TIME GOES BY | The War on Elders (and Everybody Else) – Part 1 of ?

by Ronni Bennett

It's been an exhausting few weeks: the earthquake in Japan, a new U.S. military venture in Libya, the ongoing demonstrations and fighting in almost every middle eastern country, the ominous silence from Israel, the crucial protests in Wisconsin, Michigan, Indiana and several other states and the stepped-up budget attacks from government and corporate elites on Social Security and Medicare. Have I left out anything big?

President Obama has decamped to Latin America and Congress is in recess so maybe they can't do too much damage for awhile. It's a good time to step back and survey the big picture.

Since its inception about eight years ago, this blog has been concerned with the lives of elder issues large and small. I try to have some fun with it while lobbying for better treatment of old people, passing on practical information, addressing the difficult issues of illness and mortality and above all, adhering to Time Goes By's bedrock principle: contrary to what western culture generally tells us, there is nothing wrong with being old.

When, in these pages, I have indulged my second passion – politics – I have sometimes felt guilty about straying from the blog's purpose. Now I have come to see that in our politics, everyone of every age is at risk.

We are not supposed to say so (“all men are created equal” and blah, blah, blah) but I am sure you have noticed that there is a class war going on in the United States. Actually, it is global.

Here, it started the moment the New Deal was in place. That era's oligarchy had lost their battle against President Roosevelt's progressive legislation, but by steady increments since then, they have just about won the war now.

Over the years, the elites have used many tactics and strategies to steal all the wealth of the nation. One is the classic, divide and conquer. Let's look at that as it is applied to a crucial elder issue: Social Security.

I noticed it for the umpteenth time yesterday in an Op-Ed in The New York Times by a 24-year-old complaining about the lack of jobs and opportunity for his age group of recent graduates [emphasis is mine]:

”I fear that the young will bear the brunt of the pain:” he wrote, “taxes on workers will be raised and spending on education will be cut while mortgage subsidies and entitlements for the elderly are untouchable.

You and I know, of course, that “untouchable” no longer holds, but so deeply held is this belief among the young (old people benefit to the detriment of youth) that in the context of the young man's entire essay, his elder smackdown hardly stands out.

Why do the young believe this? Because it has been an argument repeated by the right for several decades in their ongoing offensive against Social Security and Medicare – an unrelenting propaganda machine pounding out the notion of “greedy geezers.”

That doesn't absolve a 24-year-old from doing his homework to find out how Social Security actually works but in his defense, colleges have dumbed down their courses for the past two generations and grade inflation has been flagrant for as long. So we cannot expect much critical thinking from our expensively “educated” youth.

The result, however, is an army of young people out to cut grandma's and grandpa's “entitlements” at the behest of an obscenely wealthy elite that is no more interested in the well-being of the young than they are in the current crop of “greedy geezers.”

What the young Op-Ed writer and his cohorts do not realize is that in blaming elders (instead of the wealthy elite) for their economic predicament, they deeply endanger their own futures.

How can it be otherwise? Salaries have been stagnant for more than a decade and there is no reason to believe that will change. Private pensions have been disappearing for even longer.

Any 401(k)s and IRAs that have recovered their value from the 2008 crash will be decimated again in the next crashes – certain to happen once or twice or more again over the next 40 years until the time that young man is ready to retire.

And who is to say he can even contribute to those programs. With low, flat salaries, huge college loans to repay, children to educate at astronomical tuitions, food and energy prices that are sure to rise dramatically in coming years, not to mention the cost of health care that unless we enact Medicare for All (doubtful), will be – already is - beyond the financial reach of most people.

So cuts or elimination of our “entitlements,” which many young people are convinced are necessary, will – if successful - doom their generations to an even more impoverished old age than so many of our own live with now.

The war on elders is also a war on youth - on everybody. More about all this tomorrow.

Many Boomers Report No Savings; Debt, Retirement Challenges - AARP Bulletin

by: Carole Fleck from: AARP Bulletin

The generation that gave rise to Hula-Hoops, Woodstock and Jimi Hendrix is reaching America's traditional retirement age this year woefully unprepared. As the oldest of the boomers turn 65, they face a retirement that is unlikely to go as smoothly as their parents' did.

