August 2018

30Aug

US. 3 steps toward fixing America’s retirement system

The U.S. retirement system clearly has shortcomings that are leading to widespread insecurity among older workers. In recognition of this anxiety, recent meetings in Washington, D.C., focused on the system's much-needed modernization as the Bipartisan Policy Center (BPC) launched its Funding Our Future initiative. It focuses on three significant changes that could significantly improve retirement for many U.S. workers: Put Social Security on a sustainable financial path. More than two-thirds of Americans worry that Social Security won't be there when...

August 30, 2018
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25Aug

Graying of U.S. Bankruptcy: Fallout from Life in a Risk Society

By Deborah Thorne (University of Idaho), Pamela Foohey (Indiana University Maurer School of Law), Robert M. Lawless (University of Illinois College of Law) & Katherine M. Porter (University of California - Irvine School of Law) The social safety net for older Americans has been shrinking for the past couple decades. The risks associated with aging, reduced income, and increased healthcare costs, have been off-loaded onto older individuals. At the same time, older Americans are increasingly likely to file consumer bankruptcy,...

August 25, 2018
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24Aug

3 Unusual Retirement Risks You Can’t Ignore

The stock market and personal health are two common things people tend to worry about during their retirement years. Visions of being forced to move in with their children, a lack of savings and real estate prices can also cause anxiety. While those may be top of mind for some, they may not really be the largest threats to financial freedom. 3 unusual retirement risks that you should not ignore Risk of Living too Long This probably seems like a good thing...

August 24, 2018
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22Aug

US. Workers want employers to help more with retirement planning

Many employers appear to be missing the mark when it comes to helping workers prepare for their golden years. While just 16 percent of companies are "very confident" that their employees will be financial secure in retirement, they also often fail to offer the savings tools that their workers actually want, a new study from the nonprofit Transamerica Center for Retirement Studies shows. "There's a basic disconnect related to worker expectations," said Catherine Collison, president and CEO of the center and...

August 22, 2018
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16Aug

US. Rich Professionals Are Using Pension Plans as a Tax Dodge

There’s one area where the traditional pension plan is getting new life -- as a tax dodge for wealthy business owners. Pensions, also known as defined-benefit plans, can be used by doctors, law partners and wealth managers to stash hundreds of thousands of dollars in income a year. By doing so, they’ll get around the income limits Congress created to bar them from a generous new tax break for owners of pass-through entities, who report the firms’ income on their...

August 16, 2018
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16Aug

US. Have Public Employee Pensions Become More Generous, or Less?

There’s a debate going on about public employee pensions. One study finds that government pensions have become more generous over the years. But a prominent academic replies that public sector retirement benefits have remained steady in generosity and taxpayer costs have actually fallen because public employees are paying more for their pensions. Who’s right? Me, that’s who. It’s an important debate: retirement benefits are needed to attract public employees but excessive benefits can squeeze out other important parts of state and...

August 16, 2018
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15Aug

US. Despite Temporary Tax Advantage, Companies Pouring Money into Pension Plans Should be Prepared to Face an Increase in Future Funding Obligations

Many US corporations have been taking steps to make big contributions to their pension plans and close funding gaps because of current tax advantages, which have a September 15, 2018, deadline. But investment firm Cambridge Associates cautions that a focus on this near-term opportunity should not cause plan sponsors to overlook the rising long-term challenges to funded status that lie ahead. While the near-term result could be improved funded status for a given plan and company, it does not promise...

August 15, 2018
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10Aug

US. How Automation Will Affect Unfunded Pension Liabilities

In 2016, Deloitte Consulting and Oxford University did a study of public employees in the United Kingdom and estimated that up to 16% (almost 1 million jobs) could be eliminated by automation in the next twelve years. I think this is a wild underestimation. In the U.S. military, we call it the tooth to tail ratio—how many people does it take in the rear (the “tail”), to keep the individual fighter locating, closing with, and destroying the enemy (the “tooth”)....

August 10, 2018
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09Aug

US. Few in Temporary or Alternative Jobs Have Access to Employer-Provided Retirement Plans

Contingent workers—those who provide services on a short-term or temporary basis—are much less likely than traditional workers to have a retirement plan at work, according to data released recently by the federal Bureau of Labor Statistics (BLS). According to the bureau, 23.4 percent of contingent workers were eligible for—or had access to—employer-sponsored pension or retirement plans in 2017. This is about half the rate for more permanent or traditional workers, among whom 47.6 percent were eligible for an employer-sponsored plan....

August 9, 2018
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08Aug

US. The stealth pension mortgage on your house

States with unfunded public employee retirement obligations will have to rely on real estate property as their ultimate collateral to deal with the risk, writes experts on The Wall Street Journal. "The affluent can escape sales and income taxes by moving to a new state—but real estate stays behind," explain the experts. "Property values must ultimately support the obligations that politicians have promised, even if those obligations aren’t properly funded... Whether or not unfunded obligations are paid with property...

August 8, 2018
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