Private Pension Issues
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
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.
Danger in a One-Basket Nest Egg Prompts a Call to Limit Stock (December 19, 2001)
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.
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.
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.
Receive Congrssional Support In Quest to Overhaul Retirement System
(November 30, 2001)
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.
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.
Accounts Are Losing Money for the First Time (July 9, 2001)
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.
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.
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
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?
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
the Facts on Elder Care (November 30, 2000)
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
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.
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
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
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.
Your Pension Leaking? (July-August, 1999)
This article in the AARP Bulletin shows how cash-balance pensions
can reduce veteran employees' retirement benefits.
Fund Agency Is Being Scrutinized
This article from The New York Times discusses major problems with
the pension fund agency
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.
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.
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.
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)
Private Pension Issues Archives: 2002
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