December 2018

12Dec

US. No, Retirement Plan Participation Isn’t Plummeting

This week the Schwartz Center for Economic Policy Analysis (SCEPA) published a short article claiming that “New Data Shows Drop in Retirement Coverage for All Income Levels,” contributing to the narrative that Americans face a “retirement crisis” that government must step in to address. In reality, the article should have been titled “Bad Data Show Drop in Retirement Coverage for All Income Levels,” because the decline in retirement plan coverage reported by SCEPA is almost surely a problem with...

December 12, 2018
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11Dec

US. Saving Infrastructure and Pensions at Once? That’s Ambitious

A plan to sell $300 billion of 40-year bonds only to pension funds cuts out too many investors. Every politician in Washington loves infrastructure, in theory. Nancy Pelosi said in October that one of her goals was to “build the infrastructure of America from sea to shining sea.” President Donald Trump has promised to “build gleaming new roads, bridges, highways, railways and waterways all across our land.” Yet time and again, details end up derailing any efforts to fix what’s...

December 11, 2018
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10Dec

US. 401(k) plans are 40 years old. To celebrate, here’s a look at how they could be better

It's clear that 401(k) plans have been huge successes in the 40 years since they were authorized, amassing more than $5 trillion in assets and becoming investment mainstays for millions of Americans through workplace-benefit programs. But 401(k) plans and similar defined-contribution programs haven't worked out well for everyone, and criticisms linger. As the 401(k) concept marks the 40th birthday from its creation in the Revenue Act of 1978, here's a look at some of the shortcomings: These programs aren't pensions Perhaps the...

December 10, 2018
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06Dec

US. Pensions Are a Hot Recruiting Tool in Health Care: Cerulli

Many hospitals' DB plans are not as well-funded as other corporate pensions, Cerulli reports. Even as most organizations have moved away from defined benefit plans in favor of defined contribution plans, not so health and hospital systems. Instead, according to research from Cerulli Associates, some within the health care industry that are having a rough time attracting and hanging onto talent are looking to leverage pensions as a recruitment tool. “While corporations are generally moving toward defined contribution plan offerings, health and...

December 6, 2018
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05Dec

Who Wins The Retirement Game?

On the plane to a family Thanksgiving a nice seatmate asked what kind of work I do (as she watched me struggle with a spreadsheet). I brightly told her I am an economics professor working to expand pensions to solve the retirement crises. She looked at me blankly and said, "I'm Canadian, we don't have these problems. That stopped me short. Really? Canada? Has the friendly nation to the north figured it out? Canada has been described, in jest of course,...

December 5, 2018
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November 2018

09Nov

US. Wells Fargo considering sale of retirement-plan unit

is considering the sale of its retirement-plan services business, according to people familiar with the matter. The unit could fetch as much as $1 billion, said one person, who asked to not be identified because the matter isn't public. The people said deliberations are at an early stage and the bank may decide to keep the business, which offers record-keeping, trust, custody and other retirement-plan services to corporations. A representative for Wells Fargo declined to comment on the potential sale. Wells Fargo,...

November 9, 2018
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08Nov

US. Midterm Elections: What’s The Verdict For Aging Policies?

Yesterday, one of the most significant midterm elections in recent history occurred, with significant implications for the outlook on public policies and legislation affecting aging and older Americans. Health and aging issues drove the midterms more than other issues, including preserving the Affordable Care Act (with special emphasis on threats to pre-existing condition protections), considering Medicare for All proposals and lowering prescription drug costs. The election results make prospects stronger for new policies to lower prescription drug costs, something President...

November 8, 2018
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02Nov

US. IRS Announces Higher 2019 Retirement Plan Contribution Limits For 401(k)s And More

Get ready to save more for retirement in 2019! The Treasury Department has announced inflation-adjusted figures for retirement account savings for 2019, and there are a lot of changes that will help savers stuff these accounts. After six years stuck at $5,500, the amount you can contribute to an Individual Retirement Account is being bumped up to $6,000 for 2019. The amount you can contribute to your 401(k) or similar workplace retirement plan goes up from $18,500 in 2018 to...

November 2, 2018
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October 2018

31Oct

US. IRS To Audit 401(k) Savers Who Contribute Too Much

We’ve written about the danger of overstuffing your Individual Retirement Account. Stiff penalties apply. Now the Treasury Inspector General for Tax Administrator is out with a report that suggests that some 401(k) workplace retirement plan savers are pushing the limits, saving more than what’s allowed, costing the U.S. Treasury. TIGTA’s recommendation: bring lax employers and errant taxpayers into compliance. The IRS’ response: It will beef up employer education and conduct targeted audits for taxpayers who appear to have excess 401(k) deferrals, especially...

October 31, 2018
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31Oct

US. The Dangerous Consequence Of Cutting Public Safety Pensions

Management consulting firm McKinsey reports that organizations that appear on “best places to work” lists often make the cut because their business strategy is premised on a long-term relationship with their employees. McKinsey credits companies for both the large and small signals sent to employees that an organization cares about its people. Valued by employers as a workforce management tool to recruit and retain talent, offering defined benefit (DB) pension benefits is one way that employers send a loud signal to employees...

October 31, 2018
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