The lingering pain from the most severe recession since World War II is partly to blame. Many boomers are on the verge of ending their work lives without fully recovering fortunes lost in the housing and stock markets.
That translates to less money to fund their retirement years, which could stretch for three decades given that boomers can expect to live into their 90s.

A poll released Wednesday found that a whopping 25 percent of people ages 46 to 64 say they have no retirement savings — and 26 percent have no personal savings.

The situation is almost as grim for adults 65 and older: 22 percent have no retirement savings and 14 percent have no personal savings, according to the poll of 2,151 adults conducted in November by Harris Interactive.

Full Article

States' Retiree Benefits Underfunded By At Least $1 Trillion

From Medical News Today

State governments' retiree pension and health plans are severely underfunded, according to a new report from the Pew Center on States.
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AoA to Fund Regional Pension Counseling & Information Projects and Pension Counseling Technical Resource & Assistance Centers

The Administration on Aging (AoA) will award grants for up to six Regional Pension Counseling & Information Projects and one Pension Counseling Technical Resource & Assistance Center.

The Federal government’s share for each of the six Pension Counseling & Information Projects will be approximately $200,000 per year for a project period of up to three years. The counseling projects provide individuals who reside, have worked in, or have some other pension or employer connection to the regional service area with a range of services, including drafting administrative pension claims and appeals, and providing representation and support through administrative proceedings; identifying and pursuing pension benefits from clients’ prior employers; responding to basic questions about rights and remedies under all public and private pension systems throughout the service region; operating a region-wide outreach program to ensure public and provider awareness of the Program’s broad focus of assisting individuals with pension and retirement savings problems, regardless of age or income; and targeting certain outreach efforts to those in greatest need.

Eligible applicants include domestic public or private and non-profit entities including state, local and Indian tribal governments, faith-based organizations, community-based organizations, and institutions of higher education, with a proven record of advising and representing individuals who have been denied employer or union-sponsored retirement income benefits, and which have the capacity to deliver services on a regional basis.

The application deadline for this funding opportunity is April 5, 2010.

To access detailed information on this funding opportunity, please go to http://www.aoa.gov/AoARoot/Grants/Funding/docs/2010/FY10_PensionCounselingProj_2_4_10.doc

The Administration on Aging (AoA) will also fund through a cooperative agreement one Technical Resource and Assistance Center (Center). The Federal government’s share will be approximately $425,253 per year for a project period of up to three years. The Center will be structured to support the Pension Counseling and Information Program’s grantees and others and to encourage coordination among the projects, State and Areas Agencies on Aging, legal services providers, and other potential providers of pension assistance by providing substantive legal training, technical assistance, programmatic coordination, and nationwide outreach, information and referral. The award is a cooperative agreement because AoA will be involved substantially in the project. Eligible applicants include domestic public or private and non-profit entities including state, local and Indian tribal governments, faith-based organizations, community-based organizations, and institutions of higher education, with a proven record of advising and representing individuals who have been denied employer or union-sponsored pension and retirement savings plan benefits, the capacity to provide services under the Program on a national basis, and a well-established, positive reputation in their respective professional communities.

The application deadline for this funding opportunity is April 5, 2010.

To access detailed information on this funding opportunity, please go to http://www.aoa.gov/AoARoot/Grants/Funding/docs/2010/FY10_PensionResourceCenter_PA_final_2_4_10.doc

GAO Report on Retirement Savings

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What GAO Found:
Automatic enrollment appears to significantly increase participation in 401(k) plans according to existing studies, but may not be suitable for all plan sponsors. Some studies found that participation rates can reach as high as 95 percent under automatic enrollment. Available data indicate that the percentage of plans with automatic enrollment policies increased from about 1 percent in 2004 to more than 16 percent in 2009, with higher rates of adoption among larger plan sponsors. In most cases, these plans automatically enroll only new employees, rather than all employees. We also found that automatic enrollment may not be suitable for all plan sponsors, such as those with a high-turnover workforce. Further, some data show that while automatic escalation policies—which automatically increase saving rates over time—are increasingly common, they lag behind adoption of automatic enrollment. In combination with low initial contribution rates, this could depress savings for some workers. Also, the emergence of target-date funds—funds that allocate investments among various asset classes and shift to lower-risk investments as a “target” retirement date approaches—as the typical default investment raises questions in light of the substantial losses such funds experienced in the past year.
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H.R. 3390: To amend the Internal Revenue Code of 1986 to waive the 10 percent penalty on distributions from... (GovTrack.us)

