Category Archives: Retirement

U.S. slips to 17th in retirement security index

Source: Meaghan Kilroy, Pensions & Investments, July 19, 2017

The U.S. ranks 17th globally in retirement security, down three spots from last year, the Natixis Global Asset Management 2017 Global Retirement Index shows. The index, launched in 2013, assesses how well retired citizens live in various nations across four broad categories — health, finances, material well-being and quality of life. The 2017 index was released Wednesday. Forty-three countries with developed retirement systems were assessed in 2017, the same number as last year. Natixis, in a report accompanying this year’s release, attributed part of the decline in the U.S. ranking to “lagging life expectancy and a growing gap in economic opportunity.”….

Related:
2017 Global Retirement Index
Source: Natixis Global Asset Management, July 2017

Health Benefits for Members of Congress and Designated Congressional Staff: In Brief

Source: Ada S. Cornell, Congressional Research Service, CRS Report, R43194, January 13, 2017

Many private- and public-sector firms offer employer-sponsored health insurance to their employees and contribute toward the cost of that insurance as part of the employee’s compensation package. The federal government, as an employer, also offers health benefits to its employees and retirees. In general, federal employees receive health benefits through the Federal Employees Health Benefits (FEHB) Program, administered by the Office of Personnel Management (OPM). However, Members of Congress and designated congressional staff receive employer-sponsored insurance (ESI) through the District of Columbia’s small business health options program (SHOP) exchange, also known as DC Health Link (hereinafter the “DC SHOP”). ….. In addition to health insurance coverage under the DC SHOP, this report describes other health benefits available to Members and congressional staff, including the Federal Flexible Spending Account Program (FSAFEDS); the Federal Employees Dental and Vision Insurance Program (FEDVIP); the Federal Long Term Care Insurance Program (FLTCIP); the Office of the Attending Physician; and treatment in military facilities. …..

Quarterly Survey of Public Pensions for 2017: First Quarter

Source: U.S. Census Bureau, June 2017

This report provides national summary data on the revenues, expenditures and composition of assets of the largest defined benefit public employee pension systems for state and local governments. This report produces three tables: Tables 1 and 3 include data on cash and security holdings and Table 2 provides data on earnings on investments, contributions and payments.

State and Local Government Workforce: 2017 Trends

Source: Center for State and Local Government Excellence, June 2017

From the summary:
Recruiting and retaining qualified personnel was the top priority for 91 percent of respondents to the 2017 workforce trends survey released today by the Center for State and Local Government Excellence (SLGE). Respondents also rated staff and leadership development (77 and 76 percent) and succession planning (74 percent) as important workforce issues.

Key findings:
– Key findings from the annual survey, conducted by SLGE, the International Public Management Association for Human Resources, and National Association of State Personnel Executives were:
– 74 percent reported hiring staff
– 47 percent hired contract or temporary employees
– 38 percent shifted more health care costs to employees
– 24 percent established wellness programs.
– Every year since 2010, a majority of respondents to the annual survey has reported making changes to health insurance benefits. On the other hand, the pace of changes to retirement plans has slowed in recent years. In 2012, 24 percent reported increasing current employee contributions to retirement plans compared with 9 percent increasing current employee contributions in 2016. Positions hardest to fill in 2016 were:
– Police officers (21 percent)
– Information technology (17 percent)
– Engineers (14 percent) and
– Health care (13 percent)
– Skills in greatest demand were in interpersonal relations (65 percent), written communications (53 percent), and technology (51 percent).

(Un) Ready for Retirement

Source: Anna Petrini, State Legislatures Magazine, June 2017

States face a costly future if their citizens fail to save enough for retirement.

Most Americans are not saving enough for retirement. The problem is especially severe among small-business employees, low-income workers and communities of color. On the brink of a national retirement security crisis, state lawmakers are stepping into the breach with a spectrum of innovative solutions.

Retirement planning experts have traditionally used the analogy of a three-legged stool to describe the common sources of retirement income: Social Security, employer-provided pensions and individual savings. But the stool has grown wobbly for many workers, particularly in the private sector. For one, fewer employers offer traditional pensions, which puts the onus on workers to save more themselves. Another issue is changing demographics—people are simply living longer and need to save more money as a result. A third concern: Just how secure is Social Security?

