Posted on March 31, 2006 by Jason
The New York Times, March 31st, 2006
The board that writes accounting rules for American business is proposing a
new method of reporting pension obligations that is likely to show that many
companies have a lot more debt than was obvious before.
In some cases, particularly at old industrial companies like automakers, the
newly disclosed obligations are likely to be so large that they will wipe out
the net worth of the company.
The panel, the Financial Accounting Standards Board, said the new method,
which it plans to issue today for public comment, would address a widespread
complaint about the current pension accounting method: that it exposes
shareholders and employees to billions of dollars in risks that they cannot
easily see or evaluate. The new accounting rule would also apply to retirees’
health plans and other benefits.
A member of the accounting board, George Batavick, said, “We took on this
project because the current accounting standards just don’t provide complete
information about these obligations.”
Read more…
Posted on March 22, 2006 by Jason
Auto giant to pay for retirement incentives to 113,000 factory workers
MSNBC, March 22nd, 2006
General Motors Corp. and auto parts supplier Delphi Corp. announced deals with
the United Auto Workers on Wednesday that would help the struggling companies
cut labor costs by offering early-retirement buyouts to 113,000 U.S. hourly
workers.
The deal comes at a critical time
for GM, which increased by $2 billion its reported 2005 loss to $10.6 billion
last week. The world’s largest automaker has been losing U.S. market share but
is saddled with labor agreements that make it difficult to close plants or cut
workers. The plan also is crucial for Delphi, the largest U.S. auto parts
supplier, which is reorganizing in bankruptcy court after filing for Chapter 11
protection in October.
About 100,000 GM workers will be
eligible for payouts of between $35,000 and $140,000 depending on their years of
service. At Delphi, up to 5,000 workers will be eligible to return to GM,
Delphi’s former parent company, while 13,000 U.S. hourly workers will be
eligible for a lump sum payment of up to $35,000 to retire. Delphi has about
34,000 U.S. hourly workers overall.
Read more…
Posted on March 22, 2006 by Jason
SFGate.com, March 12th, 2006
We would like to take this opportunity to warn all of our viewers of
the dangers of various scams such as the one described in this
article. Always be careful when giving out your personal
information to anyone.
Alot of junk mail masquerades as official documents. But a recent mailing
from something called the National Data Research Center really takes the prize.
California seniors who are being targeted by the apparent scam should be
especially vigilant.
“2006 Government Regulated Senior Program,” the mailer says in big letters.
And in smaller letters: “New Government Program Protects Seniors.”
The return address is given as 2020 Pennsylvania Ave. NW, Washington DC,
which is just a few blocks from the White House.
Read more…
Posted on March 10, 2006 by Steve
Looking to the ’60s generation for lessons on how to plan
CNN, February 15th, 2006
In the 1960s and ’70s they burned their bras and draft cards, marched on
Washington, founded Earth Day and vowed never to trust anyone over the age of
30.
Today, the baby boomers are doing the limbo, dancing wildly and waving their
arms in the air to the unintelligible lyrics of “Louie, Louie.”
At least that’s what they’re doing in Portland, Oregon, at the Baby Boomers’
Social Club Friday night dance at the Red Lion Hotel.
“We have a live band once a month, and we do all sorts of different dance
styles,” says Melanie Pedersen, co-founder with Julie Dahlman of the Baby
Boomers’ Social Club.
Read more…
Posted on March 10, 2006 by Steve
The Washington Post, March 8th, 2006
The Treasury Department has started drawing from the civil service pension
fund to avoid hitting the $8.2 trillion national debt limit. The move to tap the
pension fund follows last month’s decision to suspend investments in a
retirement savings plan held by government employees.
In a letter to Congress this week, Treasury Secretary John W. Snow
said he would rely on the Civil Service Retirement and Disability Fund to avoid
bumping up against the statutory debt limit. He said the Treasury is suspending
investments and will redeem a portion of the money credited to the fund.
