Wednesday, July 2, 2008

Korea is "least ready" for retirement as its boomers age

Koreans are the least prepared financially for retirement among countries worldwide. It is time to take this seriously and prepare by investing in a variety of assets, instead of relying solely on property, said Fidelity International, a global asset manager. Announcing the retirement readiness index Tuesday, Fidelity Korea noted that the country's retirement income replacement ratio stands at 41 percent of the average income before retirement, far below that of Taiwan, Japan, Britain and the United States. The ratio is a measure of the actual income after retirement to the income just before retirement.   Assuming that the annual income of a Korean household is 10 million won, the actual expected income after retirement would be 4.1 million won. However, the desirable ratio for post-retirement life should be 62 percent, or 6.2 million won under the assumption, said Fidelity.  The asset management firm and Seoul National University's retirement planning support center calculated the ratio, utilizing data from the statistical office and Koreans' indirect investment patterns. The measure of the index includes assessing expected pension, severance payment and savings.

Korea Times,

July 2, 2008 in Retirement | Permalink | TrackBack (0)

Thursday, June 19, 2008

Free economic stimulus webinar--sign up now!

There is still time to help our seniors who can really use the money file for their Economic Stimulus Payment. Join us for a Webinar that will give you the latest information from the IRS, National Women’s’ Law Center, Center on Budget and Policy Priorities and AARP Tax-Aide. We will also guide you through filling out a 1040A form online, printing it out and sending it directly to the IRS for an
Economic Stimulus Payment.

Hurry, sign up now. Space is limited. Call, 1-800-350-5423 to register.

More detailed information to follow.

*Tina Purser-Langley | Tax-Aide Assistant Nat'l Dir*
601 E St NW, Washington, DC, 20049
Office: (202) 434-2043 1-800-424-2277|

June 19, 2008 in Retirement | Permalink | TrackBack (0)

Wednesday, June 11, 2008

Urban Institue to host webcast on the retirement

The Urban Institute, Civic Ventures, and Public Agenda will host
Wednesday, June 25, 2008
9:00-10:30 a.m. ET

To attend this event in Washington, D.C., RSVP at,
e-mail, or call (202) 261-5709.

To listen to the live audio webcast, register at

    * John Gomperts, president, Civic Ventures; CEO, Experience Corps
    * Eugene Steuerle, senior fellow, Urban Institute
    * Ruth Wooden, president, Public Agenda
    * Sheila Zedlewski, director, Income and Benefits Policy Center,  Urban Institute

At the Urban Institute, 2100 M Street N.W., 5th Floor, Washington, D.C.

June 11, 2008 in Retirement | Permalink | TrackBack (0)

Tuesday, June 10, 2008

GAO reports on incentives for small businesses to fund IRAs and related issues

Congress created individual retirement accounts (IRAs) with two goals: (1) to provide a retirement savings vehicle for workers without employer-sponsored retirement plans, and (2) to preserve individuals’ savings in employer-sponsored retirement plans. However, questions remain about IRAs’ effectiveness in facilitating new, or additional, retirement savings. GAO was asked to report on (1) how IRA assets compare to assets in other retirement plans, (2) what barriers may discourage small employers from offering IRAs to employees, and (3) the adequacy of the Internal Revenue Service’s (IRS) and the Department of Labor’s (Labor) oversight of and information on IRAs. GAO reviewed reports from government and financial industry sources and interviewed experts and federal agency officials.
What GAO Recommends.

GAO believes Congress should consider whether payroll-deduction IRAs should have some direct oversight in response to Labor’s comments that it does not have jurisdiction over these IRAs. GAO also recommends Labor examine ways to encourage employer sponsorship of IRAs, and evaluate ways to determine whether employers offering IRAs are in compliance with the law, and ways to collect additional information on IRAs. GAO recommends IRS routinely publish and give Labor data on IRAs. Neither IRS nor Labor agreed or disagreed with the recommendations.

