1. The first pillar: comprehensive coverage and basic guarantee.
Similarly, the American pension system has three pillars. The first pillar is OASDI (Old Age, Survivor and Disability Insurance Plan), which was a legally mandatory social security plan formulated by the social security law of 1935 during the Great Depression, covering about 96% of the working population in the United States. The source of funds for the insurance plan is the social security tax paid by employees and employers (usually 6.2% of employees' pre-tax wages, and employers pay the same amount), and then conservative investment is made through the social security trust fund; According to the law, the fund can only invest in unsold stocks and securities guaranteed by the federal government, so it is guaranteed to keep an eye on Hu Qiaoquan.
2. The second pillar: as a supplement to the first pillar, it has the characteristics of deferred tax payment.
The second pillar is the occupational annuity, the most widely known of which is the 40 1(k) plan, which was introduced by the tax law in 198 1 Although defined benefits still exist as an option, defined contributions are now dominant in the 40 1(k) plan. According to the DC plan, the employer sets up a separate account number 40 1(k) for each employee, and then the employer and the employee pay the corresponding amount. Generally speaking, you can't withdraw funds before retirement. Employers usually cooperate with some funds and provide a series of investment options for employees to choose according to their risk preferences; Employees bear investment risks. In the traditional 40 1(k) plan, employees enjoy phased tax exemption according to the accumulated payment, and the tax is deducted when withdrawing money. Such a deferred tax payment system makes the plan attractive.
3. The third pillar: as a supplement to the second pillar, it has greater flexibility.
The third pillar mainly includes individual retirement account (IRA) and individual savings and investment plan. 1974, the Employee Retirement Income Security Act (ERISA) established IRA system, and implemented corresponding access rules to protect American retirement assets. IRA is similar to the 40 1(k) plan to some extent, the main difference is that the traditional IRA account is opened by employees themselves, not employers. At the same time, the employer does not have to pay the matching amount.
Similar to the 40 1(k) plan, the contribution of traditional IRA is also pre-tax, and tax is levied when it is withdrawn. Compared with the restrictions on fund investment specified in 40 1(k), IRA plan has thousands of investment options. In the past decades, in addition to the traditional version, many changes have taken place in the 40 1(k) plan and IRA, such as Roth 40 1(k), Roth IRA, SEP IRA, SAR-SEP IRA, Simple IRA, etc. To meet the needs of employers and individual participants.