Sunday, February 3, 2008
Thursday, January 31, 2008
The PA state House of Representatives voted overwhelmingly Tuesday to relieve lower income seniors of their school property tax burden, undercutting a proposal that would have slashed property taxes for all homeowners but raised sales and income taxes. The property tax debate was expected to continue Wednesday amid uncertainty about what if anything will finally emerge from the chamber.
The plan that was approved Tuesday, sponsored
by veteran Republican floor strategist Rep. John M. Perzel of
Philadelphia, would dedicate the billion dollars or more a year that
the slots gambling industry is projected to generate to pay the taxes
of older Pennsylvanians on 600,000 homes and other properties.
It passed 159-36 but requires another favorable vote to be sent to the Senate.
Majority Leader Bill DeWeese, D-Greene, said the House would next take up a proposal to amend the constitution by ending school districts' authority to levy real estate property taxes in 2010. If passed, it could in turn affect or cancel out Perzel's legislation. Perzel's amendment includes an age limit of 65 and an income limit for a full tax cut of $40,000. It would not increase any other taxes, unlike the Democratic plan, but it would leave empty-handed about 2.7 million families who would otherwise be on track to get tax relief next year. Perzel disputed predictions his legislation would be vetoed.
Source: AP/PhillyBurbs.com, http://www.phillyburbs.com/pb-dyn/news/246-01302008-1479368.html
Thursday, January 24, 2008
An Ohio pension fund filed an investor class action lawsuit against Freddie Mac, accusing the mortgage finance giant of securities fraud for failing to disclose risks from its investments in the subprime mortgage market. Ohio Attorney General Marc Dan, who filed the suit in U.S. District Court, the Northern District of Ohio, on Tuesday said Freddie Mac had "secretly and intentionally participated in one of the largest housing investment deceptions in modern U.S. economic times." According to Dann, the Ohio Public Employees Retirement System suffered losses of up to $27.2 million as a result of the fraud. Attorney General Marc Dann said in a statement the company improperly bought risky home loans that fell sharply in value and led to huge losses for Freddie Mac. Dann said Freddie Mac, a private company that holds a federal charter, was "deeply invested in the subprime mortgage industry and failed to disclose that it was not protecting itself from the billion-dollar risks it incurred." A spokesman for Freddie Mac declined to comment. The suit was filed on behalf of the Ohio Public Employees Retirement System and all other purchasers of Freddie Mac stock between Aug. 1, 2006, and Nov. 23, 2007. The pension fund is seeking to be the lead plaintiff in the class action suit.
Tuesday, December 18, 2007
If her battered joints are stiffening with the approach of winter, Jan Youren isn't complaining. It's a deeper ache that pains her. "I am not a person who sits around twiddling my thumbs," she says. "I'm not good at that." But like it or not, Youren is getting older -- her 64th birthday has
come and gone. She's like legions of others having trouble adjusting to
retirement's slower pace. And yet, because of what she's retiring from,
the challenge is uniquely her own. "You know, when I quit rodeoing it's a big hole. This year it's
harder...," says the five-time world champion bareback bronc rider, who
only climbed out of the competitive saddle two years ago -- and would
go back in a minute, if not for her kids, and grandkids. "I never thought I'd stay doing it as long as I did. It's just hard to stop because it's very addictive once you start." A lifetime of roughstock riding has left her with shattered bones,
several fused vertebrae, plenty of scar tissue and shoulders that
dislocate whenever she raises her arms above her head. The dislocating
shoulders mean that at the end of a bronc ride -- when most riders
would grab on to a pickup man, riding close by to whisk them to safety
-- Youren must hang on until the bronc bucks her off. A hard landing on
the arena's well-churned dirt floor has sometimes left her unconscious
for a minute or two. Five decades of watching this physical torture is enough, her family has decided.
But Youren fears that once she really stops, the years of prophecies from orthopedic surgeons and emergency room doctors will come true.