To view the full product, including the scope
and methodology, visit
For more information, contact Barbara Bovbjerg at (202) 512-7215 or

June 10, 2008 in Retirement | Permalink | TrackBack (0)

Friday, April 11, 2008

Dateline show to expose annuity scams aimed at seniors

Here's the promo for the show, which airs Sunday evening Sunday, April 13 (7:00 PM/ET)

"With an estimated 15 trillion dollars under their control American seniors have become more of a sales target than ever for insurance agents seeking to sell them annuities. On Sunday, April 13 (7:00 PM/ET), "Dateline" goes undercover in "Tricks of the Trade" -- a hidden camera investigation revealing what some insurance agents say, and what they don't say, when they think they are alone with a senior. In his signature style, Chris Hansen then confronts agents about their questionable sales pitches.

NBC News footage shows the widespread practice of agents cloaking themselves in fancy titles and insurance agents attending a seminar to learn these sales tactics. Minnesota Attorney General Lori Swanson, who reviewed "Dateline's" footage, and who has filed several suits alleging fraud in the sale of annuities to seniors, tells Hansen: "...what is tragic about it is when those agents go into the seniors' homes, it is literally the wolf among the lambs."      

April 11, 2008 in Retirement | Permalink | TrackBack (0)

Thursday, April 10, 2008

New CRS reports on spouses' federal retirement benefits

Retirement and Survivor Annuities for Former Spouses of Federal Employees
April 03, 2008
Open CRS (User submitted)

A former spouse of a federal employee may be entitled to a share of the employee's retirement annuity under the Civil Service Retirement System (CSRS) or the Federal Employees' Retirement System (FERS) if this has been authorized by a state court decree of divorce, annulment, or legal separation. An employee also may voluntarily elect a survivor annuity for a former spouse. A state court can award a former spouse a share of the employee's retirement annuity, a survivor annuity, or both. A court also can award a former spouse of a federal employee a portion of the employee's Thrift Savings Plan (TSP) account balance as part of a divorce settlement. This report will be updated as legislative developments warrant.

April 10, 2008 in Retirement | Permalink | TrackBack (0)

Monday, April 7, 2008

Pension plan funding ratios decline precipitously

The funding ratio of a typical US pension scheme has fallen by nearly a quarter in the past nine months, suffering from a combination of volatile equity markets and declining interest rates.  Acording to the US Pension Fund Fitness Tracker from UBS Global Asset Management, in the first quarter of this year, the US pension funding ratio, or the estimated ratio of a typical scheme’s assets to its expected liabilities, declined by 11%.  UBS said in a statement that most of the drop occurred in January, whose 8% decline was the largest in a single month since 2002. It is the third consecutive quarter that the ratio has dropped. Since the middle of last year, it has gone from about 113% to 90%.  Furthermore, declining interest rates meant the present value of liabilities increased by nearly 8% in the quarter.

Source:  Financial News Online,

April 7, 2008 in Retirement | Permalink | TrackBack (0)

Urban Inst. report: the changing nature of work and retirement

Other Availability: PDF | Printer-Friendly Page
Posted to Web: March 28, 2008
Permanent Link:

The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.

The text below is an excerpt from the complete document. Read the  full paper in PDF format.


About 7 percent of American workers held highly physically demanding jobs in 2006, and 35 percent held highly cognitively demanding jobs. The share of the workforce in physically demanding jobs fell by about one-sixth between 1971 and 2006, while the share in cognitively demanding jobs increased by more than one-third. Stressful occupations also grew rapidly over the past 35 years. The decline in physically demanding occupations will likely improve employment prospects for older adults, but the growth in cognitive demands may limit options for some older people, especially those with limited education.

April 7, 2008 in Retirement | Permalink | TrackBack (0)

Belgium pushes for cross-border pensions

Creating a robust cross-border pension market is a priority for the Belgian government, the Belgian Pensions Regulator (BPR) has said.   Speaking at an event organised by Towers Perrin, Henk Becquaert of the BPR outlined the steps the Belgian government has taken to attract multi-national corporations to set up cross-border pension schemes.   Becquaert said cross-border schemes need flexible structures and low taxation to be attractive, which the Belgian government had implemented. Groupacier and Pfizer Pension Fund have set up cross-border pension schemes based in Belgium.   “The legal framework of pension funds in Belgium allows a sponsor to adapt the organisation and structure of a cross-border scheme to its own individual business situation,” he said.

