October 2018

16Oct

US. Workplace Retirement Coverage Drops And The System Continues To Fail

Despite an aging workforce who are worried about retirement and despite $140 billion annual tax breaks, and despite relatively light regulation, retirement plan coverage at work (including defined benefit and 401(k)-type coverage) has declined over the last two decades. Just 40 percent of workers were covered by a retirement plan through their workplace in 2017 , 4 percentage points lower than in 2014. And retirement plan coverage has fallen in 14 out of 17 years since 2000. The lack...

October 16, 2018
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16Oct

Goldman Sachs Sees Stars Aligning for Pension PRT

Clients with defined benefit plans that are currently enjoying a bump in funded status may want to act soon to lock in those gains while market conditions remain favorable. According to Goldman Sachs Asset Management’s new white paper, “Stars Aligning for Corporate Plans to Take De-Risking Actions,” almost 25% of U.S. corporate defined benefit (DB) plans are now in a fully funded or over-funded position. As the paper’s title indicates, this means many plan sponsors are in a great position to...

October 16, 2018
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15Oct

Companies With Newly Flush Pensions See Chance to Unload the Risk

Some firms with highly funded pension plans are transferring retiree obligations to insurers U.S. corporate pensions are at the highest funded level since the financial crisis, which could lead more companies to turn over to insurers the responsibility for paying retirees, pension consultants say. Higher funding levels mean corporate sponsors get a better deal when transferring retiree obligations to insurers, so many firms are finding this to be the perfect time to transfer the risks associated with carrying pension plans. Defined-benefit pension...

October 15, 2018
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12Oct

Retirement Savings Inequality: Different Effects of Earnings Shocks, Portfolio Selections, and Employer Contributions by Worker Earnings Level

By Joelle Saad-Lessler (The New School for Social Research), Teresa Ghilarducci (Schwartz Center for Economic Policy Analysis (SCEPA); The New School for Social Research), Gayle Reznik (U.S. Social Security Administration) Changes in accumulated retirement savings, particularly in employer-sponsored defined contribution (DC) plan balances, differ by worker’s earnings levels. Earnings shocks, portfolio diversification, and employer contributions to worker’s DC plans affect retirement savings for lower earners more than for higher earners. The authors match Survey of Income and Program Participation data...

October 12, 2018
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11Oct

Trillions in US net worth vulnerable to recession: IMF

A severe recession would slash US public wealth by about $5 trillion, causing vastly more damage to Washington's finances than just an increase in debt and deficits, the IMF warned Tuesday. Yet governments around the world, many of which face similar dangers, do not clearly publicize their overall net worths, the International Monetary Fund said in a new report. This creates a potential blind spot for policymakers who could use this knowledge to head off economic risks, it said. The global crisis...

October 11, 2018
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10Oct

A shocking number of Americans think saving for retirement ‘can wait’—here’s why money experts disagree

Nearly one in three Americans have less than $5,000 saved for retirement. Experts generally recommend trying to accumulate at least $1 million, which gets more and more difficult the longer you put off getting started. And still, an alarming number of adults think saving for retirement can wait. Student-loan provider Navient conducted a national Money Under 35 study of more than 3,000 adults, aged 22 to 35. It reports that only three in 10 respondents are saving for retirement, and...

October 10, 2018
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09Oct

US. This Chart Shows How Much Health Care Will Cost in Retirement – at Every Age

Here’s some good news about medical expenses in retirement: health care inflation has slowed over the past year, lowering your projected lifetime tab, according to a new report. And here’s the bad news: even at this lower growth rate, health care expenses are a runaway train that can plow a hole into the most carefully constructed budget. Retirement health care expenses are projected to rise at an average annual rate of 4.2%, versus an estimated 5.5% last year, according to...

October 9, 2018
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05Oct

Putin’s Russian Retirement Age Hike And U.S. Social Security

Op-Ed by Elizabeth Bauer In the news yesterday:  despite public protests on the matter, Russian President Vladimir Putin signed into law a pension reform bill which increases the retirement age, formerly age 55 for women and 60 for men, to age 60 and 65, respectively. (See Radio Free Europe for coverage.) From an American point of view, one might be surprised that the retirement age was ever this low in the first place, or that retirement ages were and still remain different for men...

October 5, 2018
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04Oct

Why Americans Are Waiting Longer Before Retiring

We're finally seeing the effects of Social Security changes made in the 1980s. Something significant is happening in Social Security: People are retiring and taking their benefits later. These trends are at least in part the consequence of policy changes made in the early 1980s that were purposefully delayed in their implementation. Consider this: In 1997, 57 percent of men claiming their retirement benefits under Social Security were 62, the earliest age at which one can do so. By 2017, that...

October 4, 2018
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03Oct

US. International Paper and Prudential Transfer $1.6 Pension Obligation

As part of the PRT agreement, Prudential will assume the responsibility for paying pension benefits to about 23,000 International Paper retirees. International Paper announced plans to settle approximately $1.6 billion of its pension obligations by purchasing a group annuity contract from The Prudential Insurance Company of America. The parties size the pension risk transfer (PRT) deal as the second-largest to take place thus far in 2018, behind a group annuity transaction between MetLife and FedEx that covered some 41,000 retirees and...

October 3, 2018
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