Source/more: Utah Daily Herald/AP, http://www.heraldextra.com/content/view/248311/
Wednesday, December 12, 2007
PRIVATE PENSIONS: Low Defined Contribution Plan Savings May Pose Challenges to Retirement Security, Especially for Many Low-Income Workers
Over the last 25 years, pension coverage has shifted primarily from “traditional” defined benefit (DB) plans, in which workers accrue benefits based on years of service and earnings, toward defined contribution (DC) plans, in which participants accumulate retirement balances in individual accounts. DC plans provide greater portability of benefits, but shift the responsibility of saving for retirement from employers to employees. This report addresses the following issues: (1) What percentage of workers participate in DC plans, and how much have they saved in them? (2) How much are workers likely to have saved in DC plans over their careers and to what degree do key individual decisions and plan features affect plan saving? (3) What options have been recently proposed to increase DC plan coverage, participation, and savings? GAO analyzed data from the Federal Reserve Board’s 2004 Survey of Consumer Finances (SCF), the latest available, utilized a computer simulation model to project DC plan balances at retirement, reviewed academic studies, and interviewed experts.
What the GAO found:
GAO’s analysis of 2004 SCF data found that only 36 percent of workers participated in a current DC plan. For all workers with a current or former DC plan, including rolled-over retirement funds, the total median account balance was $22,800. Among workers aged 55 to 64, the median account balance were $50,000, and those aged 60 to 64 had $60,600 (see figure below). Low-income workers had less opportunity to participate in DC plans than the average worker, and when offered an opportunity to participate in a plan, they were less likely to do so. Modest balances might be expected, given the relatively recent prominence of 401(k) plans.
Projections of DC plan savings over a career for workers born in 1990 indicate that DC plans could on average replace about 22 percent of annualized career earnings at retirement for all workers, but projected “replacement rates” vary widely across income groups and with changes in assumptions. Projections show almost 37 percent of workers reaching retirement with zero plan savings. Projections also show that workers in the lowest income quartile have projected replacement rates of 10.3 percent on average, with 63 percent of these workers having no plan savings at retirement, while highest-income workers have average replacement rates of 34 percent. Assuming that workers offered a plan always participate raises projected overall savings and reduces the number of workers with zero savings substantially, particularly among lower-income workers.
Recent regulatory and legislative changes and proposals could have positive effects on DC plan coverage, participation, and savings, some by facilitating the adoption of automatic enrollment and escalation features. Some options focus on encouraging plan sponsorship, while others would create accounts for people not covered by an employer plan. Our findings indicate that DC plans can provide a meaningful contribution to retirement security for some workers but may not ensure the retirement security of lower-income workers.
Get the full report (temporary address): http://www.gao.gov/new.items/d088.pdf?source=ra
Thursday, December 6, 2007
Tuesday, November 27, 2007
Although U.S. workers can invest money in a retirement fund sponsored by their employer, it is not clear whether they can sue to recover money lost because of mistakes by the fund's administrator. That issue came before the Supreme Court on Monday in a case that could shape the pension rights of 70 million employees. The case began when James LaRue, a management consultant from Texas, said he lost $150,000 from his 401(k) retirement account when the plan's administrators ignored his instructions to move his money from a high-risk stock fund into government bonds in 2001. LaRue sued his employer, DeWolff, Boberg & Associates, but his claim was thrown out before a trial because, according to the lower courts, the federal law governing pensions and benefits does not allow individuals to sue over losses in their retirement accounts. His case prompted the high court to reexamine the federal pension law in an era when employees -- not their employers -- are responsible for deciding where their retirement funds will be invested. In 1974, Congress adopted federal rules for employer-sponsored pension funds and health benefits in the Employee Retirement Income Security Act. In the decades since, the high court has interpreted this worker-protection law to bar employees from suing their employers over benefit claims. For example, the court said employees and their families could not sue for damages if their healthcare plan refused to pay for a needed medical treatment.
Source/more: LA Times, http://www.latimes.com/news/nationworld/nation/la-na-scotus27nov27,1,1269671.story?ctrack=2&cset=true
Read the briefs: http://www.abanet.org/publiced/preview/briefs/dec07.shtml#larue
Friday, November 16, 2007
The Center for Retirement Research at Boston College announces the
2008 Steven H. Sandell Grant Program "Call for Proposals." This annual
program is funded by the U.S. Social Security Administration. The Sandell
Program provides the opportunity for junior scholars from a wide variety
of academic disciplines and senior scholars working in a new area to
pursue projects on retirement income issues. Up to eight grants of 45,000
dollars will be awarded for one-year projects. The submission deadline for
grant proposals is January 31, 2008. Grant award recipients will be
announced in March 2008. For more information see:
Wednesday, November 14, 2007
The Bank of Montreal has just released one that shows 34% of Canadians aged 45 to 60 volunteer and a further 38% of boomers who do not yet volunteer say they plan to when they retire. BMO says it started looking into what boomers were planning to do in retirement in October 2005, and found 16% expected to spend “a great deal of time” in retirement doing non-profit and charitable work while 72% said they expected to spend “some time” doing it. The likelihood of spending “a great deal of time” doing charitable work increased with age.Tomorrow, November 15th, has been designated National Philanthropy Day – right smack in the middle of National Retirement Planning Week. The way BMO explains it, while the boomers have been until recently focused on working and raising their families, Canadian boomers are now setting their sights to helping others. Perhaps the good example of Bill Gates is starting to rub off.
