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Private Pension Issues

- Archives 2006 -

Also see our sites on Social Security IssuesTrade Unions 

and Pension Issues and World Pension Issues

Retirement May Be Far Off, But Check Savings Now (December 31, 2006)
Sure, retirement seems to be a lifetime away, but people forget two things. First: To live financially comfortably after retirement, you will need to save a lot of money. Second: Each day you go to work is a day closer to retirement and it will arrive before you realize it.
In this article, investment firms and financial planners give advice on how to save wisely for retirement and a guide to check how you are doing with saving for retirement.

Think your  401(k) is Insured Against Theft?  Think Again. (December 18, 2006)
Beyond statutes against fraud and theft, few protections exist for the 401(k) accounts that are largely replacing traditional pensions. Currently there is little or no insurance that safeguards pensions, bank accounts and even some investments with stockbrokers.  These loose regulations can lead to millions of dollars being stolen from a company’s retirement account. In the case of a small auto parts company in Tennessee , the benefits firm they hired to manage their account mishandled $7 million of employee savings. Due to lack of protection, employees and retirees may only get back a small fraction of their savings.

Family Needs to Talk Money (December 18, 2006)
Financial experts urge families to talk about long-term financial questions to help avoid crises between the generations. This article relates Matt Cardillo's case. In his early 30s, he asked his parents about their retirement savings because he knew he wouldn’t be able to assist them financially. Like often happens, his parents answered they don’t know much about long-term-care insurance and found it too expensive. But many children find it out too late, and have to face the costs of nursing homes. Indeed Baby-Boomers have to take such insurance seriously: one-third of Americans older than 65 are expected to spend at least some time in a nursing home and medical costs continue to rise. 

Equity-Indexed Annuities: Good for Agents, not for Investors (December 10, 2006)
Facing modest retirement savings, Fern Wakulich, 84, hired a financial adviser. Without warning her, he invested her money in an equity-indexed annuity that paid him a sizable commission while he knew that she wouldn't be paid until after her 92nd birthday. Indeed an equity-indexed annuity locks up the principal for 12 years at least. If the investment is canceled earlier, the policyholder is hit with a huge financial penalty, a “surrender fee.'' Since many financial “advisers,“ have abused older persons like Wakulich, some States supervise this financial product with many strict laws. They even advise older persons to invest in a portfolio made up of Treasury notes and stock index funds, for the same result without any fee. 

PBGC Sets Maximum Annual Benefit for Pension Plans (December 5, 2006)
The federal agency that insures private pension plans for millions of Americans recently set the maximum annual benefit for plans taken over next year at $49,500 for workers who wait until 65 to retire. The figure represents a 3.9 percent increase from $47,659, which was the 2006 maximum annual benefit for those who wait until 65 to retire. In recent years, many companies, especially the unionized steel and airline industries, have dumped their pension liabilities onto the PBGC, reducing such workers’ pensions significantly.

Investor Priorities Will Be Influx as America Faces up to a Pensions Gap
(December 4, 2006)

By 2030, as America's baby-boomer generation enjoys its retirement, the US economy will have to support twice the current number of retirees, with only 18% more workers. Analysts estimate that US corporate pension plans are underfunded by about $450 billion. And of the 360 companies in the S&P 500 index that have pension schemes, 297 will be underfunded at the end of this year. Experts argue that demographic shifts have made the US pensions system "functionally bankrupt." Why has the government allowed companies to underfund pensions? The workers have been on the job for 40 years or more. Did the corporations expect them to die at age 65? 

Ungodly Pensions Paid to CEOs (November 22, 2006)
Two radically different worlds exist as far as pensions are concerned. On one hand, there are the rank-and-file workers who worry about the contributions they paid during their working lives. On the other hand, there are the CEOs of America's 400 largest and richest corporations who gathered in a pension-busting movement known as “Business Roundtable.” They declared that every worker must be responsible for his or her own retirement accounts. Companies agreed to “spend what it takes" to switch Social Security to private pension accounts. Will those CEOs also renounce their corporate guaranteed pension payments?

At One Firm, Financial Crisis Crushed 401(k)s, Insurance (November 20, 2006)
The 401k is said to be one of the most secure benefit arrangements an employee can receive. However, this is not the case for the employees at the Diversified Corporation Resources Inc. (DCRI), a human resources company. Employees there have experienced the horror of not having adequate health benefits and are left high and dry with thousand of dollars’ worth of unpaid medical bills. Additionally, the thousands of dollars they contribute towards their 401(k) and health insurance plans will not be accessible to them. The Department of Labor is currently investigating DCRI for failing to forward employee contributions to the 401(k) fund. Will the current and former employees have any chance of recovering the money they have contributed towards this insurance? "No," Ms. Jones, a former employee, said. "It's never coming back."

New Law Gives More Shelter to 401(k)s (November 5, 2006)

Until now, only a spouse could roll over 401(k) money from the account of a deceased person without paying taxes on it immediately. Beginning next year, a son or daughter, domestic partner or even a parent will be eligible for a similar tax benefit. Due to a recently approved provision of the Pension Protection Act of 2006, beneficiaries are shielded from huge tax hits and can save more money over the years. This new law benefits the rich far more than the poor.

The Savings Game: Annuities Should be Part of your Financial Safety Net in Retirement (November 1, 2006)
As more U.S. citizens worry about being able to afford retirement, some economists believe that annuitization provides lifetime income security. Debates are ongoing whether this is the best type of savings scheme. In a typical immediate annuity, you pay a lump-sum premium and in return the insurance company guarantees to pay you an income for life. However, many buyers of annuities may lose 15 to 20 percent of the value of their premiums due to hidden costs. Still, some independent studies claim that many retirees would do well to annuitize some of their savings.

Spitzer Suit Accuses Company of Abuse in Insurance for Elderly and Ill (October 27, 2006)
New York attorney general Elliot Spitzer recently accused Conventry First, a life settlement company, of bid-rigging and other types of fraud in acquiring more than $3.6 billion worth of life insurance policies. Documents released by the attorney general’s office show Coventry executives and outside brokers detailing agreements to minimize how much Coventry paid to maximize brokers’ fees. Coventry executives disputed the charges. “This is an industry with big ethical problems,” said Jim Poolman, North Dakota’s elected insurance commissioner. “This business is filled with corrupt players. And there’s a larger question: should someone profit from another person’s death?”

