Consumer Agenda for Retirement Security

Initiative #4: Improve traditional and hybrid pension plans

H. Link executive and rank-and-file employee retirement benefits. 

Corporations have increasingly been putting management employees on a separate and superior retirement track than rank-and-file workers by providing such employees with non-qualified deferred compensation plans, which can provide executives and other favored, highly paid employees with benefits without providing similar benefits (as a percentage of pay) or sometimes any benefits for other employees.  Employers should not be permitted to provide such Cadillac non-qualified benefits for a few employees without providing at least some Ford and Chevy benefits for all employees.   

Moreover, some businesses have terminated or frozen defined benefit plans for rank-and-file employees but continue to provide extraordinary benefits for their senior management.  Congress should enact legislation to address these issues, including (i) a provision that freezes executive deferred compensation when a business freezes its defined benefit plan; and (ii) a provision that does not allow a business to use one benefit formula for rank-and-file employees and another for management employees. 

Learn more about the other initiatives in the Consumer Agenda for Retirement Security.

Initiative 1: Promote a more adequate and secure private retirement income system.
Initiative 2: Empower workers to promote their own retirement security.
Initiative 3: Improve retirement savings plans.
Initiative 4: Improve traditional and hybrid pension plans.
Initiative 5: Make retirement plans fairer for workers and their spouses.

Print the Consumer Agenda for Retirement Security [PDF].