Category Archives: Benefits

Supporting Parents in Low-Wage Jobs and Their Children

Source: National Women’s Law Center, Reports & Toolkits, 2016

Set Up To Fail: When Low-Wage Work Jeopardizes Parents’ and Children’s Success
Set Up To Fail Executive Summary
Set Up for Success: Supporting Parents in Low-Wage Jobs and their Children
Set Up For Success Executive Summary

Millions of parents across the country work in jobs where low wages, unfair scheduling practices, and minimal benefits make it difficult to meet both work and caregiving responsibilities. And the parents most likely to find themselves in low-wage jobs are women — disproportionately women of color and immigrant women.

Unpredictable work hours, nonstandard hours, rigid attendance policies with limited access to paid leave, and inadequate paychecks create unimaginable stress for parents, and make it difficult to provide their children with the high-quality early care and education they need to succeed in school and beyond. All too often, despite their best efforts, parents’ low wages and work conditions undermine their children’s chances for success.

Set Up To Fail: When Low-Wage Work Jeopardizes Parents’ and Children’s Success is a groundbreaking report that draws on academic and policy research as well as workers’ own stories to describe the interconnected challenges faced by low-wage parents in meeting their work and family responsibilities.

Set Up for Success: Supporting Parents in Low-Wage Jobs and their Children is an agenda for action that recommends two-generational policies, practices, and strategies to improve the lives of low-wage working parents and their children — and provides examples that have been advanced by different stakeholders.

Workplace Wellness Programs Characteristics and Requirements

Source: Karen Pollitz and Matthew Rae, Kaiser Family Foundation, Issue Brief, May 19, 2016

From the summary:
The majority of large employers that offer health benefits today also offer at least some wellness programs in an effort to promote employee health and productivity and reduce health related costs. Workplace wellness programs vary in the services and activities they include, and about three-in-ten large employers use incentives to encourage employees to participate. Depending on a program’s characteristics, different federal rules might apply. Final regulations recently issued by the Equal Employment Opportunity Commission (EEOC) would change standards applicable to certain workplace wellness programs that use incentives to encourage workers and their spouses to provide personal health information. These new rules are intended to be more consistent with other standards implementing requirements in the Affordable Care Act (ACA) that apply to certain workplace wellness programs. Both rules seek to balance employer interest in incentivizing workers to participate in wellness programs against requirements that prohibit discrimination based on health status, disability, and genetic information.

Puerto Rico and Pensions: the Basics

Source: Tyler Bond, National Public Pension Coalition (NPPC), June 7, 2016

Puerto Rico and its debt crisis remain in the news as Congress considers legislation to help the island territory restructure and manage its debt. Puerto Rico’s pensioners remain trapped in this crisis as well. Just last week, a new audit of the territory’s pension system by KPMG found that the pension system there could run out of money next year. Puerto Rico’s retirees risk being cast into poverty if the pension system is not properly funded- a risk that becomes even greater if the territory is forced to repay vulture hedge funds rather than put needed funds into its depleted pension.

Puerto Rico’s debt crisis, its causes, and its consequences are all complicated and, as a result, there is a lot of confusion about what is happening there. While we’ve written about it before, let’s cover some of the basics:
Puerto Ricans are American citizens ….
The legislation Congress is considering is not a “bailout” ….
What’s happening in Puerto Rico is not going to happen in a state …..
Puerto Rico, Pensions, and Vulture Hedge Funds
Source: Tyler Bond, National Public Pension Coalition (NPPC), March 23, 2016

When a Promise is Not a Promise: Chicago-Style Pensions

Source: Amy Monahan, University of Minnesota – Twin Cities – School of Law, Minnesota Legal Studies Research Paper No. 16-17, May 9, 2016

From the abstract:
Cities and states around the country have promised their workers – most often teachers, police officers, and firefighters – retirement benefits, but have in many cases failed to set aside adequate assets to fund those benefits. Several of these plans are predicted to become insolvent within the next decade and innumerable additional plans appear headed for insolvency in the decade that follows. Once insolvency occurs, pension benefits due to retirees will either have to be paid out of the government’s cash on hand, or else will simply not be paid at all. Based on their current financial positions, most jurisdictions appear unable to fund pension benefits while maintaining essential governmental services, unless taxes are raised significantly. This article is the first to examine whether and to what extent retirees will have effective legal recourse to secure the payment of their pensions in the event of retirement plan insolvency – a critical issue not only for pensioners, but also for taxpayers. It concludes that law is unlikely to provide effective recourse for retirees due to the inability of courts to force legislatures to appropriate funds, raise taxes, or incur debt. As a result, even in cities and states with apparently iron-clad legal protection for pension benefits, pension fund insolvency leaves payment of benefits in doubt, with any solution resting solely with the legislative branch. Understanding that solving the public pension problem is a political problem, rather than one that can be easily addressed through law, is critical to moving forward toward a solution that is fair to both employees and taxpayers.