Source: National Post, http://communities.canada.com/financialpost/blogs/wealthyboomer/archive/
And did you know this is National Retirement Planning Week? I didn't...until five minutes ago!
Who makes up the National Retirement Planning Coalition and why aren't they doing a better job of promoting this even?
Friday, October 26, 2007
Jerry Alonzy figured he'd be working into his 70s at least. As an independent handyman at the mercy of weather patterns near Hartford, Conn., he'd always made a decent income that rarely grew. Then he found Google, and his life changed. Alonzy, 57, now makes $120,000 a year from the ads Google places on his Natural Handyman website, and he couldn't be more thrilled. I put in two, maybe three hours a day on the site, and the checks pour in," he says. "What's not to like?" In return for placing its ads on websites and blogs, Google pays Web publishers every time one of its ads are clicked. Those clicks help keep Alonzy and his wife living comfortably and talking about moving to Hawaii. "All I need is a laptop and a high-speed Internet connection, and I can live anywhere." The Internet may be a young person's medium, but the retired and those nearing retirement such as Alonzy have found that they can work the Web just as well. Sometimes, such "Gray Googlers" can live a richer, more financially rewarding life than when they were supposedly working. "Google isn't just for kids anymore," says Google executive Kim Scott, who runs the company's AdSense program, the ad platform that provides the income for Web publishers such as Alonzy and others.
Source/more: USA Today, http://www.usatoday.com/printedition/money/20071026/greygoogle.art.htm
Wednesday, October 24, 2007
After 1After four years of helping people track down "lost" pensions, the Midwest Pension Rights Project is in danger of shutting down. The project, housed in the Women's Support and Community Services building on Hampton Avenue in St. Louis, serves people in five states, including Missouri and Illinois. Since October 1993, it has helped find pensions worth $12.5 million for more than 2,600 people, recovering $11.94 for every $1 in federal money it has received since October 1993. But late last month, the project received word that its federal grant wasn't being renewed. The grant provided three-fourths of the budget for offices here and in Chicago, said Suzanne Lagomarcino, the project's manager and executive director of OWL, the Voice of Midlife and Older Women. Lagomarcino said the project hasn't received a good explanation of why the $157,000 grant request was turned down, although she had been told in August that the U.S. Administration on Aging would approve just five of six projects that had applied for funds. The pension project also receives small grants from private foundations, and its office is provided by Women's Support. Lagomarcino is looking for alternate funding sources that can keep the project going through early next year.
Source/more: St Louis Post-Dispatch, http://www.stltoday.com/stltoday/business/stories.nsf/0/7A878521571D5CAC8625737E004E665E?OpenDocument
Wednesday, October 17, 2007
Despite potential tax and investment problems, more investors have been borrowing from their 401(k) plans or taking hardship withdrawals in recent months, some retirement plan providers say. Many in the field expect more borrowing in 2008, as consumers struggle with tighter credit and potentially higher mortgage payments. "I don't think it's a groundswell but it's enough to be noticed," said Rick Meigs, president of 401khelpcenter.com, which provides information on 401(k) plans. Increased borrowing on 401(k)s could be because of the credit crunch and slumping housing prices. To be sure, the indications are preliminary; it's too early to say why it's happening, according to the Hartford Financial Services Group. Borrowing against your retirement nest egg may seem tempting but it presents a host of problems. It could significantly reduce your savings at retirement and create an expensive tax bill if you can't repay the loan when it's due.