Source:  Global Pensions,

April 7, 2008 in Retirement | Permalink | TrackBack (0)

Thursday, March 13, 2008

CRS report discusses Roth and traditional IRAs

Traditional and Roth Individual Retirement Accounts (IRAs): A Primer
March 03, 2003

In response to concerns over the adequacy of retirement savings, Congress has created incentives to encourage individuals to save more for retirement through a variety of retirement plans. Some retirement plans are employer-sponsored (such as 401(k) plans), and others are established by individual employees (such as Individual Retirement Accounts (IRAs)). This report describes the primary features of two common retirement savings accounts that are available to individuals. Both traditional and Roth IRAs offer tax incentives to encourage individuals to save for retirement. Although the accounts have many features in common, they differ in some very important aspects. This report explains the eligibility requirements, contribution limits, tax deductibility of contributions, and rules for withdrawing funds from the accounts. This report will be updated as legislative activity warrants.

Get it here.

March 13, 2008 in Retirement | Permalink | TrackBack (0)

Wednesday, February 20, 2008

PBGC to diversify in effort to cover liabilities

The Pension Benefit Guaranty Corporation, the US government-sponsored guarantor for pensions, plans to step up its investments in riskier assets such as equities as it seeks to plug a $14bn deficit.  The move, quietly announced on the President’s Day public holiday in the US on Monday, will mean the PBGC will double its allocation of equity investments to 45 per cent of its total assets.  The PBGC, which in effect acts as a pensions insurance fund, guarantees the benefits of 44m workers and is currently paying benefits to 700,000 retirees. It holds approximately $55bn (€37.4bn, £28bn) in assets to invest under its new policy.  It has, however, no access to credit from the government. It relies only on insurance premiums paid by the companies whose plans it insures and the investment returns those premiums can earn. If it became insolvent, it would either have to slash benefits paid to retirees or seek a taxpayer bailout.  The PBGC did not have the resources to meet all its future commitments, Charles Millard, director of the corporation, said yesterday.

Source/more:  Financial Times,

February 20, 2008 in Retirement | Permalink | TrackBack (0)

Thursday, February 14, 2008

New GAO report says VA needs to improve pension management

In 2006, most of the over 500,000 VA pensioners had nonpension incomes well
below the federal poverty level, were beyond retirement age, and had multiple
impairments, and the population has been decreasing in number. The average
annual reported income of these pensioners, excluding their VA pensions, was
less than $5,000. The average age of VA pensioners was 70. More than 80
percent had no spouse or dependent children. Three-fourths of veteran
pensioners had multiple impairments. After reaching a peak of almost 2
million in 1978, the overall size of the pensioner population has gradually
decreased, although the number of pensioners from more recent service
periods has been increasing.

VA policies and procedures are not sufficient to ensure sound decisions on
new pension claims. Unlike other federal agencies with similar income-based
programs, VA largely does not independently verify the accuracy of financial
information provided by claimants to support initial pension program
eligiblity. In addition, the guidance used by staff to make pension eligibility
decisions is not always current or clear. Further, VA’s quality assurance
review process for initial claims does not select a sufficient number of
pension cases to ensure the accuracy of pension claims decisions. Finally, VA
does not adequately evaluate training for pension staff.

VA procedures for assessing whether pensioners continue to receive the
proper benefits have significant limitations. Although the agency requires
pensioners to report changes that might affect their pensions, VA does not
require documentation such as bank or asset statements when pensioners
report financial changes. Also, a key data match operation with the Internal
Revenue Service is not conducted in a timely or efficient manner. Finally,
despite millions of dollars in improper pension payments made each year, VA
lacks a system to monitor and analyze their causes.

February 14, 2008 in Retirement | Permalink | TrackBack (0)

Sunday, February 10, 2008

WISER establishes new web-based National Education and Resource Center on Women and Retirement Planning

FROM the Women's  Institute for a Secure Retirement (via ELDERBAR list serv):

The Administration on Aging and the Women’s Institute for a Secure Retirement (WISER) have jointly established a web-based National Education and Resource Center on Women and Retirement Planning (Center).  The Center’s overriding goal is to assist the Aging Network in educating women of all ages about planning for their future financial, health and long-term care.

