Source: Richard W. Johnson, Karen E. Smith, Damir Cosic, Claire Xiaozhi Wang, Urban Institute, March 27, 2018
From the abstract:
Social, economic, demographic, and public policy shifts have made Gen Xer and millennial retirement security a pressing concern. In this report, we combine data from multiple sources to project how various forces might play out over the next 30 years to shape the retirement security of late Gen Xers (born in the last half of the 1970s) and early millennials (born in the first half of the 1980s).
Source: Willis Towers Watson, February 21, 2018
Willis Towers Watson’s recent pulse survey on impacts from the new tax law reveals that the most common changes organizations have made or are planning or considering include expanding personal financial planning, increasing 401(k) contributions, and increasing or accelerating pension plan contributions. Other potential changes include increasing the employer health care subsidy, reducing or holding flat the employee payroll deduction, or adding a new paid family leave program in accordance with the Family Medical and Leave Act’s tax credit available for paid leave for certain employees.
Source: Rui Yao, Guopeng Cheng, Family and Consumer Sciences Research Journal, Volume 46 Issue 2, December 2017
From the abstract:
Among the generations, the Millennials are the largest group in the United States. Compared with their parents and grandparents, the Millennials need to assume more responsibility to prepare financially for retirement. Few studies have analyzed this generation’s retirement saving behavior. Using data from the 2013 Survey of Consumer Finances, this study examined the state of Millennials’ retirement savings, including retirement account ownership and balance. Results showed that only 37.2% of Millennials had any account designated for retirement. Among those with a retirement account, the average accumulated amount was $21,333. Factors that affected retirement saving behavior included age, education, total household income and assets, job tenure, self-employment, having a retirement saving motive, having a defined benefit plan, overspending, and risk tolerance. This study provided insight that can help financial planners and educators, as well as policymakers, understand the Millennials’ current retirement savings behavior. Also, the results can help the Millennials engage in saving for their retirement.
Awfully few millennials have retirement accounts
Source: Sheena Rice, Futurity, March 6, 2018
Source: Jennifer Erin Brown, National Institute on Retirement Security (NIRS), February 2018
From the summary:
A new report finds a deeply troubling retirement outlook for the Millennial generation. Most Millennials have nothing saved for retirement, and those who are saving aren’t saving nearly enough. The report indicates that many factors are contributing to this generation’s retirement savings challenges – from depressed wages to the lack of eligibility to participate in employer retirement plans.
More specifically, the analysis finds that 66 percent of working Millennials have nothing saved for retirement, and the situation is far worse for working Millennial Latinos. Some 83 percent of Latinos in this generation have nothing saved for retirement.
Source: Allen Smith, SHRM, February 22, 2018
Draft language in CBAs and benefits documents thoughtfully.
Retiree health care benefits end when a collective bargaining agreement (CBA) between a company and a union expires, unless the CBA provides otherwise, the Supreme Court ruled Feb. 20. The decision underscores the importance of giving careful thought to all language proposed and agreed to at the bargaining table, said David Pryzbylski, an attorney with Barnes & Thornburg in Indianapolis. Make sure the language in the CBA clearly expresses the parties’ intent, he stated. Benefits documents should as well, labor relations attorneys say. ….
Source: Katherine Barrett & Richard Greene, Governing, February 23, 2018
When pension reform happens, new workers often carry the biggest financial burden. But they don’t always have to.
Source: Max B. Sawicky, Jacobin, February 13, 2018
Warnings of looming pension bankruptcy aren’t just overblown. They’re politically dangerous.
Source: Dean Baker, Labor Notes, January 12, 2018
While many current retirees are reasonably comfortable because they have pensions, the future does not look bright for those yet to retire.
Traditional defined-benefit pensions are rapidly disappearing in the private sector—less than 15 percent of workers have them. Most public sector workers still have them—more than 20 million are either now receiving or looking forward to a pension. However, public sector pensions are coming under attack from the American Legislative Exchange Council (ALEC) and other right-wing groups.
Over the last four decades employers have been anxious to convert the traditional defined-benefit pensions into defined-contribution 401(k) plans.
The difference is that with a defined benefit, the worker is secure while the employer does not know exactly how much it will have to pay in. Workers are guaranteed a lifetime benefit based on their salary and years of service; the employer’s bill depends on the worker’s longevity and on stock market performance.
With a defined-contribution plan, the employer knows just how much it will pay each year, and the worker shoulders all the uncertainty. This means that workers face the risk that the market will plunge just after they retire—and they may quite possibly outlive their savings.
By getting rid of defined-benefit plans, employers are transferring risk to workers. In addition, they often contribute less to a defined-contribution plan than to the defined-benefit plans they replaced, in effect cutting workers’ pay. ….
Source: Joshua J. Waldbeser and Heather B. Abrigo, Journal of Pension Benefits, Vol. 25, No. 1, Autumn 2017
This article examines the requirements and standards of conduct associated with social investments in ERISA plans with an emphasis toward reducing risks and protecting participants’ interests.
Source: Jean-Pierre Aubry, Caroline V. Crawford, Alicia H. Munnell, Center for State and Local Government Excellence, October 2017
From the summary:
This issue brief examines whether state and local borrowing costs have become more sensitive to pensions since the financial crisis.
The brief’s key findings include:
Rating agencies have begun to explicitly account for pensions in their methodologies;
Several governments have experienced downgrades attributable, in part, to their pension challenges;
Pension funded status can have a meaningful impact on the borrowing costs for a municipality; and
Adequate funding, monitoring, and management of public pensions should be an important component of state and local governments’ fiscal management.