Once Congress raises the debt limit, the Treasury will “restore all due interest
and principal” to the pension fund as soon as possible, Snow said. He made a
similar promise when the Treasury announced that reinvestment of some assets in
the Thrift Savings Plan’s government securities fund, or G Fund, had been
suspended.
Read more…
Posted on March 8, 2006 by Steve
The McKinsley Quarterly, March 8th, 2006
Consumers are bearing more retirement-related risk than
they have at any time since the creation of the modern welfare state. Many
employers have already shifted from defined-benefit to defined-contribution
retirement schemes, and public retirement systems are facing an uncertain future
in many countries. The change represents an opportunity for financial
institutions, which can help consumers by offering products that generate income
and manage the risks of retirement, including catastrophes and unexpected
longevity. But these institutions must also retool their advisory forces to
serve retirees and workers more appropriately.
Read more…
Posted on March 8, 2006 by Steve
AARP, March 8th, 2006
Compared with a decade ago, the state of 50+ America seems to have improved,
but AARP’s third annual “report card” on the quality of life of midlife and
older Americans finds that the picture has become less favorable and the outlook
more bleak during the most recent year.
While moderately positive change occurred in more than half of the economic
indicators in the past year, change in the health indicators has been generally
negative. Age 50+ Americans thus appear to be doing better financially, but
feeling worse; other social measures also were more negative than positive.
Read more…
Read the full report.
Posted on March 3, 2006 by Steve
A summit in D.C. considers what can be done to help workers save more for their post-career lives.
CNN, March 1st, 2006
This week in Washington, D.C. government leaders, retirement experts
and financial services executives are meeting to discuss what
employers, lawmakers and workers themselves can do to help Americans be
better prepared for retirement.
Overall, only about 60 percent of workers over 40 who are eligible to
participate in their 401(k)s do, and the number of workers covered by a
defined-benefit pension has steadily declined. Meanwhile, young workers
have the lowest 401(k) participation rates of all workers under 65.
Congress is considering legislation that would encourage all employers
to offer automatic enrollment in 401(k)s and set the default
contribution rate at 3 percent of pay, increasing one percentage point
every year until 6 percent of pay is reached.
The legislation would also encourage companies to offer a 50 percent
matching contribution or contribute 2 percent of pay for all employees
whether they contribute or not.
Of most immediate concern is the status of Baby Boomers, who are next in line to retire.
Read more…
Posted on March 3, 2006 by Steve
The New York Times, February 24th, 2006
America’s largest companies expect the federal government to pay them about
$4 billion over the next four years to help keep their retiree health plans
alive at a time when such benefits are increasingly on the chopping block,
according to a new study by Credit Suisse First Boston.
The money is due to start flowing to employers this month as part of
Medicare’s new prescription drug benefit. When Congress authorized the Medicare
drug benefit, it also agreed to start subsidizing the drug component of
employers’ retiree health plans, to keep them from shifting their retirees into
the government program.
The goal is to save the government money, even after the subsidies, while
giving the retirees a better deal than they might get if they were pushed into
Medicare.
Among the nation’s 500 largest companies, 331 offer retiree health plans.
Read more…
Posted on March 1, 2006 by Steve
Buffalo News, March 1st, 2006
Many older people are resorting to reverse mortgages, but
because of high fees it’s best to wait until you really need the money.
Like any mortgage, a reverser is a loan that uses the property as collateral.
The difference is that the borrower doesn’t have to make monthly loan payments
or have an income to qualify, although he or she must be at least 62.
Instead, the debt and accumulated interest charges are paid off only when the
property is sold – even if that’s not until after the borrower has died.
The loan can be taken as a lump sum, line of credit or a fixed monthly income
that can continue for the borrower’s lifetime, even if the total received
eventually exceeds the property’s value. However the money is taken, it is
tax-free, since it is a loan, not income.
Read more…
