The PRC Perspectives blog is just that - perspectives from the Pension Rights Center on current issues in the world of pensions. Read our take on the issues and leave comments to tell us your take.
Happy 34th Birthday, ERISA!
Today marks the 34th anniversary of the date that the Employee Retirement Income Security Act of 1974, known to those in the field of pensions as ERISA, was signed into law. In a tribute to the workers who would be helped by the new law, that day, September 2, 1974, fell on Labor Day. Read the rest of this entry »
An Associated Press story appearing in the Washington Post this week carries disturbing news about the deteriorating financial health of older Americans.
According to an analysis by the Consumer Bankruptcy Project, which studied bankruptcies filed between 1991 and 2007, the bankruptcy filing rate has risen dramatically for Americans over the age of 55, with the oldest age group having the greatest increase. Read the rest of this entry »
Every day I receive calls from workers and retirees who need help with their pensions. Often, the people I speak to are looking for lost pension income that their employers promised would arrive at a critical time in their lives - retirement. These callers may be having trouble locating their pensions or finding out if they are even eligible to receive benefits. Read the rest of this entry »
Earlier this week, the Wall Street Journal published a shocking exposé about how companies are using pension plans - which are intended for rank-and-file workers - to covertly fund the executive benefits of their highest-paid officers.
WSJ journalists Ellen Schultz and Theo Francis report that “At a time when scores of companies are freezing pensions for their workers, some are quietly converting their pension plans into resources to finance their executives’ retirement benefits and pay.” Read the rest of this entry »
Last week the federal minimum wage rose to $6.55 an hour, increasing the annual earnings for a full-time minimum wage worker to $13,624. While it’s certainly the right move for Congress to raise the minimum wage for current workers, it raises an important question about retired workers. Take a look at our statistics page and you’ll see why: The average retired worker’s Social Security check is now less than that of a minimum wage worker. Read the rest of this entry »
When I was head of the Employee Benefits Security Administration (the Department of Labor agency charged with protecting pensions) during the Clinton administration, I became concerned about whether or not people who had 401(k) plans truly understood how much they were paying in fees and what those fees were for. So in 1997 and 1998, we held hearings and issued a report [PDF] on the issue.
A couple of months ago, I decided to take another look at the 1998 report to see what had changed in the last 10 years. Read the rest of this entry »
In an earlier blog post, we discussed efforts in Congress to make it easier for people to withdraw money from their 401(k) accounts to save their homes from foreclosure. Such withdrawals are part of a larger problem with 401(k)s known as “leakage” (what a lovely name!) – loans, early withdrawals, and lump-sum payouts that reduce or deplete a worker’s retirement savings account long before the worker actually retires. Between withdrawal penalties, interest charged on loans, and the overall reduction in their retirement savings, “leakage” has long-term consequences that many workers aren’t aware of until it’s too late. Read the rest of this entry »
Too often we hear bad news stories about how public pension plans are underfunded and that they’re a drain to taxpayers. But a congressional hearing last week told a different story. The hearing, Your Money, Your Future: Public Pension Plans and the Need to Strengthen Retirement Security and Economic Growth, focused on how public sector pensions efficiently provide adequate retirement income to a large segment of the workforce. Read the rest of this entry »
Last month, the United States Supreme Court addressed the issue of how courts should review a benefit plan’s denial of an application for benefits. The results were mixed for workers and retirees. Read the rest of this entry »
In down economic times, it isn’t uncommon for people to feel the urge to dip into their assets to help make ends meet. Therefore, it isn’t a surprise to hear that more and more people are borrowing from their 401(k) plans for a little extra cash. Some people are even paying hefty taxes to permanently withdraw money from their 401(k)s . Read the rest of this entry »
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