Detroit bankruptcy: What happens to the city’s retirees?
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Chances are you’ve heard about Detroit’s financial struggles and the impact the city’s bankruptcy may have on its current and future retirees. PRC executive vice president and policy director Karen Friedman discussed the “broken promise” if retirees’ benefits are cut on PBS’ Nightly Business Report. Karen noted that the pensioners are being unfairly scapegoated for the city’s problems, which were caused by a myriad of complex factors that have nothing to do with their pensions. She pointed out that if Detroit is allowed to reduce retirees’ pensions in bankruptcy, other cities could follow suit.
Video: Karen Friedman on Nightly Business Report | CNN Money article: Detroit's workers and retirees face big cuts | All In With Chris Hayes interview with AFSCME’s Lee Saunders |
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Pension Rights Center co-sponsors briefing on investor protections
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The Pension Rights Center joined consumer, retiree, and labor organizations to warn Congress about H.R. 2345, the misnamed Retail Investor Protection Act. The bill would effectively prevent the U.S. Department of Labor from ensuring that Americans receive unbiased advice about their 401(k) and Individual Retirement Account investments. At a Capitol Hill briefing with AARP, Americans for Financial Reform, the AFL-CIO, financial planner Ron Rhoades, and Verizon retiree Janice Winston, PRC senior policy advisor Norman Stein described the negative impact this bill would have on the ability of Americans to save for retirement. The financial services industry is lobbying hard to allow brokers and investment advisors to continue to put their self-interest ahead of the interests of their clients, but the Pension Rights Center and its allies are determined to stop this bad bill.
Blog entry: Congress should protect investors, not undermine them | Video of briefing | PRC letter to House of Representatives opposing HR 2374 | Read statements by Norman Stein and Janice Winston | Article: An X-ray of one affluent, educated and sophisticated investor's portfolio shows how it was chewed up by fees |
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Two new fact sheets explain complex retirement issues
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Two new PRC fact sheets highlight issues many current and future retirees should know about. “What is Recoupment?” explains actions pension plans take to recoup, or recover, money that has been mistakenly overpaid to retirees, and what steps retirees can take to fight recoupment actions. “State Retirement System Rules on Spousal Consent” highlights the absence of “spousal consent” requirements in many state retirement systems, and includes a map that links to the spousal consent rules for the largest public retirement plan in each state. A related blog describes what happened when an employee signed away survivor protections without the knowledge of his wife.
More: What is Recoupment?| Counseling Project recoupment success: South Central Pension Rights Project saves a retiree from a $120,000 recoupment | State Retirement System Rules on Spousal Consent | Blog entry: Spouses deserve an equal voice in retirement decisions
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Pension Rights Center urges Department of Labor to require lifetime income calculations
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The Pension Rights Center believes that it is important for workers who participate in 401(k) and other defined contribution plans to know what their current account balances would produce in monthly income at retirement. That’s why the Pension Rights Center and the National Women's Law Center submitted comments to the Department of Labor on the importance of including lifetime income calculations in 401(k) benefit statements.
More: Joint comments to Labor on lifetime income estimates on benefit statements |
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Pension Rights Center supports creation of a Missing Participants database |
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When a 401(k) or other individual account plan terminates it must pay benefits to all plan participants. This task can become difficult when a plan discovers that it no longer has current contact information for all plan participants. In comments submitted to the Pension Benefit Guaranty Corporation, Policy Analyst Jane Smith noted that the Center supports the creation of an online, searchable database that would list the names of missing participants and the location of their benefits. Such a database would “provide an invaluable one-stop source for participants, beneficiaries and their advocates seeking to find missing benefits.”
More: PRC comments to PBGC on missing participants and lost plans
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Pension Rights Center