Remington Freezing Pension Plans for Non-Union Employees (October 11, 2006)

Yet another company plans to freeze pension plans starting January 2008. The Remington Arms pension will no longer increase benefit payments in hopes of improving its cash reserves. Currently, the decision only affects management employees. Pension negotiations with unionized employees will begin in June 2007. 

Spitzer Aims at Another Mark: Fee Disclosure (October 10, 2006)
Amid the increasing scrutiny regarding fees levied by 401(K) retirement savings plans, New York State’s attorney general Eliot Spitzer, is close to reaching a 
settlement agreement with ING Groep NV, a unit of the insurance company. Allegedly, ING took undisclosed fees to promote certain funds in a retirement plan for New York State teachers. 
The expected settlement will require that ING provide entirely new plain-English disclosures about total fees charged investors. It also requires ING to provide new information about the payments it receives for including other companies’ funds in its retirement plans. Without admitting or denying wrongdoing, ING is expected to agree to pay $30 million to New York State teachers who invested through ING .

In Some Deals, Executives Get a Double Payday (September 8, 2006)

In a potential leverage buyout, private-equity firms can offer high-powered compensation to top level executives. For instance, if management hits financial and operational targets set by the new owners, executives can receive very attractive stock options. When the company is recapitalized or goes public, the executives often get bonuses valued at hundreds of millions of dollars. As a result, Spitzer 
private-equity firms have notched seven of the 10 largest leveraged buyouts of all time this year. However, shareholders sometimes revolt against such acquisitions due to alleged preferential treatment for executives in connection with efforts to complete a sale. Also, at a time when companies are cutting private pensions for the majority of corporate employees, top executives of target companies involved in such deals are just getting richer, much richer. 

Delta gets Court Approval to End Pilot Pension Plan (September 5, 2006)
In the quest to emerge from bankruptcy, Delta Airline officials recently terminated its pilots' defined benefit pension plan. Judge Adlai Hardin issued his ruling allowing Delta to end the plan after DP2, a group of about 100 retired pilots, withdrew its objection to the termination, Delta said. The airline will pay DP2 about $500,000 for legal fees and other expenses. More than 13,000 active and retired Delta pilots and their beneficiaries will be affected.   After the termination, Delta officials estimated pilot retirees will receive on average about $75,200 in annualized pension benefits. The airline's pilots' union, representing more than 6,800 current pilots, agreed to the move.  The termination would not affect Delta's other defined benefit pension plan, covering about 91,000 active and retired flight attendants and ground employees.

CRS Report for Congress: Pension Sponsorship and Participation: Summary of Recent Trends (August 31, 2006)
According to an updated CRS Congress Report, statistics have shown a steady decline in the number of employer-sponsored retirement plans among private-sector workers between the ages of 25 and 64.  Yet, with increased longevity rates, retirement income has become an increasing concern to Congress and the public.  According to the report, this trend will have drastic effects on the economic well-being of future retirees since pensions and Social Security benefits will be paid over longer periods of time; savings will have to be stretched over longer retirements; and Social Security benefits will have to be financed by a working population.  (The article fails to call for greater taxation of the rich who have benefited from recent privatization programs.)  Nevertheless the article offers a comprehensive summary of recent pension trends.  

Pensions Likely to Stay Dying Breed (August 29, 2006)

More American companies are freezing defined benefit pension plans claiming that it costs too much to maintain them.  Since many of today’s employees are living longer, overall costs have gone up and corporate leaders have decided to freeze pension plans and contribute more to employee savings and investment plans such as a 401(k).  For companies, there are clear economic benefits to freezing a pension plan. Jack VanDerhei, a professor at Temple University and a research director at the Employee Benefit Research Institute, has analyzed pension freezes and estimates a hard freeze can cut the annual retirement payout to a worker by more than half.  While companies are finding ways to decrease costs, long-term employees who have dedicated years of service will be most affected with far lower pensions than they expected in retirement. Not a fair deal.

New Law Eases Taxes On Inherited 401(k)s (August 23, 2006)
For far too long, tax headaches commonly plagued heirs of retirement accounts due to lack of legal marital status. Prior to the new law, only surviving spouses could transfer money inherited from a retirement plan into an individual retirement account. Now children and any other non-spouses can also transfer inherited funds into an IRA. This new provision gives all heirs the ability to spread out distribution through the years and no longer bear the huge income-tax burden. Gay-rights groups and other organizations are celebrating the long-overdue victory.

Report: Annual 401(k) Benchmarking Survey 2005/2006 Edition (July 2006)
(PDF format, 39 p)
The survey, jointly sponsored by Deloitte Consulting LLP (Deloitte Consulting) and the International Foundation of Employee Benefit Plans and its affiliated Certified Employee Benefit Specialist (CEBS) program questioned 830 401 (K) sponsors about the plan characteristics, the rewards programs as well as about their effectiveness and the barriers they face. The findings demonstrate a rising participation level as well as faster and less restricted eligibility for the employees. Auto enrollment is also on rise while efforts to boost employee deferrals via “step-up” programs become more common. However, the survey also finds that regardless of the growth in 401(K) participation, many employees are still financially unprepared for the retirement.

Nearing Retirement? Here's How to Ease the Transition (June 26, 2006)
Baby boomers about to retire may be thinking how to spend all the free time they will have. They may also fear for their financial situation. In fact, maintaining living standards may be more difficult for baby boomers about to retire. According to a “national retirement risk index,” 43% of US citizens will not be able to maintain the same quality of life. If you think you are among those 43%, this article may help you ease the transition.

As Workers' Pensions Wither, Those for Executives Flourish (June 23, 2006)
As companies report high costs of pensions, many take measures to reduce these costs at the expense of ordinary workers, freezing pensions or reducing benefits. However, pension funds are often adequately funded, or even over-funded, because of tax breaks and growth on investment. While these pensions earn companies money, executives’ unfunded pensions create a significant drag on earnings, reported as debt. Even so, executive pensions are getting larger as other employees lose their benefits. Many companies hide the reality of the high executive pension costs in aggregate data reports and cuts to employee benefits.

Cash for Retirement. Maintaining Standard of Living (June 21, 2006)
A new Study of the National Retirement Risk Index highlights that many people are ill-prepared for retirement. It shows that 43% of working-age households will not be able to maintain their current standard of living. The author of the article suggests that those near retirement need to determine the amount of money they will need. If it’s not sufficient, they will likely have to consider extending their years in the workforce.

