New Case Study Examines How Dismantling Pensions Triggered Mass Exodus of Public Safety Workers

A new case study examines the impacts of the 2012 actions of the Town of Palm Beach to close its existing defined benefit (DB) pension systems for its employees, including police officers and firefighters.

The new “combined” retirement plans offered dramatically lower DB pension benefits and new individual 401(k)-style defined contribution (DC) retirement accounts. Shortly thereafter, the town experienced a high rate of retirements and unprecedented early departures of experienced police officers and firefighters to neighboring towns that offered better pensions. Now understaffed, the town faced increased costs to pay overtime hours and train replacements for more than 100 public safety workers who departed during a four-year period after the pension changes.

Following this large, swift exodus of public safety employees, the town reconsidered the changes. In 2016, the Town Council voted to abandon the DC plans and to improve the pension plan for police officers and firefighters.

These findings are contained in new research case study from the National Institute on Retirement Security (NIRS), Retirement Reform Lessons: The Experience of Palm Beach Public Safety Pensions. The research is authored by Diane Oakley, NIRS executive director. Continue reading “New Case Study Examines How Dismantling Pensions Triggered Mass Exodus of Public Safety Workers”

Canadian DB plans post positive returns in last quarter of 2017

Canadian defined benefit plans posted a median return of 4.29 per cent in the last quarter of 2017, a marked improvement compared to the median return of 0.55 per cent in the third quarter of the year, according to a report by BNY Mellon Asset Management Canada Ltd.

The firm’s tracking service, which consists of 88 Canadian corporate, public and university pension plans, showed a one-year median return of 9.83 per cent in its latest report. It found Canadian university plans had the highest median returns (4.22 per cent) in the fourth quarter, followed closely by foundations and endowments (4.11 per cent).

Continue reading “Canadian DB plans post positive returns in last quarter of 2017”

Tax Reform Fuels DB Plan Accelerated Funding

Since, under tax reform, the corporate tax rate will be lower in the future than what had previously been in effect, more voluntary defined benefit (DB) plan contribution activity is expected, according to Michael A. Moran, managing director and chief pension strategist with Goldman Sachs Asset Management (GSAM).

In a Q&A on GSAM’s website, Moran explains that contributions to corporate DB plans are generally tax deductible up to certain limits. For plan sponsors that were contemplating making a contribution in future years, some decided to accelerate that contribution into 2017 in order to reap the benefits of getting the tax deduction at a higher rate. GSAM observed that Kroger and Valvoline are two examples of companies that explicitly cited potential corporate tax reform as one of the reasons for making a voluntary contribution earlier in 2017. Continue reading “Tax Reform Fuels DB Plan Accelerated Funding”

Lockheed Martin to Contribute $5 Billion to Pension in 2018

In its 2017 full-year results, defense contractor Lockheed Martin said it will make contributions of $5 billion to its qualified defined benefit pension plans in 2018, including required and discretionary contributions.

It is the largest announced voluntary pension contribution so far in 2018, and is one of the largest pension contributions in recent years. Continue reading “Lockheed Martin to Contribute $5 Billion to Pension in 2018”

The top retirement decisions facing older workers

As workers in their 50s and 60s transition into their retirement years, they face several important planning decisions. But which ones will have the most impact on their finances?

You might think that finding the very best investments or minimizing taxes are really important. However, those would be the wrong answers for many middle-income workers.

Instead, check out a new study by the Stanford Center on Longevity (SCL), in collaboration with the Society of Actuaries (SOA). It demonstrates that the most important decisions for older, middle-income workers are: Continue reading “The top retirement decisions facing older workers”

Public Pensions Are Delivering on Promises to Retirees, Annual NCPERS Study Shows

Public retirement systems produced solid returns, kept a lid on expenses, and adopted more conservative investment assumptions during 2017, according to a wide-ranging annual study by the National Conference on Public Employee Retirement Systems.

This press release features multimedia. View the full release here: Continue reading “Public Pensions Are Delivering on Promises to Retirees, Annual NCPERS Study Shows”

More investors are putting their money where their beliefs are

It used to be fairly simple to pick companies considered socially responsible investments. All an investor had to do was avoid business associated with alcohol, tobacco, weapons and gambling.

That approach to ethical investing would greenlight just about any company involved in health care or technology with little or no regard for how the company conducted business, treated employees or dealt with the environment.

“Today, responsible investing takes a more sophisticated approach,” said Jonathan Bernstein, a senior research analyst at the Downtown-based Hefren-Tillotson wealth management firm. “It says every company is different. There are good and not so good companies within each industry.” Continue reading “More investors are putting their money where their beliefs are”

Sen. Schumer, Teamsters Push for Bill to Cover Pensions

Sen. Chuck Schumer and Rep. Peter King joined Long Island Teamsters Jan. 2 in calling for union pension shortfalls to be funded through Treasury bonds tied to the federal budget.

Schumer (D-N.Y.) and King (R-Seaford) are pushing Congress to pass the Butch Lewis Act, which would create a new office within the Treasury Department to allow pension plans to borrow for any shortfall using Treasury bonds issued by the government to sell to financial institutions. Continue reading “Sen. Schumer, Teamsters Push for Bill to Cover Pensions”

‘I hope I can quit working in a few years’: A preview of the U.S. without pensions

Tom Coomer has retired twice: once when he was 65, and then several years ago. Each time he realized that with just a Social Security check, “You can hardly make it these days.”

So here he is at 79, working full-time at Walmart. During each eight-hour shift, he stands at the store entrance greeting customers, telling a joke and fetching a “buggy.” Or he is stationed at the exit, checking receipts and the shoppers that trip the theft alarm.

“As long as I sit down for about 10 minutes every hour or two, I’m fine,” he said during a break. Diagnosed with spinal stenosis in his back, he recently forwarded a doctor’s note to managers. “They got me a stool.” Continue reading “‘I hope I can quit working in a few years’: A preview of the U.S. without pensions”

Scores injured as violent protests breakout against pension reform plans

Argentine lawmakers passed the controversial pension legislation Tuesday in a 128 to 116 vote after debating for more than 12 hours.

The bill, which had already passed the Senate, angered many retirees and sparked huge protests on the streets of Buenos Aires on Monday night. Masked demonstrators hurled firecrackers, bottles and gasoline bombs at police officers guarding the Congress building.

Security forces in the Argentine capital responded with water canons and fired rubber bullets at demonstrators. According to reports, as many as 150 people were injured in the ensuing clashes, including many bystanders and peaceful protesters. Around 60 people were arrested. Continue reading “Scores injured as violent protests breakout against pension reform plans”