Want to support Global Action on Aging?

Click below:


Private Pension Issues

Archives: 2001

Chile's Experience with Social Security Privatization: A Model for the United States or a Danger Sign?
In 1981, Chile’s military dictatorship privatized the oldest social insurance program in the Americas. Workers are required to redirect all their Social Security contributions to personal pension accounts. But this system has had bad consequences as reported in this article by the Century Foundation.

Florida Pension Plan to File for Lead Role in Enron Suit (December 21, 2001)

After loosing about $306 million in value after Enron declared bankruptcy, the Florida Retirement System is now filing a lawsuit against them. They have been the first pension plans to do so, but they are expecting others to join in the next couple of days.

The Danger in a One-Basket Nest Egg Prompts a Call to Limit Stock (December 19, 2001)
 Employee rights organizations and lawmakers are calling for swift changes in regulations covering employee investments in company stock. Recent scandals around the Enron bankruptcy have shown that employees invested far too much money in the company stock and now have nothing.

Senate Hearing on Enron Meltdown (December 19, 2001) 
After years of loyal service Enron’s workers are now faced with their life savings evaporated, since the company banned them from selling Enron shares from retirement accounts for 10 days. Senator Boxer and Sen. Jon Corzine, D-N.J., proposed a bill Tuesday aimed at preventing future Enron-style meltdowns for employees' retirement savings, restricting to 20 percent the amount an employee could have in any one stock in their accounts. With a 90-day limit on the period employers can block workers from selling stock contributed by the company.

Enron Workers Testify On Lost Savings (December 18, 2001)
Enron workers complained that the firm has prevented them from selling Enron stocks in retirement funds longer then stated by the company. Accounts were frozen for a month or more, while Enron claimed accounts were frozen only 10 days.

Railroads Receive Congrssional Support In Quest to Overhaul Retirement System (November 30, 2001)
The Senate voted a bill to overhaul the decades-old railroad retirement system. It will permit some of the funds to be invested in private securities such as stocks and bonds. The bill raised many reactions from the railroads unions and employees. Railroad retirement beneficiaries are now waiting for its consequences.

Creating a Nest Egg (November 26, 2001)
This article published by The Wall Street Journal, explains how this year’s big tax-law changes includes a mass of provisions intended to give late starters Americans the courage to save up for their golden years, while also benefiting individuals of all ages. 

401(k) Accounts Are Losing Money for the First Time (July 9, 2001)
Disappointing news for 401(k) holders.  According to the New York Times, this retirement program has lost money.  Last year alone, the average account lost approximately five thousand dollars.  Clearly, the individual workers’ choices among 401(k)’s does not assure them the retirement funds they need.  However, the brokerage houses and others who market these funds have plenty of commissions to line their pockets!  The spread risk of Social Security insurance is a much sounder approach to a real income in old age. 

Health Laws That Can Save You Money - Or Your Life (June 19, 2001)
This article, published in The Washington Post, points out the advantages of knowing the laws concerning health care covered by insurance companies. Actually, state laws contain “mandatory benefits,” which compel insurance companies to cover systematically some illnesses and conditions. But these state mandates aren’t applicable to everyone and vary widely from one state to another.

Retiring on a Reverse Plan (June 9, 2001)
This article, published in The Washington Post, notices that another source of income is available to seniors: the reverse mortgage. Since standards have been set up ten years ago with the “shared appreciation” feature, this financial planning tool is more and more commonly accepted and used by people 62 and older who are house-rich and cash-poor. The reasons why senior citizens are accepting reverse mortgage vary from covering the expenses due to prescription drugs to giving it to family members.

OPM Puts Finishing Touches on Long-Term Care (June 7, 2001)
This article, taken from The Washington Post, is about the issue of medical underwriting, which is currently under study by the Office of Personnel Management. This one plans to provide a long-term care insurance to employees and retirees. In order to limit financial risk different approaches are being considered regarding the concerned category. In fact, this coverage aims at being the broadest one and the best buy.

New York Life to Buy Union Pension Fund Manager (June 6, 2001)
This article refers to one example of the current trend regarding asset management companies. Large companies are buying smaller ones with expecting economies of scale and greater market share as baby boomers save money for retirement. However, such consolidation may reduce competition among firms and permit companies to charge more and get higher profits.  Will retirees who invest their savings have to pay more to such monopolized companies?

More Queries on Insurer's Handling of Its Pensions (May 30, 2001)
This article, taken from The New York Times, reports a case of conflict of interest at the New York Life Insurance Company. This situation shows how complicated it can be for financial service companies to run their own retirement plans. In fact, the federal law authorizes them to invest pension assets in their own products, but only for the benefit of workers or retirees. An employee lawsuit questions whether NY Life complied with the law.

Tax Bill Expands Limits on Retirement Savings (May 28, 2001)
This article, taken from The New York Times, explains the different effects of the tax cut bill passed on Saturday by the US Congress. Its purpose is to persuade in particular more small employers to adopt retirement plans by raising the maximum savings and also the maximum income. But that doesn’t cover up the fact that this increase will only catch up with inflation. Moreover, employers will be tempted to lower the percentage of workers’ pay they contribute, so that employees won’t be the primary beneficiaries of this reform.

