Identify two ways that the government supports private social benefits such as pensions and individual retirement accounts.

What will be an ideal response?

First, an employee can deduct most contributions to these programs from his or her taxable income. The contributions by the employer are not taxable until the employee begins to receive the pension. In addition, the federal government now supervises and guarantees pensions through the Pension Benefit Guaranty Corporation, much as it does bank deposits through the Federal Deposit Insurance Corporation. Pension schemes also are regulated through the Employee Retirement Income Security Act (ERISA). Given that most participants in private pension plans are members of the middle class, these supports amount to a major (disguised) social benefit for that segment of the population.