To amend the Internal Revenue Code of 1986 to waive the 10 percent penalty on distributions from certain retirement plans during periods of high unemployment. Sponsor: Rep. Peter Hoekstra [R-MI2] Referred to Committee on Ways and Means Read More

This notice announces the national average value of donated foods or, where applicable, cash in lieu of donated foods, to be provided in school year

Pension Benefit Guaranty Corporation's regulation on Benefits Payable in Terminated Single-Employer Plans prescribes interest assumptions for valuing and paying certain benefits under terminating single[pi]employer plans. This final rule amends the benefit payments regulation to adopt interest assumptions for plans with valuation dates in August 2009. Interest assumptions are also published on PBGC's Web site (http://www.pbgc.gov). Final Rule

Advisory Council on Employee Welfare and Pension Benefit Plans

The Council will study the following issues:
(1) Approaches for Retirement Security in the United States,
(2) Stable Value Funds and Retirement Security in the Current Economic
Conditions, and
(3) Promoting Retirement Literacy and Security by Streamlining Disclosures 
to Participants and Beneficiaries.

The schedule for testimony and discussion of these issues generally will be
one issue per day in the order noted above. Descriptions of these
topics are available on the Advisory Council page of the EBSA Web site, at 
http://www.dol.gov/ebsa/aboutebsa/erisa_advisory_council.html.
The EBSA update is scheduled for the afternoon of July 23, subject to change.
  
Organizations or members of the public wishing to submit a written 
statement may do so by submitting 30 copies on or before July 14, 2009 
to Larry Good, Executive Secretary, ERISA Advisory Council, U.S. 
Department of Labor, Suite N-5623, 200 Constitution Avenue, NW., 
Washington, DC 20210. Statements may also be submitted electronically 
to good.larry@dol.gov. Relevant statements received on or before July 
14, 2009 will be included in the record of the meeting. Individuals or 
representatives of organizations wishing to address the Advisory 
Council should forward their requests to the Executive Secretary or 
telephone (202) 693-8668. Oral presentations will be limited to ten 
minutes, time permitting, but an extended statement may be submitted 
for the record. Individuals with disabilities who need special 
accommodations should contact Larry Good by July 14 at the address 
indicated.

Survey Results of the Nation’s Largest Private Defined Benefit Plan Sponsors

GAO’s survey of the largest sponsors of DB pension plans revealed that respondents have made a number of revisions to their retirement benefit offerings over the last 10 years or so. Generally speaking, they have changed benefit formulas; converted to hybrid plans (such plans are legally DB plans, but they contain certain features that resemble DC plans); or frozen some of their plans. Eighty-one percent of responding sponsors reported that they modified the formula for computing benefits for one or more of their DB plans. Among all plans reported by respondents, 28 percent of these (or 47 of 169) plans were under a plan freeze—an amendment to the plan to limit some or all future pension accruals for some or all plan participants. The vast majority of respondents (90 percent, or 38 of 42 respondents) reported on their 401(k)-type DC plans. Regarding these DC plans, a majority of respondents reported either an increase or no change to the employer or employee contribution rates, with roughly equal responses to both categories. About 67 percent of (or 28 of 42) responding firms plan to implement or have already implemented an automatic enrollment feature to one or more of their DC plans. With respect to health care offerings, all of the (42) responding firms offered health care to their current workers. Eighty percent (or 33 of 41 respondents) offered a retiree health care plan to at least some current workers, although 20 percent of (or 8 of 41) respondents reported that retiree health benefits were to be fully paid by retirees. Further, 46 percent of (or 19 of 41) responding firms reported that it is no longer offered to employees hired after a certain date. At the time of the survey, most sponsors reported no plans to revise plan formulas, freeze or terminate plans, or convert to hybrid plans before 2012. When asked about the influence of recent legislation or changes to the rules for pension accounting and reporting, responding firms generally indicated these were not significant factors in their benefit decisions. Finally, a minority of sponsors said they would consider forming a new DB plan. Those sponsors that would consider forming a new plan might do so if there were reduced unpredictability or volatility in DB plan funding requirements and greater scope in accounting for DB plans on corporate balance sheets. The survey results suggest that the long-time stability of larger DB plans is now vulnerable to the broader trends of eroding retirement security. The current market turmoil appears likely to exacerbate this trend.