CEO’s Salaries Raise Voices (June 19, 2006)
(Article in French)
As the employer-based pension system fades away, scandals over CEO income rage. In France, CEO income has always been a hot topic, while Americans have been more likely to accept high CEO income as a side effect of the “American dream,” acceptable though hard to justify. Lately scandals such as the one surrounding the former CEO of Vinci - who was receiving more money than all his employees combined - have caught the public’s attention. M. Raymond, CEO of Exxon Mobile, received about $686 million between 1993 and 2005 - a bit less than $150,000 per day. These figures even Americans find hard to accept. The Business Roundtable organization stated it was in favor of “more transparency” about CEO income for the 100 largest US companies. 

The “Global Solution,” by J. Siegel (June 13, 2006)
(Article in French) 
The US will soon need substantial foreign investments and radical outsourcing in order to continuing to live with the same economic habits over the next several decades, concludes J. Siegel in his upcoming book, the Global Solution. The guru author of the 1990's explains that baby-boomers will massively sell their stock shares to fund their retirement. The value of their assets - bonds, stocks, houses – will dramatically sink unless the US “embraces globalization.” Critics argue that Siegel underestimates the US and misinterprets bond-selling patterns. 

Cloud of Liability Over Pension Benefit Guaranty Corp (June 8, 2006)

The Pension Benefit Guaranty Corporation (PBGC) is actually under-funded and its situation is likely to get worse. In fact, since the country is switching from an employer-based private pension system to an employee-controlled one, the PBGC receives fewer premiums from employer-provided pensions. “The number of Fortune 100 companies offering pensions in 2005 has dropped to 37, down from nearly 90 in 1985,” the article explains. Thus, the future looks uncertain for the nation's safety net for employer-funded plans. 

Retirement Likely Will Be a Struggle for Many (June 7, 2006)

According to research published by the Center for Retirement Research at Boston College, almost fifty percent of the American population will not have enough income to “live comfortably in retirement.” Most at risk are young baby boomers, the ones born after 1955. Those who retire in less than two years from now are relatively better off. “The generation difference can be attributed to the decline in Social Security benefits and employer-sponsored pension plans, and the increased reliance on 401(k) plans,” the study explains.

Fewer Employers Offer Pension Plans (June 6, 2006) 
Since only 37 out of the 100 biggest US companies still offer employer-based pensions, the Pension Benefit Guaranty Corporation (PBGC) is running under-funded. That’s why the Bush Administration is willing to increase the pension premiums employers pay the PBGC. In the article, William Arnone of Ernst & Young’s human capital group asks "Is it any surprise they are abandoning these (pension) plans?” In fact, employer-based plans are caught in a vicious circle that seems to predict the monopoly of employee-controlled pension plans such as the 401(k). 

New Ad Campaign Is Launched To Save Worried Automakers Retirees (June 6, 2006)

(Article In French)
Are automobile manufacturers using the plight of retirees to market more cars? A $1 million (700 000 €) ad campaign has been launched to draw buyers back to made-in-America brands. The ad argues that buying foreign brands will dramatically affect the plight of retirees. Explicitly the campaign was launched by worried retirees to raise awareness among customers. But there is strong suspicion that the three great American car manufacturers Ford, General Motors and DaimlerChrysler funded the ad.

When Your Company Retirement Plan Doesn't Include Socially Responsible Funds (June 5, 2006)

“Has this happened to you? You want to invest responsibly, but your employer's retirement plan only offers funds that don't screen out objectionable companies. Is there a solution?” Laurent Belsie, from The Christian Science Monitor discusses these very topical questions in a dialogue with Rob Thomas, founder of Social(k) and specialist in “ethical investment.”

A Job to Do Before Retiring (June 5, 2006) 
This article describes the common situation of many retirees who worked 40 years in one of the companies who either collapsed or bankrupted, leaving the future retirees behind. On the other hand, it ironically underlines the situation of a few legislators who are lucky enough to enjoy a full pension after working even only a couple of term. Except that, of course, they voted the bill that entitled them to this higher eligibility category. Rep. Steven Nickol, R-York, “one of only a handful of legislators who voted against the text five years ago,” the article explains, fights against this injustice and its cost sustained by the Pennsylvania residents. 

Claim Your Pension in the “Lost and Found” (May 2006) 

The AARP gives a few tips to future retirees. Look for the Pension Benefit Guaranty Corporation (PBGC), which can help a person claim an entitled pension from a former employee. “It doesn’t matter when you leave the job as long as you are vested in the pension plan,” AARP explains. Another address to keep in mind is the Pension Right Center, another helpful organization “dedicated solely to protecting and promoting the pension rights of American workers, retirees, and their families.”

Japanese Cars, American Retirees (May 19, 2006)
When the automobile industry expanded fifty years ago, generous retirement benefit checks were part of the expectation of employees and unions of the Big Three (General Motors, Ford and Chrysler). Providing free health care and a defined pension benefit seemed cheaper than giving workers more salary. These benefits are now a huge burden to the companies as the number of retirees increase. For example, GM has a future pension liability that is more than the market value of the whole company. Having witnessed American auto companies struggle with retirement benefits, Japanese auto makers in the U.S chose not to deal with their pension issues in the same way. 

NWA Pension Relief Likely, Senator Says (May 12, 2006)
Since Northwest Airlines only has a few years to make contributions to their three pension plans that are underfunded by $3.7 billion, management and labor leaders are making every effort to get a new law passed that will extend the timeline to 20 years. Without an extension, Northwest says it will be forced to end company pension plans. Employees have made some sacrifices in an attempt to preserve their retirement plans. For example, so far in 2006, pilots agreed to shift to a 401(k) plan and extend a 23.9 % pay cut. 

Survey: Companies Move Away From Pensions (May 3, 2006)
According to a survey by the benefits consulting firm Watson Wyatt Worldwide, just over one third of the nation’s largest 100 companies offered a traditional pension plan to their new employees in 2005. The survey shows a significant decrease in the number of companies offering pensions over the past twenty years. Instead, many large companies are shifting towards 401(k) plans, leaving each employee to take care of their own financial future. 

Aging in Place (April 24, 2006)
Reverse mortgages are loans for retirees that require no monthly repayments and are given against part of a person’s home equity. These loans may help older persons live at home longer, however, reverse mortgages have not really caught on among retirees in the US. Although the loans promote “aging in place”, consumers need more protection. Reverse mortgages are currently being introduced in other countries, such as China.

Can a Specialist Help you Retire Richer? (April 24, 2006) 

As baby boomers reach retirement, they increasingly turn to pension experts to plan their investments. The large amount of funds that boomers which to invest is attracting unscrupulous salesmen who are selling dubious investment plans. The state securities regulators are issuing strong warnings to baby boomers.