Source and more: Chicago Tribune, http://www.chicagotribune.com/business/yourmoney/chi-ym-borrowing-1014oct14,0,5181066.story
Wednesday, October 3, 2007
Delegates to the Kansas Silver Haired Legislature spoke out in force during a debate Tuesday over whether to support a resolution in favor of a cost-of-living increase in state employees' retirement benefits. As one former Boeing employee stood in opposition, saying he didn't think the state employees benefits were the province of the Silver Haired Legislature, there was an immediate resistance. Members of the Silver Haired Legislature will convene again at 8 a.m. today when they will take final action on the items discussed Tuesday. Jim Miller, of Topeka, responded that seniors had to stand as a group in support of better retirement benefits in the face of current workers who might "resent" having to pay taxes for older Kansans. "We're going to be facing an intergenerational warfare," he said. Bette Ford, of Valley Falls, stood to tell the delegates that she had been a state employee, and in the 20 years since retiring she has had one incremental increase. Throughout the process, delegates clapped as speakers made points they liked. The proposal to support the retirement increase eventually was passed.
Source/more: Topeka Capital Journal, http://cjonline.com/stories/100307/sta_204848259.shtml
Warfare? Come now! That's inflammatory!!
Saturday, September 29, 2007
Many older couples are approaching retirement with very different ideas about what those golden years will be like, even about whether they want to retire and how much time they want to spend together once they do, says a bank report, titled We Need to Talk. A lot of couples age 50 and above simply don't agree with each other on important aspects of retirement because they don't discuss the issue enough, according to the Scotiabank study, based on results of a survey by pollster TNS Facts. "We have seen many retirement plans hit a road bump almost immediately out of the gate because the shared vision that the couples thought they had wasn't as shared as it could be," said Barry LaValley, a retirement planning expert, working with ScotiaMcLeod. "Part of the problem is that couples don't often talk about the change in the relationship dynamic and how their day-to-day life will change in retirement."
Source and more: Montreal Gazette, http://www.canada.com/montrealgazette/news/business/story.html?id=2cc6db52-d8a1-4d29-9510-0e0e5fc3063d
Monday, July 23, 2007
In what is being termed as
an "historic moment" by industry and business leaders, Shraga Brosh,
president of the Manufacturers Association of Israel, and Ofer Eini,
chairman of the Histadrut Labor Federation, signed an agreement on
Thursday guaranteeing that beginning next year all of the country's
workers will have pension plans. "An agreement like this has never before been signed in the
history of the country," said Brosh. "At the end of the day, employers
will have to pay more to the employees, but they will do so trusting
that this is the best way to support all of the country's workers and
to allow them to live properly even after retiring." According to the agreement, beginning in January 2008 employees
who have been working at the same company for at least nine months will
be immediately eligible to start receiving payments into their pension
plans, beginning with allocations of 2.5 percent of their monthly
salary, with this number increasing to 5% in 2009, 7.5% in 2010, 10% in
2011, 12.5% in 2012 and 15% in 2013. The agreement additionally stipulated that workers will be able
to place the money either into a straight pension fund, a trust fund or
a patient fund.
In what is being termed as an "historic moment" by industry and business leaders, Shraga Brosh, president of the Manufacturers Association of Israel, and Ofer Eini, chairman of the Histadrut Labor Federation, signed an agreement on Thursday guaranteeing that beginning next year all of the country's workers will have pension plans. "An agreement like this has never before been signed in the history of the country," said Brosh. "At the end of the day, employers will have to pay more to the employees, but they will do so trusting that this is the best way to support all of the country's workers and to allow them to live properly even after retiring." According to the agreement, beginning in January 2008 employees who have been working at the same company for at least nine months will be immediately eligible to start receiving payments into their pension plans, beginning with allocations of 2.5 percent of their monthly salary, with this number increasing to 5% in 2009, 7.5% in 2010, 10% in 2011, 12.5% in 2012 and 15% in 2013. The agreement additionally stipulated that workers will be able to place the money either into a straight pension fund, a trust fund or a patient fund.Full story: Jerusalem Post, http://www.jpost.com/servlet/Satellite?cid=1184766016845&pagename=JPost%2FJPArticle%2FShowFull
Thursday, July 19, 2007
A lawsuit filed last week in federal court in Washington State contends that the National Education Association breached its duty to members by accepting millions of dollars in payments from two financial firms whose high-cost investments it recommended to members in an association-sponsored retirement plan. The case was filed on behalf of two N.E.A. members who had invested in annuities sold by Nationwide Life Insurance Company and the Security Benefit Group. It contends that by actively endorsing these products, which carry high fees, the N.E.A., through its N.E.A. Member Benefits subsidiary, took on the role of a retirement plan sponsor, which must put its members’ interests ahead of its own. By taking fees from the two companies whose annuities N.E.A. Member Benefits recommended to its members, the N.E.A. breached its duty to them, the suit contends. The N.E.A. is the nation’s largest professional organization; its Web site says it serves 3.2 million workers in education, from preschool to university graduate programs. The suit reflects heightened concern among retirement plan participants that excessive fees are diminishing their savings and enriching financial services firms. Last November, the General Accountability Office published a study concluding that retirement plan participants, as well as the Labor Department, needed clearer information on fees in these investment vehicles.