Pension Protection Act of 2006: Computing Withdrawal Liability; Reallocation Liability Upon Mass Withdrawal

This final rule amends PBGC's regulation on Allocating Unfunded Vested Benefits to Withdrawing Employers (29 CFR part 4211) to implement provisions of the Pension Protection Act of 2006 that provide for changes in the allocation of unfunded vested benefits to withdrawing employers from a multiemployer pension plan, and that require adjustments in determining an employer's withdrawal liability when a multiemployer plan is in critical status. Pursuant to PBGC's authority under section 4211(c)(5) of ERISA to prescribe standard approaches for alternative withdrawal liability methods, the final rule also amends this regulation to provide additional modifications to the statutory methods for determining an employer's allocable share of unfunded vested benefits. In addition, pursuant to PBGC's authority under section 4219(c)(1)(D) of ERISA, this final rule amends PBGC's regulation on Notice, Collection, and Redetermination of Withdrawal Liability (29 CFR part 4219) to improve the process of fully allocating a plan's total unfunded vested benefits among all liable employers in a mass withdrawal. Finally, this final rule amends PBGC's regulation on Terminology (29 CFR part 4001) to reflect the definition of a ``multiemployer plan'' added by the Pension Protection Act of 2006. DATES: Effective January 29, 2009.

As City Goes Broke, One Expense Is Safe

By JIM DWYER, New York Times Published: December 13, 2008

As perennial hostages to budget-making, most public services are captive to the current fiscal crisis. Not so for the city’s fastest growing expense: pension funds.

Tax Rule Slams Hard-Hit IRAs, 401(k)s

By TOM LAURICELLA, Wall Street Journal (subscription required) In the past month, Congress and the Bush administration have worked feverishly to help Wall Street. Now millions of older adults are seeking last-minute help with a problem that directly affects Main Street: required withdrawals from retirement accounts. Individual taxpayers, lobbying groups and even some politicians are pressing Washington to change the rules regarding "required minimum distributions" (RMDs) from individual retirement accounts, 401(k)s and related savings vehicles. Two weeks ago, AARP, the large membership group for older adults, asked the Treasury Department to give IRA holders the option of not taking a required distribution this year. It's an idea backed by President-elect Barack Obama. The problem, says David Certner, AARP's legislative-policy director, is that time is running out. Typically, distributions must be taken by Dec. 31, and many account holders wait until November or December to withdraw the needed funds.

VA Proposed Rule: Payments and Adjustments to Payments

SUMMARY: The Department of Veterans Affairs (VA) proposes to reorganize and rewrite in plain language provisions applicable to payment of VA benefits and adjustments to payments. These revisions are proposed as part of VA's rewrite and reorganization of all of its compensation and pension rules in a logical, claimant-focused, and user-friendly format. The intended effect of the proposed revisions is to assist claimants, beneficiaries and VA personnel in locating and understanding these rules. DATES: Comments must be received by VA on or before December 30, 2008.

Federal Financial Accounting Standards No. 33, Pensions, Other Retirement Benefits

The Federal Accounting Standards Advisory Board (FASAB) has issued Statement of Federal Financial Accounting Standard 33, Pensions, Other Retirement Benefits, and Other Post-employment benefits: Reporting Gains and Losses from Change in Assumptions and Selecting Discount Rates and Valuation Dates. A summary of the standard follows: The standard highlights gains and losses from changes in assumptions in federal financial reports. Some of the most significant changes in amounts on the statement of net cost for the consolidated Financial Report of the United States Government (CFR) and for certain component entities can result from such gains and losses. Copies of the standard can be obtained by contacting FASAB at 202-512-7350. The standard is also available on FASAB's home page http://www.fasab.gov/.

