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How Will Longer Lifespans Affect State and Local Pension Funding?

April 17, 2015 Comments off

How Will Longer Lifespans Affect State and Local Pension Funding?
Source: Center for State & Local Government Excellence

Americans are living longer – and that creates new funding challenges for state and local pension plans. Private sector plans are already required to utilize new mortality tables which account for increased longevity when formulating their cost estimates. A new issue brief from the Center for State and Local Government Excellence, How Will Longer Lifespans Affect State and Local Pension Funding?, examines the impact that incorporating longevity improvements into their costs estimates would have on the funded status of state and local defined benefit plans.

The brief explores explores what public plan liabilities and funded ratios would look like under two alternative scenarios:

  • if public plans were required to use the new mortality tables designed for private sector plans; and
  • if public plans were required to go one step further and fully incorporate expected future mortality improvements.

Key findings include:

  • Using the private sector standard, public plans underestimate life expectancy by only 0.5 years, reducing the 2013 funded status of state and local plans from 73 to 72 percent.
  • Incorporating future mortality improvements would increase life expectancy by 2.3 years and reduce the funded ratio of public plans from 73 to 67 percent.
  • Public sector plans appear to be making a serious effort to keep their life expectancy assumptions up to date.

SEC Staff and FINRA Issue Report on National Senior Investor Initiative

April 17, 2015 Comments off

SEC Staff and FINRA Issue Report on National Senior Investor Initiative
Source: U.S. Securities and Exchange Commission and Financial Industry Regulatory Authority

With the Social Security Administration estimating that each day for the next 15 years, an average of 10,000 Americans will turn 65, the staff of the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) today issued a report to help broker-dealers assess, craft, or refine their policies and procedures for investors as they prepare for and enter into retirement.

The National Senior Investor Initiative report includes observations and practices identified in examinations that focused on how firms conduct business with senior investors. The examinations by the SEC’s Office of Compliance Inspections and Examinations (OCIE) and FINRA focused on the types of securities purchased by senior investors, the suitability of recommended investments, training of brokerage firm representatives, marketing, communications, use of designations such as “senior specialist,” account documentation, disclosures, customer complaints, and supervision.

The High Public Cost of Low Wages

April 16, 2015 Comments off

The High Public Cost of Low Wages
Source: University of California-Berkeley (Center for Labor Research and Education)

Even as the economy has at last begun to expand at a more rapid pace, growth in wages and benefits for most American workers has continued its decades-long stagnation. Real hourly wages of the median American worker were just 5 percent higher in 2013 than they were in 1979, while the wages of the bottom decile of earners were 5 percent lower in 2013 than in 1979. Trends since the early 2000s are even more pronounced. Inflation-adjusted wage growth from 2003 to 2013 was either flat or negative for the entire bottom 70 percent of the wage distribution. Compounding the problem of stagnating wages is the decline in employer-provided health insurance, with the share of non-elderly Americans receiving insurance from an employer falling from 67 percent in 2003 to 58.4 percent in 2013.

Stagnating wages and decreased benefits are a problem not only for low-wage workers who increasingly cannot make ends meet, but also for the federal government as well as the 50 state governments that finance the public assistance programs many of these workers and their families turn to. Nearly three-quarters (73 percent) of enrollees in America’s major public support programs are members of working families; the taxpayers bear a significant portion of the hidden costs of low-wage work in America.

This is the first report to examine the cost to the 50 states of public assistance programs for working families. We examine working families’ utilization of the health care programs Medicaid and Children’s Health Insurance Program (CHIP), as well as their enrollment in the basic household income assistance program Temporary Aid to Needy Families (TANF). Both of these programs operate with shared funding from the federal government and the states, and in this report we also examine the costs to the federal government of Medicaid/CHIP and TANF, as well as the Earned Income Tax Credit (EITC) and the food stamps program (Supplemental Nutrition Assistance Program, or SNAP). Our analysis includes only the cash assistance portion of TANF, and it does not include costs for state Earned Income Tax Credits, child care assistance, or other state-funded means-tested programs. Overall, we find that between 2009 and 2011 the federal government spent $127.8 billion per year on these four programs for working families and the states collectively spent $25 billion per year on Medicaid/CHIP and TANF for working families for a total of $152.8 billion per year. In all, more than half—56 percent—of combined state and federal spending on public assistance goes to working families.

New Administration Report: Exports Helping to Support Jobs, Grow Small Businesses Across America

April 14, 2015 Comments off

New Administration Report: Exports Helping to Support Jobs, Grow Small Businesses Across America
Source: U.S. Department of Commerce

U.S. Commerce Secretary Penny Pritzker and United States Trade Representative Michael Froman today released a new report that shows that the number of jobs supported by goods exports continues to rise in states across the country. The report also includes individual success stories, in all 50 states, of small and medium sized businesses that are using exports to expand their businesses and support well-paying American jobs.

Characteristics of the College-Educated Population and the Science and Engineering Workforce in the United States

April 14, 2015 Comments off

Characteristics of the College-Educated Population and the Science and Engineering Workforce in the United States
Source: National Science Foundation

T​he number of college graduates in the United States nearly doubled between 1993 and 2013, from 29 million to 55 million, according to the National Survey of College Graduates (NSCG). The number of college graduates with degrees in science and engineering (S&E) fields grew faster than the number of college graduates with degrees in non-S&E fields. Additionally, in 2013, about 1 in 10 college graduates were employed in an S&E occupation, and this proportion has remained largely unchanged since 1993. Women accounted for more than one-half of the college graduate population in the United States in 2013. However, women constituted only 29% of those employed in S&E occupations.

Global Human Capital Trends 2015; Leading in the new world of work

April 14, 2015 Comments off

Global Human Capital Trends 2015; Leading in the new world of work
Source: Deloitte

Global organizations today navigate a “new world of work”—one that requires a dramatic change in strategies for leadership, talent, and human resources. More than 3,300 organizations from 106 countries contributed to Deloitte’s Global Human Capital Trends 2015 survey, assessing the importance of specific talent challenges and their readiness to meet them.

This report explores 10 major trends that emerged from our research, which reflects four major themes for 2015: leading, engaging, reinventing, and reimagining. We present the capability gaps associated with each of these trends and offer practical insights to help you address these challenges in your organization. We also outline six key findings and invite you to interact with the Human Capital Trends Dashboard to explore the trends by geography, industry, and company size.

Informal Work in the United States: Evidence from Survey Responses

April 13, 2015 Comments off

Informal Work in the United States: Evidence from Survey Responses
Source: Federal Reserve Bank of Boston

Key Findings

  • The authors calculate the following informal work participation rates among four employment-status groups: 42.8 percent of full-time workers, 59.4 percent of part-time workers, 39.6 percent of those who report wanting a job, and 26.5 percent of those classified as “other not working.” Overall, about 44 percent of the survey respondents reported participating in some informal paid work during 2011–2013—earning money was the most widely cited reason for doing so.
  • Translating their four employment categories into the three official classifications used by the Bureau of Labor Statistics (BLS), the authors find that 26 percent of those people who the BLS define as “not in the labor force” (NILF) are engaging in informal work.
  • In respect to offsetting the negative effects from the Great Recession, 8 percent of those participating in the informal labor market said that this work helped “very much” to mitigate these shocks, while 27 percent indicated that informal work helped “somewhat” to insulate them from the recession. Part-timers engaging in informal work appear to have benefitted the most—19 percent indicated that informal work helped “very much” to offset the recession’s negative consequences.
  • Over half of those reporting engaging in informal work indicated that they were performing Internet-based tasks, or making use of the Internet when doing such tasks.
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