Georgia to Pay Back Pensions for Black Police (April 19, 2006) 

In Georgia, some police officers were denied their pensions from the 1950’s to the 1970’s because of their race. On April 18, 2006, the Georgia governor signed a bill that will allow them to get their money back. Administrators of the pension fund admitted that although a “formal policy to ban black officers” never existed there was “some sort of exclusion.” While it is never too late to serve justice, most of the police officers are now dead. 

Hedonic Behavior; Drowning in Debt (April 13, 2006) 
(Article in French) 
The debt bubble threatens to derail many baby boomers’ retirement plans. Although the personal debt statistics in the US haven't changed much as a percentage of net worth or multiple of income, the financial situation has become more difficult. Americans now have longer life expectancies, their retiree health costs are higher and Medicare reimbursement and interest rates lower. Last, the deterioration of traditional pension system threatens to make the situation even worse. 

Proposed Pension Bill Opens Escape Hatch for Reluctant Providers (April 13, 2006)

Congress finalized legislation designed to counter the projected pension financial crisis. However, unions, workers rights’ advocates and retirees criticize the bill and denounce Washington’s intention to reduce “government and corporate liabilities (rather) than to preserve a source of retirement security for millions of Americans.” Although the bill is supposed to encourage employers to cover benefits for both current and projected future pensions, opponents argue that it will instead lead employers to “freeze plans, [and] make it less likely that new plans will be formed,” explained Dallas Salisbury, president of the think tank Employee Benefit Research Institute. 

CEO Say Delphi Can Save Pensions (April 13, 2006)

Delphi Corp. Chief Executive Steve Miller, who rattled the auto industry last Friday with a sweeping restructuring plan to eliminate more than 23,000 workers, defended his actions while expressing a desire to protect pensions in a speech Monday before the Detroit Economic Club. Workers who attended the speech doubted Miller’s sincerity and continue to worry about their pensions. Indeed, Miller added, “it is essential that the restructured Delphi be a robust enterprise.” Stay tuned.

Save Yourself (April 11, 2006)
Planning your retirement and starting saving plans when you are 30 years old may still sound early. However, US studies and surveys show that some young families that earn middle to high salaries are starting to prepare for old age on their own. Unfortunately, persons who earn low wages have a difficult time saving as their salaries can’t cover the relative high costs of housing, food and other essential expenditures.  In this article New York Times’ David Leonhardt analyses the advantages and ways to save at an early age.GAA suggests raising the minimum wage and low wage salaries as a way to encourage savings among the poorest.

Retirement: Great Expectations, No Preparation (April 4, 2006)
Financial forecasters predict that a large number of future retirees will not be prepared for their retirements. Employee Benefit Research report found that among those who are confident about retirement only 22 % are currently saving for it and 39 % have $50,000 or less. The report points out that many workers do not have a realistic vision of retirement; many use their parents as examples and most of their parents have pensions and health care benefits to rely on. The percentage of current workers who are saving for retirement is up, the study points out, and new pension plans in Congress may change future retirees outlook for the better. 

CEO Says Delphi Can Save Pensions (April 3, 2006)
The CEO of Delphi Corporation, Steve Miller, recently defended cutting 23,000 jobs as necessary to maintain the solvency of the company and to maintain the company’s pension obligations. Miller is continuing to fight an uphill public opinion battle to prove that his actions are indeed better for the company and its workers. Those that disagree with Miller range from the labor union members affected by his policies but also include Gov. Jennifer Granholm of Michigan and General Motors President, Rick Wagoner. It seems clear that Miller’s drive to win over public support will fall flat. 

House Leader Says Pension Bill Stalled (March 30, 2006)
The highly anticipated US pension reform bill is still locked in Congress. As the legislators begin their two week spring recess, House and Senate negotiators continue to discuss the bill. The author claims that the debate focuses on companies with bad credit, such as the three major auto companies, and whether these companies should be required to “put considerably more money into traditional pension plans once they get bad credit.” 
The Bush Administration wants troubled companies to fund their pension programs fully before they take bankruptcy rather than unloading the pensions on the federally-sponsored Pension Benefit Guarantee Board. 

Retirees getting caught in the income trap (March 27, 2006) 
(Article in French)
“More stocks, less bonds.” US financial advisers are currently repeating this mantra. As retirees over-invest in bonds to secure a good short term income, they risk jeopardizing their future wealth. Although stocks are more volatile in the short term, they generate more wealth in the long term. Faced with high interest rates, taxes and high inflation, boomers should consider their long term investments more seriously.

Pension Agency Seeks Outside Legal Advice on GM (March 24, 2006) 

The Pension Benefit Guaranty Corporation (PBGC), a government agency that insures corporate pensions, asked for private legal advice on GM’s situation. Bankruptcy was suggested among the possibilities. Indeed, the company is in deep financial trouble. As the article explains, the last time the PBCG asked for private legal - for the United Airlines’ bankruptcy case - United ended up “terminating its pension plans.” In fact, GM claims its pensions are over funded although two other estimates (including one by the New York Times) reported that GM pensions were under funded.

Buyout Feels to Them Like Being Sold Out (March 23, 2006)

GM is ready to pay its employees as much as $140,000 to leave the company, “in some cases, without healthcare,” the article explains. Although many employees are ready to fight the buyout, United Auto Workers offices are busy receiving phone calls from employees accepting the offer. Indeed, GM is hoping to shrink their labor force by 30,000 employees, to stay competitive. There is no such a thing as the “blue-collar upper class,” an employee asserts. The “golden GM pension” that attracted so many workers to the company is no longer a reality. The auto industry employs about 930,000 factory workers in the US and “strike” is a word that some of them have had in mind for the last few months.

As Companies End Their Traditional Pensions, Workers Are Left out in the Cold (March 2006) 

In its latest bulletin, AARP published the story of Margo Bryerton, 56, a Verizon network service manager. Ms. Bryerton explains that if she retires at age 65, as she had planned earlier, she will lose $300 000. Verizon announced last December that it would freeze its pension plans after June 2006. Ms. Bryerton has to think over the retirement age she had anticipated and needs to keep contributing to her 401(k) plan but won’t have enough time to catch up with the pension she expected. The pension reform currently reviewed in Congress won’t help people in Ms. Bryerton’s situation. Indeed, “the legislation could give less protection to workers and more to the Pension Benefit Guaranty Corp,” AARP says. 