Working Longer as Jobs Contract

By STEVEN GREENHOUSE - Published: October 23, 2008 New York Times IN recent years, many retirement experts have been giving the same unwelcome advice: American workers who are not as rich as Warren E. Buffett should retire three or so years later than they had planned — to ensure that they have a large enough nest egg. But now, in these extraordinarily turbulent times, with the stock market declining sharply and millions of 401(k) plans plunging in value, many workers are suddenly facing a starker situation — they worry that they might have to work 5, 7, even 10 years later than planned, perhaps well into their 70s. But that’s not the only problem. Even as workers in their 40s, 50s and 60s accept having to work years longer than anticipated, many companies are laying off employees amid the economic downturn. This often means that older workers are pushed out first, because they are usually the highest-paid employees.

PBGC Lost $1.2 Billion in Investments

By Nancy Trejos, Washington Post Staff Writer, October 23, 2008; Page D03 The government agency that insures private-sector pension plans for millions of Americans lost $1.2 billion in the past 11 months to Aug. 31, including a $3.1 billion loss in stock investments. The Pension Benefit Guaranty Corp. incurred the loss even before the stock market's historic tumble last month, according to preliminary unaudited figures released by the House Education and Labor Committee.

Argentina Makes Grab for Pensions Amid Crisis

By MATT MOFFETT in the Wall Street Journal BUENOS AIRES -- Hemmed in by the global financial squeeze and commodities slump, Argentina's leftist government has seemingly found a novel way to find the money to stay afloat: cracking open the piggybank of the nation's private pension system. The government proposed to nationalize the private pensions, which would provide it with much of the cash it needs to meet debt payments and avoid a second default this decade. (Note: online access to this article requires a paid subscription to the online Wall Street Journal)

Early Boomers and the Economic Mess

Robert Reich in Robert Reich's Blog - The economic meltdown is hurting everyone. But if you’re an early baby boomer over the age of 55, you may be in particularly big trouble. In an economic crisis, many employers lay off older workers first because their seniority makes them more expensive. And studies document that older workers who lose their jobs face more difficulties finding new ones. That’s not the biggest problem you face. The house you’ve been living in for twenty-five or thirty years and were planning to cash in for retirement is worth far less now than the last time you looked. So is that 401-k plan you were counting on. And you don’t have enough time before retirement to make up for these losses -- certainly not enough time to reap the gains you expected between now and then. If the economic crisis is as bad as some predict, housing prices and share values might not bounce back for five years or more. Japan’s meltdown took ten years to correct. We early boomers – and note I said “we,” because, sadly, I’m one of you – once had all the advantages. We entered the housing market in the 1970s and 80s, when houses were still cheap, and reaped the gains when late boomers came into the market and pushed prices up. We also got the plumb jobs because we were first into the post-industrial economy, before the boomers who followed us. And many of us got into the stock market early on, and rode that great wave. So maybe now we’re paying the price for our good fortune then. But that doesn’t make this any less painful. One saving grace. At least the Bushies didn't have the votes to privatize Social Security. Had they got their way -- and were we now completely reliant on the stock market for our retirements -- we early boomers would be in, as the President's father used to say, deep doo doo.

Terminated Single-Employer Pension Plans

The Pension Benefit Guaranty Corporation's regulations on Benefits Payable in Terminated Single-Employer Plans and Allocation of Assets in Single-Employer Plans prescribe interest assumptions for valuing and paying benefits under terminating single-employer plans. This final rule amends the regulations to adopt interest assumptions for plans with valuation dates in November 2008. Interest assumptions are also published on the PBGC's Web site (http://www.pbgc.gov).

Retirement Wreck - Are 401(k)s Still Viable for Saving?

By Nancy Trejos,Washington Post Staff Writer Sunday, October 12, 2008; Page F01 For many Americans, 401(k) plans were supposed to be their own little golden parachutes into retirement. Now, it seems, those parachutes may not open in time. The global financial crisis that revealed the flaws of Wall Street has also exposed the vulnerability of America's retirement system. Employers have increasingly abandoned traditional pensions, forcing workers to rely on 401(k)s and similar plans that have a lot more exposure to the stock market. The assumption was that even if the market suffered short-term losses, over time it would rise, allowing workers to recoup their savings. But the steepness of this year's market collapse and the still-uncertain depth of the economic downturn has prompted lawmakers, academics and economists to question the wisdom of letting workers hitch their retirement fortunes to the precariousness of the stock market.