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The Fiasco in San Jose…Thank you Chuck Reed!
Former San Jose Mayor Chuck Reed led a misguided attempt to gut the retirement security of public employees there. His efforts were rejected by the courts. https://protectpensions.org/2016/03/10/chuck-reed-san-jose-fiasco-measure-b/
Targeting Pensions and Retirement Savings
A cautionary tale of an Oregon public schools retiree who hired a financial advisor who talked him into cashing out the guaranteed pension and turning the resulting $729,000 into an investment account in his Iris Capital firm. You can guess where the story goes from here… http://www.huffingtonpost.com/james-w-russell/targeting-pensions-and-retirement-savings_b_9189690.html
Column Sums Up Analysis of 401(k) Accounts Falling Woefully Short
LA Times columnist Michael Hiltzik describes a report from the Economic Policy Institute depicting in a series of charts and graphs how 401(k)-type retirement accounts have failed most American workers. Hiltzik includes six of the charts showing how the shift away from defined benefit pensions to 401(k) savings accounts leaves most older workers with meager resources as they face living longer in retirement. Read the LA Times article here: http://www.latimes.com/business/hiltzik/la-fi-mh-six-charts-on-the-retirement-crisis-20160302-column.html. The full report by Economist Monique Morrissey is available here: http://www.epi.org/publication/retirement-in-america/
Report Strongly Indicates 401(k) Investment Returns Lag Due to Fees
In a report published in December, 2015 the Center for Retirement Research studied defined benefit versus defined contribution pension plans from 1990-2012 and concluded that DB plans out-performed 401(k) plans by 0.7 % in investment returns. The report also cited data indicating returns for traditional IRAs were about 1% lower than the 401(k)s. Investment fees were tagged as the main culprit lowering returns. In the conclusion, the report says: “Forgoing returns over long time periods means that assets at retirement will be sharply reduced…” http://crr.bc.edu/wp-content/uploads/2015/12/IB_15-21.pdf
Union Backs Pooled IRA Option for New State Plan
As a new state board, Secure Choice, gets ready to recommend a state-run savings plan later this month that could automatically enroll most small business employees, a large union, Service Employees International Union, is pushing an option that would eventually offset investment losses. Read more: https://calpensions.com/2016/03/07/union-backs-pooled-ira-option-for-new-state-plan/