Why Are Healthy Employers Freezing Their Pensions? (March 2006) 

This study reviews the major pension freezes of the last two years and explores the impact on employees at different stages in their careers. It also offers different explanations why employers are shutting down their plans. First, some US companies are cutting pensions to reduce workers’ total compensation in the face of intense global competition. Second, some employers have been forced to cut back on pensions in the face of growing health benefits to maintain existing compensation levels. Each of these explanations is highly documented and helps explain the current trends in pensions. 

Pension Concerns? Five Ways You Can Take Action (March 2006) 

If you happen to have pension concerns; here are five tips to change your worry into action. Among them: where to find out about your rights, how to get in touch with the pension changes. Stay informed and get some control! 

Pension Reform Politics (March 26, 2006) 

This New York Times editorial targets the critical pension reform legislation currently in Congress. It says that the reform bill offers changes “worse than worthless.” To insure that companies contribute enough money to their pension plans, the bill planned a 7 year phase of transition for the firms to step up their contributions. On the other hand, Republican Representative John Boehner suggested a “super-slow phase-in” that is now part of the House bill. This would weaken the reform. There is still time to make you r opinion known with your legislators. 

Inherit the Wind; There's Little Else Left (March 26, 2006) 

According to most economists, baby boomers are not well prepared for their retirement. Chances are that they will have to face the erosion of the classic pension systems. But the baby boomers should not plan on their parents’ inheritance to help them out. According to the article, most retirees will not inherit much due to the increase in their parents’ life expectancy. Most people over eighty will spend a huge portion of their savings on nursing home stays or healthcare, leaving little to their heirs. 

System Freeze for Unisys Pensions (March 23, 2006) 

Unisys announced that beginning next year it will stop accruing future benefits to its defined benefits plans and will close them to new participants. But Unisys isn’t alone in such actions. IBM , General Motors and Verizon recently froze their pension plans as well. 

Working For a Good Retirement (March 22, 2006) 

When people work longer, they produce additional goods and services for an economy. They also earn more income and usually save some of that income. At the same time, they create a positive effect on Social Security deficits by delaying their receipt of government benefits, and, quite importantly, paying more taxes. This report offers a new vision of the wide range of advantages of the effects from additional work, both at a macro and at an individual level. Among them, at the macro level, the Social Security earnings generated from just one additional year of work are almost equal to the entire Social Security shortfall predicted for 2045. 

A Plan, With Security (March 22, 2006)

This Philadelphia Inquirer editorial suggest ways that the US Social Security system could be strengthened. It proposes a five step plan. As a first step: increasing the wage base taxed by Social Security. Then, dedicate a limited estate tax to Social Security and switch to a new way of calculating cost-of-living increases. The fourth step would be to index benefits to adjust for increasing life expectancy. And finally, add new employees from state and local government to the Social Security system diverting them from other plans. 

Relief for Retirees on Wall Street? (March 22, 2006)

The columnist sums up the current discussions about the 2005 Pension Protection Act in Congress with the question:  Does the proposed Pension Act intend to help primarily pensioners or hedge fund managers? Two versions of the bill now exist, each supported by different lobbies. Pensioners’ advocates fear that when converting traditional pension funds into regular bond funds, stock markets will strengthen the pressure on companies. The stock markets might well decide who will get what pension.

GM Offers Workers Up to $140K to Leave (March 22, 2006)
General Motors is offering over 100,000 United Auto Workers a buyout for nearly $140,000 if they have been working for the company for at least 10 years. GM’s deal depends on workers giving up their retirement health benefits, a cost GM says it can no longer afford. GM also has obligations to the Delphi UAW members of UAW and plans to offer them a buyout plan later this year. GM has contractual obligations with workers until September 2007. After that date GM intends to close a large number of auto factories and throw its workers out of jobs. 

Chrysler to Change Health Plan for Salaried Employees, Retirees (March 20, 2006)
Daimler Chrysler has announced tremendous changes in the health plans affecting its 14,900 active workers and about 17,600 retirees. Beginning next year, premiums for health benefits will be re-scaled according to salary; top executives will receive a 100% premium. Like other carmakers, Chrysler faces intense competition in the car market, in a time when health costs are soaring (Chrysler had doubled its health expenditures since 2000). Chrysler also plans to cut 6,000 administrative jobs by 2008 to increase its profits.  In many other industrialized countries, tax-supported national health care permits all companies to operate far more cheaply and all citizens to access health care.

Major Changes Raise Concerns on Pension Bill (March 19, 2006)
With a strong directive from the Bush administration, Congress set out more than a year ago to fashion legislation that would protect America’s private pension system, tightening the rules to make sure companies set aside enough money to make good on their promises to employees. But most companies, either financially weakened, are pretty reluctant to obey the directive down to the letter. 

To Draw Pension, Some Must Hunt for It: Sleuthing, Challenges Help Recover Millions (March 14, 2006) 

Most workers rightly believe that when they retire they will receive their pension benefits. However, a number of retirees are not able to claim their benefits because their former companies were sold and the funds are no where to be found. Missing records and a lack of resources to pursue legal battles against employers prevent older persons and their families from obtaining such pensions. This Boston Globe article illustrates the story of a widow who did not give up until she claimed her husband’s monthly pensions. A free counseling program from the University of Massachusetts provides services for persons dealing with complex pensions issues. 

Do the Math for Lost Pensions (March 12, 2006)
As many large US corporations shed their defined pension benefits and switch to contribution-based 401(k) plans, many workers are going to need to invest more. One researcher discovered that those with defined pension benefits that have been switched to 401k’s will need to save an additional 20 % to retire at the level they would have enjoyed with the defined benefit. This article provides a glimpse into the limitations of 401(k)’s and options for workers to save more with new retirement plans. 

Few U.S. Seniors Working; Most People Retire by 65 (March 10, 2006)
Although US life expectancy has increased in the past few decades, the average retirement age is now 65 years, much younger than a few decades ago. But many of the oldest baby boomers, reaching 60 this year, have already left the work force. Meanwhile, US private pensions have been collapsing as companies take bankruptcy. The prescription drug plan in Medicare (that benefits pharmaceutical company profits) is unsustainable, the article says. For those who retire now, $1 million saved in a retirement account is not much if they expect to live another 20 years.

GM Retirees Fight Benefit Cuts (March 7, 2006)

To the dismay of many retirees, an agreement reached last November between General Motors Corp. (GM) and United Auto Workers (UAW) to address the rising health care costs of employees is getting close to federal approval. The agreement is designed to cover retiree health care costs for the next twenty years for an extra dollar a day out-of-pocket on top of what retirees already pay. Supporters say an extra dollar is trivial while critics argue that this agreement is not a guarantee, nor does the agreement acknowledge promises made by GM to cover retiree health benefits since 1980. 