The Center focuses its activities on educational materials that meet the special needs of disadvantaged women and their families, including individuals with limited English proficiency. The Center improves women’s access to basic financial and retirement planning tools that promote financial literacy. Our materials include a full library of fact sheets on topics such as budgeting, saving and investing, understanding your pension plan, buying long-term care insurance, Social Security, retirement health and other important topics.

We are writing to invite you to review the products and materials available on the Center’s website and also WISER’s website, and distribute them through your agency. Our goal is to promote greater awareness and utilization of materials by average and vulnerable women. WISER’s website address is and the Center’s website can be reached from our home page. Most of the materials are downloadable and may be printed and distributed to your clients free of charge. Bulk orders are available for a nominal fee. We encourage you to make these materials available to clients in your community and to link to our website if possible.

We also encourage you to join WISER’s email list. You can use the link below to join. We send monthly updates regarding WISER’s activities, new publications and other useful tips. Your email address is kept completely private. 

WISER believes that lifetime financial planning is one key to reducing the unacceptably high rate of poverty among older women. Women with financial skills and resources live a more secure and healthy life. We hope that you will partner with us to create access to these tools and resources. If you have any suggestions for collaborations or dissemination of the materials, we would love to hear from you.

February 10, 2008 in Retirement | Permalink | TrackBack (0)

Sunday, February 3, 2008

Benefits issues in the campaign? Just the fact, ma'am

Get answers (not spin) to your burning questions on health care, social security, and private pension benefits issues from the Employee Benefits Research Institute.

February 3, 2008 in Health Care/Long Term Care, Retirement, Social Security, Statistics | Permalink | TrackBack (0)

Thursday, January 31, 2008

PA House votes to give slots money to seniors for tax relief

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/,

January 31, 2008 in Retirement | Permalink | TrackBack (0)

Thursday, January 24, 2008

Ohio pension fund sues Freddie Mac for fraud

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.

More at Reuters or HERE.

January 24, 2008 in Retirement | Permalink | TrackBack (0)

Tuesday, December 18, 2007

Retired 64-year-old rodeo queen hates the sedentery life

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,

December 18, 2007 in Retirement | Permalink | TrackBack (0)

Wednesday, December 12, 2007

New GAO report discusses issues with defined contribution plans and lower-income workers

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):

December 12, 2007 in Retirement | Permalink | TrackBack (0)

Thursday, December 6, 2007

New CRS Report discusses lump sum pension distributions

The Pension Protection Act of 2006 (PPA, P.L. 109-280) modified the provisions of federal law that prescribe how the minimum value of a lump-sum distribution from a defined benefit plan will be determined in 2008 and thereafter.  It also established conditions under which payment of lump sums from defined benefit plans will be restricted.  The attached report summarizes the provisions of the PPA that will affect lump sums paid from defined benefit pension plans.
The effect of the changes made by the PPA on lump sums paid in 2008 is likely to be relatively small.  An individual eligible for an immediate annuity at age 65 is likely to see his or her lump sum reduced by less than 1%, and those who will be eligible for an immediate annuity at age 60 or age 55 will see the lump-sum value of their benefits reduced by less than 2%.  When the PPA is fully in effect in 2012, the reduction in lump sums will be greater.  Individuals eligible for an immediate annuity at age 65 will see their lump sums reduced by about 9%, and those eligible for an immediate annuity at age 55 will see their lump sums reduced by about 12%.
The effect of the PPA on the lump-sum value of deferred annuities also is likely to be relatively small in 2008.  An individual eligible for a deferred annuity at age 65 who takes a lump sum at age 60 is likely to see his or her lump sum reduced by less than 1%, and those who take lump sums at age 55 or age 50 will see the lump-sum value of their benefits reduced by about 3%.  When the PPA is fully in effect in 2012, the reduction will be about 12% for lump sums taken at age 60, 21% for lump sums taken at age 55, and 25% for lump sums taken at age 50.

December 6, 2007 in Retirement | Permalink | TrackBack (0)

Tuesday, November 27, 2007

Supremes hear 401(k) case

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,,1,1269671.story?ctrack=2&cset=true

Read the briefs:

November 27, 2007 in Retirement | Permalink | TrackBack (0)