 2007. Individuals can opt out of contributing if they choose, but most folks tend to stick with retirement contributions.
The law requires the employee's initial contribution rate to be no less than 3% of pay and boost the amount by one percentage point a year until reaching at least 6%, but never more than 10%.
Now if you'll excuse us, we've got a craving for Jalapeno Corn Dogs - three for just $1.99 at the local am/pm.
To ask a question, request additional information,
or unsubscribe, simply reply to this message. And if you know of anyone who may be interested in "Taxing Details,"
don’t hesitate to pass it along.