State Employees’ Pensions Might Carry Big Price Tags (March 6, 2006)
Pension benefits for Pennsylvania lawmakers, active state employees, and teachers increased in 2001. When the pension change takes place in full force in 2012, taxpayers may have to pay billions to support this new scheme. There is discussion about changing the defined-benefit system to a defined-contribution plan which many large corporations have done. Currently the state employee’s system uses 4% of its payroll costs to fund pensions but by the year 2012, it could grow to 23.5%. State workers expect these pension and health care benefits but other fear that the State faces unaffordable costs. A collision course! 

Chicago Fed's Moskow Warns of Public Headaches (February 28, 2006)

Michael Moskow, president of the Chicago Federal Reserve Bank, stated that declining populations and a growing proportion of older persons pressures the public pension systems throughout the region. "As a result, state and local pensions in the Midwest are much like the legacy costs that domestic automakers face," he said, according to the prepared text of his speech. "They are a financial burden that may hurt the competitiveness of these states and cities in the future." Moskow wants the public pension systems that currently cover 90% of public employees in the region to dump these obligations as have the private firms. These public pensions represent deferred wages and the State has guaranteed them. Will the poor investment and planning of public officials condemn public workers in the Midwest to poverty in old age? 

SAVER Summit Attendees Urged to Address 'Often Overlooked' Issues (February 28, 2006)
"People are often surprised to learn that 58 percent of the American workforce will depend solely on Social Security or their own personal savings to fund their retirement," says Larry Mitchell from the American Corn Growers Association, one of the delegates to the SAVER summit. SAVER urges the US Government to create incentive measures to persuade workers to save money for their retirement if they don't participate in employer-based retirement plans. It's not just about saving, say the summit attendees; it is also about knowing how to save.

Increasingly, the Home Is Paying for Retirement (February 24, 2006)
Reverse mortgages, a way to borrow against the value of your home, are a growing trend among seniors trying shore up losses from pension plans and the stock market. Many seniors are turning to their homes to pay for their retirement. The reverse mortgage is a loan from the mortgage company, usually a portion of the value of the home, which is paid back with interest when the owner sells or dies. A new Federal survey found that over 95% of those Americans in the 55 to 64 age bracket only have 1.5 times their median annual earnings saved, meaning many might borrow on their homes. Experts say that retirees should have savings amounting to five times their annual income to finance their retirement years.

Playing With Pension Reform (February 23, 2006)
Many US companies are abandoning their traditional employer-provided pension funds. Rather than hanging their hands in shame at such actions, executives of bankrupt US national airlines are lobbying Congress for exemptions from funding their pensions. If adopted, this policy could rapidly spread to other employers and the workers would be big losers. Another plan would make it easier for companies to hide their pension troubles. Will this Congress stand firmly behind the workers who have lost much of their deferred retirement wages? Or will it cave in to the wishes of the corporations that bankroll their political campaigns? 

Public Pensions Press State Budgets (February 23, 2006)
The Standard and Poor Corp. warns that the public-employee pensions are starting to cause state budgets to run dry. The state pension plans fell short $284 billion in 2004. Due to various reasons, funding levels fell and there is a good chance that it will fall some more. With the declining pension fund assets and the rising liability which in turn will result in the contribution of more money, the state and local government will need to set aside some funds to pay for their retirees' health benefits. 

The Earnings Suspense File: Social Security's "Secret Stash" (February 22, 2006) 

As the technology age marches on, identity theft continues. Misused or stolen Social Security Numbers and their subsequent earnings go into the Social Security Administration's Earning Suspense File. This account holds almost $520 billion and continues to increase to the tune of $6 billion each year. As critics and supporters of Social Security debate the newest proposals to fix its faults, the Earning Suspense File continues to exist quietly with little oversight. 

Put More Stock in Retirement (February 21, 2006)
With more and more aging baby boomers looking forward to retirement, many are re-focusing their energies on their retirement strategies. One part of most retirement strategies is investing a certain amount of money in stocks, analysts say around 30 % of your portfolio. Money Magazine urges retirees to consider a higher percentage-start off with 40 to 60 percent in stocks. The advantage of having a portion of your retirement invested in stocks is that the higher returns of stocks allow you to maintain your savings at a higher level. The goal for retirees should be to find the correct balance of stocks and savings to have a comfortable retirement. 

Boehner's election seen as boosting pension reform (February 21, 2006)
As House Majority Leader John Boehner settles into his new leadership position this spring, pension reform continues to be one of his top priorities.  Many analysts consider pension reform to be one of Boehner's top priorities. Boehner's approach is to, "to walk a fine line between those who want suffocating pension rules and those favoring the status quo, which has led to huge pension underfunding."  Hopefully Boehner and his fellow legislators can strike a fair deal for all parties concerned.

Automatic IRAs -- a Quick Fix for Workers Without Pensions? (February 19, 2006)
Baby Boomers face a startling reality in 2005: Many of the defined pension plans they relied on might not be around when they retire. The trend of companies ditching or converting their pension plans to programs that provide less security caught on in the business world during 2005. Even more worrisome are reports that some 71 million Americans will be relying solely on Social Security as they enter retirement. One solution, offered by John and J. Mark Iwry of the Brookings Institute, is to create automatic IRA's. The details of the plan are very simple because companies already withhold wages for taxes and this would just be another deduction from the workers check.

Bush Seeks to End Retirement Penalty for Part-Time Service (February 13, 2006)
As part of his proposed Federal Retirement Improvement Act, President Bush wants to spend over $85 million on federal retiree initiatives over the next 10 years. They include removing penalties on annuities for federal workers who transition from full to part time work status and increasing the amount workers can contribute to their Thrift Savings Plan from cash bonuses. 

Bush Seeks Upgrade of Retirement Benefits Processing (February 10, 2006)

President Bush's new 2007 budget proposal includes almost 27 million dollars to modernize the federal retirement system. The money that Bush has proposed to spend on modernizing the system will attempt to improve the speed and accuracy in processing claims. Additionally the funds will go toward transferring paper files to electronic records. The Office of Personnel Management that manages the system believes that the funding will allow them to calculate benefits for new retirees in five days or less. Wait and see! 

Pension Peril: Securing Income for life (February 9, 2006)

In the Ice Age of defined pension benefits, it's important for workers to have a plan to make up the losses in retirement income that they will suffer due to the switch to a 401 (k). This article details how a worker can try to reduce those losses by adopting different investment ideas. It also takes into account important elements: marital status, sex and your employer. 