Source: New York Times, http://www.nytimes.com/2007/07/17/business/17suit.html
Monday, July 9, 2007
The NEW YORK TIMES ran an expose on so-called certified senior financial advisors who hold themselves out as experts on senior investing, and often sell products that aren't suited to older clients. To wit:
Many graduates of these short programs say they only want to help older Americans. But they are frequently dispensing financial counsel they are unqualified to offer, advocates for the elderly say. And thousands of them are paid by some of the country’s largest insurance companies — including Allianz Life, Old Mutual Financial Network and American Equity Investment Life Insurance — to sell elderly clients complicated investments that economists say most retirees should never own. The prize for these insurers and sales agents is a piece of the $15 trillion held by Americans 65 and older, the largest pool of assets ever amassed by an aging population, according to the Government Accountability Office. As older Americans’ wealth has grown, so too have programs that offer quickly earned credentials or that teach agents how to sell to the elderly. The number of certified senior advisers has increased by 78 percent in the last five years. More than two dozen such programs now exist, and have enrolled more than 39,000 people over the last decade. As more baby boomers retire, the number of programs and enrollees is likely to grow significantly, analysts say.
Tuesday, June 19, 2007
The Supreme Court refused to review a case today that undercuts Michigan’s use of inmates’ pensions to pay the costs of imprisonment. A federal appeals court ruled that pension managers can disregard directives from Michigan wardens to deposit inmates’ pension money in their prison accounts. The DaimlerChrysler-UAW pension plan argued successfully that the state ran afoul of federal pension law, which prohibits transfers of benefits without the pensioner's permission. The state says the appeals court voided Michigan’s powers restricting an inmate’s access to funds. The Michigan State Correctional Facility Reimbursement Act requires prisoners to reimburse the state for their confinement costs from their own assets, including pensions. In addition, state corrections officials require inmates to receive all money through their prison account, to limit any potentially illegal or fraudulent activities outside prison. See http://www.supremecourtus.gov/orders/courtorders/061807pzor.pdf
The Sixth Circuit decision is available at
Thursday, June 7, 2007
Working longer is one way to improve the retirement security of today’s older workers. It increases retirement resources while shrinking the period over which these resources will be needed. Working longer would also contribute to economic growth, allowing the nation to benefit from the knowledge and skills of older Americans. And it could potentially reduce spending on federal programs such as Medicare and Medicaid.
As U.S. policymakers consider ways to encourage people to extend their worklives, one place to look is Japan, the only major industrial nation with higher labor force participation rates among older workers than the United States. This brief presents five reasons why the Japanese work so long.
Tuesday, May 15, 2007
In the next few months,
a handful of past acts of legend, minus some hair and appetite for late
nights, will take to the stage for a globe-trotting, nostalgia-tinged
encore following a slew of band reunions. Go here for more--including a really scary picture of Iggy Pop.... http://news.sawf.org/Lifestyle/37106.aspx
The Police, The Who, Sly and the Family Stone, Iggy Pop and The Stooges and what remains of The Doors are all heading once more for the road. "The desire to play never goes away and neither does the desire of fans to see them perform," says Giles Green, senior vice president of Sanctuary Records, an independent record label specialised in "heritage" music acts. "Every heritage act can return, perform, and find a section of the market that is interested, wants to revisit their youth, and re-live a time gone by."
In the next few months,
a handful of past acts of legend, minus some hair and appetite for late
nights, will take to the stage for a globe-trotting, nostalgia-tinged
encore following a slew of band reunions.
Go here for more--including a really scary picture of Iggy Pop.... http://news.sawf.org/Lifestyle/37106.aspx