Pension News

There’s a firmly-ingrained notion among many investors that stocks outperform bonds over the long term by an average of 5 percent. This view isn’t based on reality but “myth.” At least that’s what contrarian financial analyst and money manager Robert D. Arnott, chairman of Research Affiliates says.

Arnott, who reviewed data going back to 1801, found that there are several long periods in which bonds outpace stocks: 1803-1871, 1929-1949, and 1968-February 2009. (more…)

Today, May 1, marks the start of Older Americans Month. What better a day to discuss the retirement security of older Americans? Not so long ago retirement security was thought of as a three-legged stool, consisting of employer-sponsored pensions, personal savings and Social Security.   (more…)

With Mother’s Day approaching, it seems only fitting that I put in a plug for the current edition of Mother Jones magazine. Its cover asks, “Who Ran Away With Your 401(k)?” and the issue is required reading for anyone interested in the future of retirement income.   (more…)

Today, April 28, is Equal Pay Day, in recognition of the fact that on average women earn less than men. For women, as former Congresswoman Patricia Schroeder once noted, this discrimination throughout their lives “strikes its cruelest blow at the end.”

The Lily Ledbetter Equal Pay Act of 2009 will not only help close the wage gap for women who have experienced pay discrimination in the workplace, but it will also help close the pension gap. (more…)

Are you a retiree from the auto industry?  The Pension Benefit Guaranty Corporation, the federal agency that guarantees pensions, has provided helpful information for retirees of Ford, General Motors, Chrysler, and other car companies.  

The PBGC guarantees pension benefits up to a certain limit for retirees of companies that have gone bankrupt and are unable to fulfill their pension obligations.  Unfortunately for some retirees, the PBGC maximum guarantees may be less than what their pension is worth.  For more information on how the PBGC protects defined benefit pensions, read our fact sheet.

Last week, the U.S. House of Representatives approved a Roth alternative in the Thrift Savings Plan for government employees. Roths are the antithesis of sensible tax and budget policy. Rather than expanding them to federal employees, Congress should scrap them.

As most of us know, there are now two choices in both IRAs and 401(k)s. With a traditional IRA or 401(k), the contribution is not taxed when made, but distributions from the retirement plan are taxable. In both Roth IRAs and Roth 401(k)s, the contribution is taxed in the year that it is made, but distributions are tax-free.

The advantage of either alternative is the same — the elimination of tax on investment income. The difference is when the money is taxed.  This may seem like a minor difference, but the amount of money that you can accumulate tax-free can be greater in a Roth. (more…)

In the uproar over the million-dollar bonuses given to AIG executives, AIG’s defenders claimed that the company was forced to give out these bonuses because of contracts it signed with the executives.  In Sunday’s St. Petersburg Times, columnist Robyn Blumner uses AIG and United Airlines to make a terrific point about the disgraceful inequities in bankruptcy laws that give rank-and-file workers’ pensions the shaft, while executives can still walk away with millions.  Give it a read. (more…)

In the current economic climate, few of us want to open our 401(k) statements.  As we’ve written in the past, the faltering stock market, combined with employers eliminating their 401(k) matching contributions, has made retirement security quite a gamble.  But if you are one of the brave, a new tool can help you find out how your 401(k) measures up to 401(k) plans at other companies. (more…)

Since the beginning of the economic downturn we’ve seen a lot of stories in the news about the decline in the funding status of pension plans.  Given that pension plans are heavily invested in the stock market, real estate and other assets that have lost significant value in the economic downturn, it would follow suit that the funding levels in these plans have also decreased. (more…)

It isn’t uncommon to hear people comparing NBC’s hit television show, The Office, to their own workplaces.  Many of the events on the show mirror what happens in offices across the country.  But for many people last night’s episode hit a little too close to home. (more…)