Benefits Go the Way of Pensions (February 9, 2006)

General Motors was often called "Generous Motors" because of their excellent benefits package. But with pricier health-costs and stricter accounting rules that make companies report their earnings more honestly, it makes it more difficult for companies to live up to their social or union contracts with retirees. Today GM has capped its contribution to healthcare plans for nonunion retirees and does not even offer retirement health insurance for those hired after January 1, 1993. Companies that still do offer health insurance are trimming plans in many ways to cut costs by requiring higher premiums, or increasing co-pays and deductibles. 

GM's Decision to Cut Pensions Accelerates Broad Corporate Shift (February 8, 2006)
GM has stopped offering retiree health coverage to salaried workers hired after January 1, 1993 , and capped health-care spending for the year 2006 which will save the company $900 million a year. They will also revise pension benefits to "reduce the financial retiree responsibility." Many other firms are following in GM's footsteps including Nissan Motor Co., International Business Machines, Verizon Communications, and Circuit City stores. Among companies with more than 200 employees, only one-third offer retiree health benefits. Experts say that the reason for these changes to pension schemes is not solely the fault of the company. The pension systems were created years ago when health-care was cheaper and human life-spans were not as long as they are today. Will the companies get behind a universal health care program for the US to protect their retirees? Or just continue to complain that their retirees are living too long? 

GM Plans to Slash Dividend, Sets Other Cost- Cutting Moves (February 7, 2006)
In efforts to win a future for the company, GM has decided to make more changes to compete with other auto manufacturers. Not only are executive salaries cut, so are the health benefits for salaried retirees in order to reduce GM's yearly cash payouts. The board is also reevaluating and changing the pension plans for salaried US workers. By 2007 GM hopes to cap contributions to salaried retiree health-care which is predicted to reduce its liability by $4.8 billion and cut GM's annual retiree-health-care expenses by $900 million a year. A defined-contribution or cash balance plan might be on the agenda to compensate for these cuts.

Elderly Iowans May Get Tax Cuts (February 6, 2006)
The elderly of Iowa may be in for some good news.. The Republican House voted unanimously for a $280 million tax cut for the elderly along with a five year phase out of the state tax on Social Security and pension income. At issue is whether or not the State can make this tax cut and also increase school funding up to 6%. Both measures have great support.

US Moves to Seize Pension Fund in Dispute with Renco (February 3, 2006)
The Remco case addresses a number of important pension issues regarding the responsibility of corporate parent companies to their bankrupt satellite companies. In a complicated legal case the Pension Benefit Guaranty Corporation, the United States Federal insurer, filed a motion in bankruptcy court to seize the pension fund of WCI steel in a dispute with its corporate parent, Renco Group. The US government filed the motion in an attempt to require the Renco Group, the corporate parent of WCI steel, to fulfill the now bankrupt WCI's obligations.  In a stipulation filed in bankruptcy court in Ohio, Renco Group acknowledged its cash assets would cover the 2,000 workers of WCI steel.

Feds Take Over Rhodes ' Pensions (February 2, 2006)
The United States federal insurer, The Pension Benefit Guaranty Corp, announced recently that it had taken over the pensions of almost 2,000 former employees of the bankrupt Rhodes Inc. Rhodes Inc. operated at chain of retail furniture stores and was based in Atlanta. PCBG announced that it would become the trustee of Rhodes after the company announced that it had sold all its substantial assets.  It found no purchaser to assume responsibility for the pension fund.

Pension Board to Trim UAL Stake But Still to Pay Most Legacy Costs (February 1, 2006)
The Pension Benefit Guaranty Corp has announced it will soon sell about half of its 20% stake in UAL Corp (which is the parent of United Airlines). After reorganizing, the UAL will start trading its shares in the stock market on Thursday. With some stock sales and other funds the agency is receiving from its shareholders, the agency will have recovered more than 70% of each dollar that they had lost. A plan is still being worked out so that the agency will not have to dump the shares into the open market all at once which would risk a potential price drop. PBGC will continue to pay most of UAL workers and retirees a full pension but some will be taking major cuts also because PBGC caps its maximum payouts. 

Northwest Gets OK to Freeze Pilot Pensions" (February 1, 2006)
The last major airline to provide defined pension benefit plans to its workers shed its responsibility in bankruptcy court today. As Northwest Air continues to restructure its company in bankruptcy court, the switch to a defined contribution plans was the next step in attempting to decrease overhead. The announcement comes after a January 12 agreement with the Pilots union that agreed to switch to a contribution plan to save their jobs. "Freezing the plan is the lesser of two really bad evils," said David Field, Americas editor of Airline Business, "including abandoning the plan like several of NWA's competitors have done."

Does Working Longer Make People Healthier and Happier? (February 2006)
With an increase in life expectancy, the declining role of Social Security benefits, the gradual transition to 401 (k) plans, and the low levels of personal savings, will the older population survive financially if they retire at age 60? Read this report to see the analysis done on the physical and psychological state of working older people.

Congress Is Split on 401(k) Advisors (January 31, 2006)
With the freezing and termination of company pensions, the primary retirement source for millions of Americans is the 401(k) plan. The Senate has decided that it will continue to ban direct advice from firms to employees to avoid employers favoring their own funds. However the Senate does urge companies to hire a separate neutral party to advise employees where to invest their money in hopes that there will be less legal problems. This new bill will state that "if companies hire advisors who are independent and qualified, and who are properly monitored, sponsors can't be held liable for the quality of the investment advice." AARP is opposed to this arrangement citing the flood of recent corporate scandals. 

AARP Gives Free Aid to Elderly Taxpayers (January 30, 2006)
The AARP offers the country's largest free tax counseling and preparation for tax paying seniors. Mostly older women seek help because their now deceased husbands took care of the finances. Often the widows don't know how to file taxes. The volunteers will do a paper return as well as file an electronic form. Among the volunteers, Diane Flook is a 21 year old senior at Corning, New York, studying income tax preparation. She enjoys working with older persons and offering them help. Not only can she see that they depend on her but she also sees their joy in interacting with younger people. 

The Golden Years: Travels, Hobbies and a New Job, Too (January 29, 2006)
Many Americans look forward to retirement as their golden years: relaxation, travel and more time with the family. But it seems that every day another corporation is freezing its pension plans and replacing it with a less secure retirement package. One alternative for many retirees is to head back to work to subsidize their now un-secure retirement. A study compiled by the Labor Bureau found that one-fourth of workers in the 65-74 age bracket are working compared to one-sixth two decades earlier. Instead of taking that Caribbean cruise, many retirees have to work to support their "retirement."

