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PBGC Completes Corrective Work on United Airlines; Agency Apologizes and Begins Back Payments
"The Pension Benefit Guaranty Corporation announced today that it had completed its review of United Airlines pension assets. The review found that, in 2008, PBGC had undervalued United's pension assets by about three-fourths of one percent. As a result, PBGC will increase slightly the benefits of some United retirees and will be making back payments with interest to those who have already been underpaid. The vast majority of United retirees were already slated to get their full pension amount and PBGC's corrective actions will not affect them."
(Pension Benefit Guaranty Corporation)
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Four Ways to Improve Your 401(k) Plan With New Fee Transparency Rules
"[I]f your plan is paying significant fees to an advisor but you receive little, if any, education on how to construct and maintain your portfolio, this makes it the worst of all possible worlds: high fees and poor service, resulting in low potential for good investment returns.... [D]on't hold your breath on the way to your mailbox at the end of [this month (August)], expecting the fee disclosures to be there. Many employers, especially small to midsize companies that don't have large HR staffs to handle such matters, unfortunately aren't aware of their responsibilities under the new regulations."
(ABCNews)
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What Are the Best Retirement Calculators?
"In [a] first post ... on the efficacy of online retirement calculators, [the author] showed how widely these tools can range in the savings they recommend—from 9 percent of a person's pay to almost 70 percent. This makes it hard for people to understand how much they need to save for retirement. In this post [the author digs] deeper into the calculators [published by] by AARP, CNNMoney, the Financial Industry Regulatory Authority (FINRA), MSNMoney, Schwab, SmartMoney and T. Rowe Price."
(CBS MoneyWatch)
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Railroad Worker Pleads Guilty in Pension Fraud Scheme
"A former worker for the Long Island Rail Road pleaded guilty on Tuesday to conspiracy and perjury charges, admitting that he had schemed to steal from a federal pension agency by pretending to be disabled and then lied to a grand jury.... About 20 defendants have been charged in a major fraud scheme that prosecutors said could have cost the Railroad Retirement Board more than $1 bil.lion if all the money had been fully disbursed."
(The New York Times; free registration required)
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Some Federal Pensions Pay Handsome Rewards
"Some 1.2% of federal retirees collect six-figure pensions. By comparison, 0.1% of military retirees collect as much. The New York State and Local Retirement System pays 0.2% of its retirees pensions of $100,000 or more. The New Jersey retirement system pays 0.4% of retirees that much. Comparable private figures aren't available."
(USA TODAY)
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Corporate DB Funding Falls in July
"The funded status of a typical corporate defined benefit plan decreased 2.5 percentage points in July to 74%, primarily because of lower Treasury rates, according to BlackRock (BLK)'s monthly pension funding update. Assets increased 2%, while liabilities increased 5.4%. Lower Treasury rates caused funding ratios to decrease by 3.4 percentage points, and lower credit spreads caused a 0.3 percentage drop[.]"
(Pensions & Investments)
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European Pension Funds Harness Wind Power to Drive Returns
"[European pension] funds hunting for higher returns are buying direct equity stakes in wind power projects that are being shunned as too risky by banks and other investors.... Wind power plants, particularly offshore farms, are expensive to build and maintain. Regulation is seen to be uncertain and the plants can face logistical and technological problems connecting to the wider grid. Forecasting reliable returns is difficult. Nonetheless, some pension funds are thinking longer-term, to steady cash flow over 20 to 30 years once projects are in place, and have decided to step in."
(The New York Times; free registration required)
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Retirement Becoming Impossible Dream For Those In 50s In Florida
"A recent survey of middle-aged Floridians found more and more of us don't hold out much hope for retiring as well off as our parents—or even at all.... AARP found 44 percent of older Floridians plan to delay retirement if the economy does not get better soon, and 28 percent expect to work until they die."
(The Huffington Post)
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What Am I Paying for My 401(k)?
"Instead of complying with the intent of the regulation, thousands of plan sponsors will simply approve the disclosures that service providers claim to be technically compliant. Technical compliance means that there is a way for a participant with enough time and sufficient interest to dig out an answer."
(Dalbar, Inc.)
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Don't Kill In-State Investment Plan, CalPERS Panel Urges
"CalPERS' investment committee urged staff not to move ahead with plans to end the pension fund's $1.035 bil.lion private equity program that targets California-based companies.... [E]ven though investment returns were below par for the private equity program, the program has benefits such as creating jobs and development in economically depressed areas of the state."
(Pensions & Investments)
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Not All Federal Employees Will Have the Option of Phased Retirement
"The Office of Personnel Management has released new information on implementing a phased retirement option for federal employees, noting among other details that participation is 'entirely voluntary' and not all workers are eligible.... [MAP-21] includes language that allows federal employees to ease into retirement by working part time and collecting a partial annuity."
(GovExec.com)
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OPM 'Fact Sheet' on Phased Retirement for Federal Employees (PDF)
"Phased Retirement will encourage the most experienced Federal employees to extend their contributions to the Nation, and will operate as a tool to ensure continuity of operations and to facilitate knowledge management. The main purpose of Phased Retirements is to enhance mentoring and training of the employees who will be filling the positions of more experienced employees who are preparing for full retirement. It is intended to encourage experienced employees to remain, in at least a part-time capacity, until less experienced employees are fully equipped to fulfill the same duties and responsibilities as those employees who wish to retire."