Annuities Aren't for Everyone (May 16, 2001)
This article, taken from The New York Times, points out the fact that variable annuities may only help a category of the population as retirement savings programs. In fact, those complex mutual funds wrapped in an insurance contract necessitate the assistance of a fair professional to be well understood, because many people who are being sold annuities shouldn’t have them.

Betting the Ranch (May 16, 2001)
This article, taken from The Time Magazine, is focused on a recent type of policy to cover extended care, which is called long-term-care insurance (LTC policies). Although individuals, employers and even soon the Federal Government are showing a growing interest in those policies, buying them at the right time remains a complex and tricky choice since it requires a prediction about future needs.

No Time to Put Your Feet Up as Retirement Comes in Stages (April 15, 2001)
This article, published in The New York Times, reports the latest practice in companies called "phased retirement". What does it actually mean for workers? Accruing for one's own pension but in fact it puts a strain on the amount available when people get fully retired.

As Savings Go Up, Worries Go Down (A Little) (March 21, 2001)
This article reports the ongoing increase in savings for retirement over the past few years. More and more Americans are now becoming aware that Social Security may not be enough to sustain their way of living. Some of them have invested in the stock market expecting benefits, but even with the recent economic slowdown are still hopeful. The New York Times analyzes this new trend.

New York Life Sued Over Benefits (February 28, 2001)
This article, published in The New York Times, unveils the suit that New York Life Insurance Co. is currently facing. The accusations range from mismanaging pension funds to unfairly dismissing employees.

Reversing Decades-Long Trend, Americans Retiring Later in Life (February 25, 2001)
Americans are retiring later in life than they did just a few decades ago. The percentage of people over 65 who still work has been rising since the mid-1990's. The article claims that people fell insecure about their retirement because companies are cutting pensions and retiree medical coverage. The New York Times reports.

Elderly Worry as Insurers Cut Medicare Plans in Connecticut (December 26, 2000)
This article, published in The New York Times, shows that many health organizations want to get out of the Medicare Market because they think federal reimbursement is not profitable. The other companies, which stay into the Medicare HMO, are raising their rates. As a matter of fact, thousands of persons are forced to change health insurance or return to traditional Medicare, which does not cover costly prescriptions.

Firm Agrees to Pay State $1.2 Million in Bribe Case (December 1, 2000)
This article from The New York Times is about a firm, which agreed for the first time to pay a cash settlement after having allegedly mismanaged pension fund investments. This settlement, worth $ 1.2 billion, might be the first one of a long row.

Facing the Facts on Elder Care (November 30, 2000)
This article, extracted from Business Week, shows that many people do not consider looking after a frail relative when they are planning their retirement. But it's crucial to consider the possibility of caring for incapacitated elderly person. The article tries to give some advice on the subject.

Pensions lobby attacks changes (November 30, 2000)
This article taken from The Guardian deals with the forthcoming introduction of new accounting rules for company pensions, more particularly concerning the disclosure of their pension schemes. Though these new rules won’t be implemented before 2003, it will urge companies to phase in remarks in their annual report as soon as June.

Sipp freedom: run your own pension (October,29 2000)
A new dawn for pension plans has started with the arrival of online plans, such as SIPP (Self-Invested Personal Pensions). Though mainly affordable by the upper-class, the new SIPP online strives to appeal to a wider public. The question is: will that be successful? The  Guardian reports.

Pension partisans fight fight for retirement security (September 20, 2000)
Christine Dugas in this article taken from USA Today reports the numerous examples of actions led by pension partisans struggling for a greater retirement security. She also assesses America’s situation regarding elderly persons and gives information about different movements of action.

Pension revolt catches fire. Longtime employees say they want their "just due" (September 2000)
This article from the AARP Bulletin conveys how activists from some of the nation's largest companies successfully rally nationwide employees and retirees to fight against pension cuts.

Is Your Pension Leaking? (July-August, 1999)
This article in the AARP Bulletin shows how cash-balance pensions can reduce veteran employees' retirement benefits.

Pension Fund Agency Is Being Scrutinized
This article from The New York Times discusses major problems with the pension fund agency

Women are More Likely Than Men to Face Poverty in Retirement (July 16, 1998)
This editorial taken from The Boston Sunday Globe by a fellow at the Radcliffe Public Policy Institute argues that women are at greater risk of poverty after retirement.

Playing the Stock Market Lottos (January 14, 1997)
Op-Ed piece by an editor of Fortune magazine argues that playing the stock market is a dangerous way to plan for retirement, since high-risk investing can lead to serious disappointment or worse.

Women and Pensions (August 18, 1996)
The following editorial taken from The Boston Sunday Globe argues that women are at greater risk of poverty at older age.

Who's Been Eating My Nestegg? (November 26, 1996)
This article from The New York Times shows how companies steal their workers' benefit funds, particularly pensions and 401(k) savings plans.

Private Pension Issues Archives: 2002 | 2001 | 2000