Pension Worry Piles Pressure on American Consumers (January 28, 2006)
As the first baby boomers reach retirement age this year, the safety of their pension plans worries them. With major corporations shedding defined pension plans and switching to 401(k) contribution systems, the security that many corporate workers once had seems to be vanishing. A study from the Pension Benefit Guaranty Corporation, the federal insurer, found that 1 in 10 defined pension plans has now been frozen. Sadly, corporations are switching to 401 (k) contribution plans that will require a much greater savings (about 12%) to match the lost pensions. And, 401 (k)'s contain a lot more risk for workers to manage during their employed years. 

Congress Seeks to Rein in Special Executive Pensions (January 25, 2006)
Congress is working on a new bill to block top executives from receiving fat retirement packages when the company and its employees are financially unstable. This bill will forbid companies from setting aside special pension benefits for the corporate brass if pensions for other employees cannot be properly funded. Why should there be a double standard? Those who do not abide by this new law will face tax penalties. This bill is expected to be sent to President Bush before mid-April for the final approval. Officials are keeping in mind an unintentional drawback that this bill could cause companies and all employees, i.e., it could mean terminating the defined-benefit plan altogether.

More Companies Drop Pensions (January 24, 2006)
In today's society, we can't rely on income support in old age to support us. With bankrupt airline companies and even healthy companies cutting away pensions for their employees, the new generation is swiftly moving towards a "self-funded" retirement. Workers need to become educated with their 401(k)'s and other sources to saving for retirement. Experts offer some good advice in investing in one's 401(k) savings and suggest other readings for more detailed information on how to go about investing in the most beneficial way. In many ways, companies have robbed their workers of their deferred wages set aside in retirement funds. But no company executives are going to jail for this hold-up.

Tension Over Pensions: Can They be Saved? (January 23, 2006)
With the continuing trend of companies freezing and/or terminating their pension schemes and replacing them with a contribution to each individual's 401(k) plans, what will happen to the nation's retirees? With the social security pension value decreasing, Medicare premiums and retirement age rising, the bottom third of pensioners will be poor. In order to save up for an adequate retirement income, workers need to contribute 12% of their pay over their entire career. Edward Wolff, an economist at New York University, suggests reducing the risk of poverty with a national "portable" plan so that employees can take their savings from job to job. 

Many Americans Are Unprepared For the Costs of Aging, Poll Shows (January 23, 2006)
A recent survey of almost 3,000 people shows that 39% of US senior citizens don't expect to be prepared financially for potential long-term care. The great majority has not made any saving or long-term plan as a preparation for their care in old age. More, two out of five US adults plan to receive the help they might need from their siblings. "This indicates an element of denial," says Anne Aldrich, senior vice president at Harris Interactive.

With Pensions Waning, Workers Save. Is It Enough? (January 19, 2006)
As companies freeze or terminate their pension programs, experts encourage workers to start saving for their retirement funds. Many young workers are not saving. Among the few that are, they are making poor choices. Experts suggest investing in a "life-cycle fund." These funds hold mutual fund assets containing a number of stocks and bonds matched to the worker's age. Today workers don't have to participate in retirement saving plans. But experts say investments should be mandatory due to the very low savings rate in the US where 65% have lifetime savings of less than $50,000. 

Changing Paradigm for Pensions (January 19, 2006)
As large companies across the US drop their pensions, public pensions have come under attack. While New York State's public schools are in "excellent financial shape," many want to replace the defined benefit pension system with private savings plans that require little or no contributions from the employer. Many educators traded low wages for their retirement security. Experts say that women, small school districts, and math and science classrooms will be affected most if pensions are discontinued. And it will be hard to attract new teachers. Already New York States does not have an adequate number of teachers. About 30 percent of K-12 teachers will retire over the next 10 years. Thankfully for employees of New York State only, there is a clause in the state constitution that says, once a pension is implemented, it cannot be reduced. The main question for future employees remains: Is a secure retirement a vanishing dream?

401(k)s Won't Stop the Impoverishment of Retirees (January 18, 2006)
As powerful companies end defined pension plans, many major corporations pretend that they've found an alternative for their workers. The most popular: a 401(k) plans. This Labor Research Association article discusses some of the major problems with 401(k) plans for workers. Most discouraging to workers is LRA's conclusion that 401(k) plans are much more risky and less secure than defined pension benefits. 

CEOs Cut Pensions, Pad Their Own (January 18, 2006)
Recently IBM and Alcoa announced that they could no longer offer pensions to new hires and would freeze all other defined pension plans. Both companies planned instead to divert money to 401(k) plans that are less generous than the defined pension plans. While each company cuts pension costs to benefit their shareholders, the management and CEO's are giving themselves a pat on the back with large increases in their pay packages. This article illustrates how CEO's continue to pad their packages while cutting the average workers' retirement plans. Call that fair?

Pensions for Civil Servants Race Higher: Haves vs. Have-Nots as Private Plans Die (January 18, 2006)
The federal, state and local governments have continued to improve public pensions, long considered the most secure and reliable. As major private companies freeze defined pension plans and sometimes cut them all together, the public system continues to increase the security of their plans. One study found that average benefits for state and local workers grew by almost 37% from 2000-2004. While these plans make it easier for public servants to retire, some worry that about growing inequity between the public and private sector retirees. 

Retired Black Cops Pressure Georgia for Pension Equity (January 16, 2006)
Howard Baugh, 81 years old, is a retired black police officer of Atlanta, Georgia. He grew up next door to Martin Luther King, Jr. and recalls times spent with King's family. Baugh is in the process of fighting the State of Georgia for the same pension benefits as his white co-workers of that era. Because the white officers were able to join the state-backed supplemental retirement fund, they now receive $700 more than what Baugh receives each month. When Baugh and other fellow black officers did apply, they received letters of acceptance but soon after a second letter revoking their statement stating that they are not taking any more applicants at the time or even just blatantly stating that they were an "all white organization."

When the Nest Egg Cracks: Financial Consequence of Health Problems, Marital Status Changes, and Job Layoffs at Older Ages (January 2006)
Read this research study from the Center for Retirement Research at Boston College which examines the different issues that endanger financial security for older people. Poor health, losing the ability to take care of oneself, and losing a spouse are a few issues that are examined closely. Citizens and the government need to prepare for these possibilities.


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