(Federal Office of Personnel Management)
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Social Security: Just the Facts
"You may have heard we can't afford Social Security. But the facts may surprise you.... [This video,] released in honor of the 77th Anniversary of the signing of the Social Security Act, explains the basics about Social Security, its purpose, who pays for it, who gets it, and what it means to seniors, working families, and children now and in the future."
(National Academy of Social Insur.ance)
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More Than Three-Quarters of Recent Annuity Buyers Were Satisfied with Their Annuities
"According to a new U.S. LIMRA study, 75 percent of variable annuity buyers, 83 percent of indexed annuity buyers and 86 percent of traditional fixed annuity buyers are satisfied with their deferred annuity purchase.... LIMRA's study finds that the top reason consumers gave for buying their annuity is to supplement their Social Security or pension income. The second most popular reason is to accumulate assets for retirement; this is especially true for individuals under age 60. Receiving guaran.teed lifetime income is also a concern, especially for buyers aged 60 and older."
(LIMRA)
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Investing for Retirement: The Moderating Effect of Fund Assortment Size
"[C]hoosing from larger mutual fund assortments in retirement plans (e.g., 401(k)s) taxes investors' cognitive resources, which leads to reliance on more simplified diversification strategies.... [I]ncreasing the number of mutual funds that investors can choose from decreases the tendency to invest in all available mutual funds ... but increases the tendency to spread the invested dollars evenly among the chosen alternatives ... provided that the number of funds chosen for investment allows for easy equal dollar allocations."
(Journal of Marketing Research)
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[Opinion]
House Ways and Means Committee Chair Requests All Records in Delphi Pension Decision
"Ways and Means Committee Chairman Dave Camp (R-MI) called on Obama Administration officials to detail its involvement in the termination of pensions for certain employees of the now-bankrupt Delphi. Recent news reports indicate that the Obama Administration played an active role in picking winners and losers among Delphi's retirees."
(U.S. House of Representatives, Committee on Ways and Means)
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[Opinion]
State-Sponsored Pension System Would Be California's Titanic
"Among the proposals frequently heard around Sacramento is the truly awful idea of launching a state-sponsored pension system for the more than six mil.lion private sector California workers. This idea is akin to providing the captain of the Titanic another boat to sink. A state-sponsored pension system would wipe out many small businesses that simply cannot afford to pay the employer's share of these pensions, especially when coupled with the increasingly heavy state, federal and health care taxes."
(Fox & Hounds)
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Benefits in General; Executive Compensation
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Did the Section 162(m) Cap on Deductibility Affect Executive Compensation Levels?
"[This study examines] the impact of a prior limitation on deductibility of compensation, [Code Section] 162(m). In contrast to much of the debate today on the need of the federal government to raise tax revenue, the primary goal of Section 162(m), which limited tax deductions for executive compensation, was not to raise revenue but to reduce excessive, non-performance-based compensation—in other words, to do something about excessive compensation[.]"
(Economic Policy Institute)
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Survey Reveals More Standard Pay Rate for Large U.S. Company Directors
"Director pay levels were relatively consistent among top U.S. companies in 2011, regardless of annual revenue, according to results from Hay Group's 2012 Director Compensation & Benefits Survey.... [A]mong top U.S. companies both large and small, median total direct compensation varied by only 21 percent in 2011, despite dramatic differences in companies' annual revenue. According to the survey, in companies with revenues of more than $40 bil.lion, median director pay was $252,500 in 2011, compared to $209,000 for directors of companies with revenues under $10 bil.lion."
(Hay Group)
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What If Baby Boomers Don't Live Forever?
"[B]eset by factors like elevated rates of obesity, cancer and suicide, could reverse or at least slow the increase in human life spans. A change in trend could have a bearing on everything from Social Security trust fund balances to the number of nursing homes and golf courses supported in the future."
(Reuters)
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Employee Job Satisfaction Linked to Benefits Education
"More than one-quarter of employed adults say that morale has declined in last year. And a majority of employees would bolt their current employer if offered comparable pay and benefits elsewhere, according to a new report."
(Treasury & Risk)
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What's the Benefit Status of 'Life Partnerships'?
"Life partnerships is the all-inclusive term chosen by Mercer LLC to cover [same-gender] marriage partners, couples in civil unions, opposite-[gender] unmarried couples cohabiting, and other domestic partnerships. Mercer recently published an extensive study of how employers cover—or don't cover—such relationships in their benefit programs."
(Business & Legal Reports, Inc.)
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Voices of 50+ Florida: Dreams and Challenges (PDF)
"Over 40% of adults 50+ say that health care issues are the top problem or challenge facing mid-life and older adults in their state ... Paying monthly medical expenses is extremely/very difficult for about one in three and somewhat difficult for another 22 percent."
(AARP)
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Facebook Stock Comp: A Status Update
"The surprising plunge in the [Facebook] stock price has created unexpected difficulties for the company's equity compensation.... While the expiration date of the lockup on most employee shares (almost 50% of total shares outstanding) is still fairly far off (Nov. 14),... some employees are already adjusting their expectations because of the poor post-IPO performance."
(myStockOptions.com)
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[Opinion]
Do the Rich Pay Their Fair Share in Taxes? Yes!
"According to the CBO, the top 1 percent of income earners paid 39 percent of federal individual income taxes in 2009, while earning 13 percent of the income.... [T]he bottom 60 percent of income earners, which includes the middle class, paid zero percent of total federal individual income taxes as a group. Instead, as a group, they received net cash payments from the IRS."
(National Center for Policy Analysis)
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Press Releases
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