The ARC and the Covenants, 2.0: an update on the long-term credit risk of US states

Source: Michael Cembalest, J.P. Morgan, Eye on the Market, May 19, 2016

As managers of ~$70 billion in municipal bonds across our asset management business (Q1 2016), we’re very focused on the total indebtedness of US states. New GASB rules have now standardized the reporting of municipal liabilities, so we’re taking this opportunity to update our assessment of how much it will cost states to service them. Total liabilities include bonds and obligations related to underfunded pensions and retiree healthcare benefits (referred to as “OPEB”, an acronym for Other Post-Employment Retirement Benefits). Pensions and OPEB are a big part of the debt picture: while US states have ~$500 billion of bonds supported by state tax collections and general revenues, they have another $1.0-$1.5 trillion of unfunded pension and OPEB liabilities, depending on rates used to discount them.

After analyzing 330 single-employer and multi-employer pension and OPEB plans, we created a single measure for each state. The chart shows the ratio of what states currently spend on bonds, pensions and OPEB as a percentage of their revenues (blue bars), and what they would be spending assuming a 6% return on plan assets, amortizing any unfunded pension and OPEB liabilities over 30 years (total bars). For multi-employer plans, we only include the state’s share of pension and OPEB liabilities since local entities are responsible for the rest.

State and Local Government Workforce: 2016 Trends

Source: Center for State and Local Government Excellence, May 2016

From the summary:
For the third year in a row, state and local governments are reporting an increase in hiring. Pressure on benefits continues, with employees taking on greater shares of health care costs and contributions to pensions. As the rate of retirements accelerate, there is a greater sense of urgency about recruitment, retention, and succession planning.
The ‘Silver Tsunami’ Has Arrived in Government
Source: Mike Maciag, Governing, May 31, 2016

Significantly more state and local workers are retiring or quitting, according to a recent survey.

Economic Volatility: Hidden Societal Cost of Prevailing Approaches to Pension Reforms

Source: National Conference on Public Employee Retirement System, May 2016

Pension funds are the great stabilizers of our economy. When individual investors run for the door during market downturns, pension funds are there to stay. They are long-term investors and remain in the market for the long haul. This provides financial and economic stability that is needed for economic prosperity….. Pensioners keep receiving their pension check in good as well as bad economic times. While incomes from jobs and investments decline during bad economic times, pension checks provide an economic cushion and keep local economies afloat. Unfortunately, we have been steadily dismantling pensions and hence undermining this economic cushion, increasing economic volatility as a result. Prevailing pension reforms increase economic volatility in another way. They contribute to the formation and bursting of asset bubbles……

How Did the Shift from Defined Benefit Pensions to Defined Contribution Plans in the Private Sector Impact Retirement Savings?

Source: National Conference on Public Employee Retirement System, NCPERS Research Series, February 2016

…..In a nutshell, our analysis shows that the historic shift from DB to DC plans in the private sector has reduced retirement savings by 50 percent during 1975–2012. For example, during this period, the combined DB and DC savings was about $6.9 trillion. If everyone remained in the DB plan, that is, if there were no massive shift to DC plans, the retirement savings would have been $13.9 trillion….

Children’s Health Spending Report: 2010-2014

Source: Health Care Cost Institute, May 2016

From the summary:
Children’s Health Spending: 2010-2014 examines spending on health care for children covered by employer-sponsored insurance from 2010 to 2014. For the first time, HCCI analyzed children’s health care spending trends at the state level, reporting on Arizona, Connecticut, Florida, Illinois, Maryland, Ohio, Texas, Virginia, and Wisconsin, as well as the District of Columbia.

Key Takeaways:

  • Per capita spending on health care for children grew an annual average of 5.1% per year between 2010 and 2014, reaching $2,660 in 2014.
  • Rising prices were the chief driver of growth in spending for children’s health care in 2014.
  • At the same time, there was a general decline in the use of health care services between 2012 and 2014.
  • Among the states studied, Arizona had the lowest per capita spending ($2,151 per child in 2014), while Wisconsin had higher per capita and out-of-pocket spending than the national average in every year studied – reaching $3,017 per capita in 2014.
  • Related:
    Report Appendices
    Press Release

    Traditional and Roth Individual Retirement Accounts (IRAs): A Primer

    Source: John J. Topoleski, Congressional Research Service (CRS), CRS Report for Congress, RL34397, April 27, 2016

    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. Although the accounts have many features in common, they differ in some important aspects. Both traditional and Roth IRAs offer tax incentives to encourage individuals to save for retirement. Contributions to traditional IRAs may be tax-deductible for taxpayers who (1) are not covered by a retirement plan at their place of employment or (2) have income below specified limits. Contributions to Roth IRAs are not tax-deductible and eligibility is limited to those with incomes under specified limits. …. This report explains the eligibility requirements, contribution limits, tax deductibility of contributions, rules for withdrawing funds from the accounts, and provides data on the account holdings. It also describes the Saver’s Credit and provisions enacted after the Gulf of Mexico hurricanes in 2005 and the Midwestern storms in 2008 to exempt distributions to those affected by the disasters from the 10% early withdrawal penalty….