As state officials stare down the prospect of mounting costs if their citizens retire into poverty, they’re looking carefully at how to boost retirement savings. Should they create and facilitate new retirement savings programs for private sector workers or encourage participation in existing plans?….

Importance of Individual Account Retirement Plans and Home Equity in Family Total Wealth

Source: Craig Copeland, Employee Benefit Research Institute, EBRI Notes, Vol. 38, No. 7, May 16, 2017

Home equity and retirement accounts—401(k)-type plans and IRAs—account for nearly all the assets that many families have to depend on in retirement outside of Social Security and traditional pension plans, according to new research from EBRI.
Related:
Press release

Workers Need a Bill of Rights

Source: Andrew Strom, OnLabor blog, May 24, 2017

Except for about a month in the summer of 2009 when the Democrats had 60 votes in the Senate, for the entire twenty-first century any proposal to substantially increase workers’ rights at the national level has had to be prefaced by the comment that, “of course, this is not politically feasible now.” But rather than just spending the next four years fending off misguided Republican legislation, I think it’s time to step back and focus on principles that should guide workplace legislation. Toward that end, here are some thoughts on a potential workplace bill of rights.

There might be some other rights that should be included in this list, and maybe folks have ideas about better ways to phrase the various rights. But, I think it would be helpful for the labor movement, worker advocates, and the Democratic party to start talking about this bill of rights in order to refocus our discussion about jobs. The measure of a good job, whether it is in manufacturing or the service sector, should be whether it provides these rights to workers. In addition, we should be thinking about what changes we need to see in our laws to ensure that all workers enjoy these basic rights on the job. Some of these issues can be addressed at the state level, although of course, that would mean that these rights would exist in only a handful of states. Here’s my proposed worker bill of rights – let the debate begin…..

Retiree Health Care Benefits for State Employees in Fiscal Year 2015

Source: Alex Brown, National Association of State Retirement Administrators, NASRA Issue Brief, May 2017

From the overview:
Other Postemployment Benefits (OPEB) is an umbrella term that characterizes retirement benefits, other than pensions, that are offered to employees of state agencies and participating political subdivisions who meet designated age and/or service related eligibility criteria. The most significant costs associated with OPEB benefits are for employer-subsidized health care for retired employees.
The brief discusses how different plan designs, coverage levels, and financing arrangements are associated with varying costs for sponsoring state governments.

Among the findings:
– Most states provide retiree health benefits to retired state employees, and benefits vary in design and delivery;
– More than three-fourths of the cumulative $585 billion in unfunded state OPEB liabilities are held by ten states;
– State spending on retiree health benefits was equal to 1.4 percent of total FY 15 state fund expenditures.

As state and local governments seek to reduce their liabilities, many public employers continue to accumulate assets to prefund future retiree health benefits and to reduce OPEB through program and policy changes.

Retirement Risk Innovation: State Shared-Risk Pensions

Source: Keith Brainard, Olivia Mitchell, Forbes, May 1, 2017

Concerns are growing about how to best manage risk in retirement. Traditional defined benefit plans can impart considerable risk to employers, while 401(k)-type plans place all or most risk on employees.
Shared-risk retirement plans are garnering attention and excitement around the globe. Outside the U.S., developments include “defined ambition” plans of the Netherlands and New Brunswick, Canada. There are also several striking examples of shared-risk plans right here at home. In fact, most U.S. state and local government retirement systems today embed risk-sharing features, and many new models have been developed in recent years. These retirement plan models provide ideas and inspiration for other retirement plans.

The Future of Retirement: Shifting sands

Source: HSBC, Future of Retirement series, 2017

From the press release:
HSBC calls for Millennials to wake up to living and working longer, as research finds only 1 in 10 expects to work past 65 Most Millennials have an unrealistic view of their retirement prospects according to a new report from HSBC. The latest report in The Future of Retirement series, Shifting sands, finds that on average Millennials expect to retire younger than other working age generations. Millennials expect to retire at 59, two years younger than the working age average of 61. The survey of over 18,000 people in 16 countries finds that only 10% of Millennials expect to continue working after 65 – even as their generation faces unprecedented financial pressures and state retirement ages continue to rise around the world. This is despite 59% of Millennials agreeing they will live much longer and will need to support themselves for longer than previous generations.