Good News On Pensions?
According to the National Public Pension Coalition, “The so-called pension crisis is a myth promoted by people who are either hostile to public employees, have a financial interest in moving from pensions to 401(k)s, or both. All of the evidence indicates that the claims of these doomsayers are untrue and most of their predictions have been proven wrong. The real pension crisis in the United States is the lack of pensions by most working people. Many Americans are at risk of falling behind their standard of living in retirement. The move away from pensions to 401(k)s has made this worse, not better. Next week we will examine another false claim peddled by those pushing the pension crisis narrative.” Read the entire article at www.protectpensions.org
Some Public Funds Doing Well
According to a recent report in Pension and Investment, the Idaho Public Employee Retirement System, returned a gross 12.7% in the fiscal year according to Robert Maynard, chief investment officer for the system. “The $16.4 billion pension fund’s gross return fell slightly short of its 13% benchmark. Mr. Maynard said the return net of fees was 12.4%. By asset class, global equity had the best return, with 23%, followed by emerging markets equity, 22.9%; international equity, 20.8%; domestic equity, 15.5%; private equity, 12.3%; private real estate, 10.2%; real estate investment trusts, 0.1%; domestic fixed income, -0.3%; Treasury inflation-protected securities, -0.7%; and Idaho mortgages, -1.1%. All of the asset class figures are gross returns.”
But Then You Hear DB Plans Declining
Employers cut their contributions to workers’ retirements by a quarter from 2001 to 2015, according to a new report by the consulting firm Willis Towers Watson. The biggest driver: the decline of traditional defined-benefit pensions, replaced by stingier, 401(k)-style, defined-contribution plans. Read more at www.bloomberg.com
New Briefing Paper sites State and Local Pension Plan Funding Sputters in FY 2016
Key findings from a new brief out from the Center for Retirement Research at Boston College are:
Then There’s Social Security?
“Considering the massive size of the Social Security program, now paying benefits to over 60 million Americans, some amount of erroneous payments are probably to be expected. But a recent audit by the Inspector General of the Social Security Administration found that about $171 million in duplicate benefits were paid to recipients, and that about $115 million in benefits were mistakenly paid to deceased beneficiaries. These erroneous payments weren’t a result of fraud, but rather due to errors on the part of the SSA. This article by Daniel Lauer of The Capital Research Center explains the details. Click here to read more. You can read the full Inspector General Report at www.oig.ssa.gov
Then The Good News .......
The following statement was issued by Richard Fiesta, Executive Director of the Alliance for Retired Americans, regarding the Trustees report issued recently on the Social Security and Medicare Trust Funds:
“Social Security remains strong and able to meet its obligations well into the future. The 2017 Social Security Trustees report found that Social Security will be able to cover all payouts and expenses until 2034. This is unchanged from last year.
“Each year Social Security becomes a more important part of millions of American families’ retirement plans. We call on Congress to safeguard and expand Social Security benefits, provide a more accurate formula for cost-of-living adjustments, and lift the cap on earnings for the wealthiest Americans.
“In fact, the Trustees found that the Social Security Disability Insurance (SSDI) trust fund will be fully solvent until 2028, five years longer than last year’s report. In light of this data, it makes no sense that the President’s FY 2018 budget seeks to cut Social Security Disability Insurance funding by $63 billion.
“It is also good news that the Medicare Trust Fund for hospital care now has sufficient funds to cover its obligations until 2029, one year longer than projected last year. Congress and the Administration should act now to make changes that will strengthen the program for the future and reduce costs to retirees, such as reining in the prices of prescription drugs. You can see the trustees report at www.ssa.gov
Overview of Medicare Spending
In 2016, spending on Medicare accounted for 15 percent of the federal budget. Medicare accounted for 20 percent of total national health spending in 2015, with 29 percent of spending on retail sales of prescription drugs, 25 percent of spending on hospital care, and 23 percent of spending on physician services. The Keiser Family Foundation has recently issued a brief which includes the most recent historical and projected Medicare spending data published in the 2017 annual report of the Boards of Medicare Trustees from the Centers for Medicare & Medicaid Services (CMS) Office of the Actuary (OACT) and the 2017 Medicare baseline and projections from the Congressional Budget Office (CBO). Read more at www.kff.org
Medicare Cuts for Some?
To save money, the Medicare Payment Advisory Commission has suggested that Congress cut reimbursements for medical treatments covered by Medicare Part B.
For rural patients — and the clinics and hospitals they use — Part B cuts would make a problematic situation even worse. Rural patients tend to be older, poorer, and sicker than those living in urban areas, and rural healthcare providers tend to rely more heavily on reimbursements from public programs. Read more at www.detroitnews.com
Just a reminder — New Medicare cards arriving next year will no longer display Social Security numbers, a move designed to protect against fraud and identity theft.
Identity theft has been on the rise among those age 65 and older. According to the latest figures from the Department of Justice, the number of cases reached 2.6 million in 2014, up a half million incidents in just two years.
Medicare Assistance Available
Did you know that Tri County Council on Aging (TCOA) offers free appointments for those with questions about Medicare?
To make a free appointment with a Medicare/Medicaid Assistance Program (MMAP) Specialist at TCOA, please call 1-800-803-7174. TCOA will begin accepting calls for appointments on August 14th.
Be Prepared for Retirement
Recent information suggests that the average healthy 65-year-old couple today will spend $400,000 or more on medical care in retirement, not including long-term care, which is a whole other expense. In fact, 70% of seniors 65 and over will need long-term care, and if you’re lucky enough to just require an assisted living facility, you’ll spend an estimated $43,539 per year. A nursing home, by contrast, will set you back over $92,000 a year for a private room. Read more at www.fool.com
A recent study by the National Academy of Sciences (NAS) finds that “among male workers born in 1930, those in the bottom lifetime earnings quintile can expect to live to age 77, on average, while male workers in the top quintile can expect to live to 82.”
Editor’s note: June Morse may be contacted at email@example.com or 517-886-9323.
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