Pensions and OPEBS Not Breaking the Bank Everywhere
A new study out from Center for Retirement Research at Boston College indicates that for many states, counties and cities, the “pension benefits “ sky is not falling. Their findings suggest that “pensions, OPEBs (benefits), and debt service appear to be under control in many jurisdictions.” Michigan appears to be in far better shape than many states. According to their assessment, Michigan falls close to the middle (see Figure 5 in their report). You can see their full report at http://crr.bc.edu/
Pensions Provide Stable Source of Revenue to States
This kind of news is always worth repeating . Our state needs to recognize the contributions retirees make to this economy.
A new report from the National Institute on Retirement Security (NIRS) confirms that economic gains attributable to defined benefit (DB) pensions in the U.S. are substantial. Retiree spending of pension benefits in 2014 generated $1.2 trillion in total economic output, supporting some 7.1 million jobs across the U.S. Pension spending also filled government coffers, with retirees paying a total of $190 billion in federal, state and local taxes on their pension benefits and spending 2014. You can read or download the report at www.nirsonline.org
Court Rejects Challenge to Detroit Bankruptcy Pension Cuts
Posted: Oct 03, 2016 12:48 PM EDT
Some retirees sued, saying they deserve the pension that was promised before Detroit filed for bankruptcy in 2013. But in a 2-1 decision Monday, the court said it’s “not a close call.”
The court says Detroit’s emergence from bankruptcy in 2014 was the result of a series of major settlements between the city and creditors and must not be disturbed. Thousands of retirees saw their pensions cut by 4.5 percent.
Voya Financial Inc. has been targeted for “self-dealing” in a new 401(k) lawsuit centering on the provider’s relationship with managed-account provider Financial Engines Inc. Financial Engines was also involved in another recent 401(k) excessive-fee lawsuit brought against Fidelity Investments. Read more at www.investmentnews.com
The average 401(k) plan account balance of workers who participated consistently in 401(k) plan increased significantly over the four-year period ending at year-end of 2014 according to recent data published by Employee Benefit Research Institute (EBRI) and the Investment Company Institute (ICI). Read the Issue Brief at www.ebri.org
According to the Investment Company Institute’s quarterly review of retirement assets, assets of 401(k) plans reached a record $4.86 trillion in the quarter ended June 30, 2016.
Money Market Mutual Fund Changes
By Oct. 14, there could be some major changes to your money market mutual fund accounts based on changes mandated by the U.S. Securities and Exchange Commission (SEC).
The two main changes:
These new rules are a result of the 2008 financial crisis when there was fear of a run on money market funds according to the article in AARP. In order to prevent losses, the U.S. government stepped in to temporarily guarantee the value to investors. Theoretically, the new SEC mandates would help prevent that situation from happening again.
The article states that , “if your brokerage money market account is invested only in securities backed by the U.S. government, such as U.S. Treasury bills or other federal debt, the new rule doesn’t affect you.” (Such funds typically have the word “federal” or “treasury” in their name, but you should confirm this with your brokerage company to make sure.)
However, if your money market fund also invests in other types of debt, such as corporate securities or municipal bonds, it will be affected by the rule change.” Talk to your broker or financial advisor to see if this impacts your investments.
Read more at www.aarp.org.
SSA Cost of Living Increase
Get ready. I don’t want anyone falling off their chair or having heart trouble over this news. But here it comes. — it looks like a possible .02 increase in our Social Security check in 2017. I know, I know. I can see you all drooling over this tremendous influx of money.
Now it may be higher (doubtful) or it may be lower (not sure how it could go lower) - no one is committing at this time. I wonder if we might suggest this kind of increase for the next pay increase for our congresspersons? Just saying.
To add insult to injury, this measly increase could affect millions of Medicare beneficiaries. It’s possible, this miniscule amount could raise the standard monthly Part B premium by $27.20 to $149 for about 3 out of 10 Medicare beneficiaries. Time to put your Congressperson on speed dial.
You can read more about this at www.aarp.org
Retiree Benefits Bulletin
The 2016-2017 retiree insurance bulletin for defined benefit retirees is out. Make sure you review this new information to see if you may be affected by an plan design changes for 2016-17. Be sure and review the “plan design changes” to see if they impact/benefit you in anyway.
A couple of days a month I work at the Breslin Cancer Center Lab at McLaren Greater Lansing and have found they are having difficulty getting a volunteer on Wednesday mornings . The service you would provide is taking blood samples to the lab (upstairs) so they can be processed quickly and the patients can get on with their treatment. For those of you who work on those 10,000 steps this is a great opportunity to do yourself and someone else a great favor. If you have Wednesday mornings available give a call to the Volunteer Office at 517-975-6924 and express your interest in this position. Thanks for listening.
Editor’s note: June Morse may be contacted at email@example.com or 517-886-9323.
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