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New From the GAO

September 17, 2014 Comments off

New From the GAO
Source: Government Accountability Office

Reports

1. 8(a) Subcontracting Limitations: Continued Noncompliance with Monitoring Requirements Signals Need for Regulatory Change. GAO-14-706, September 16.
http://www.gao.gov/products/GAO-14-706
Highlights – http://www.gao.gov/assets/670/665828.pdf

2. Health Insurance Exchanges: Coverage of Non-excepted Abortion Services by Qualified Health Plans. GAO-14-742R, September 15.
http://www.gao.gov/products/GAO-14-742R

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1. Land-Use Agreements: Department of Veterans Affairs Needs to Improve Data Reliability and Monitoring. GAO-14-501, August 18.
http://www.gao.gov/products/GAO-14-501
Highlights – http://www.gao.gov/assets/670/665331.pdf

2. Healthcare.gov: Actions Needed to Address Weaknesses in Information Security and Privacy Controls. GAO-14-730, September 17.
http://www.gao.gov/products/GAO-14-730
Highlights – http://www.gao.gov/assets/670/665841.pdf

3. Broadcast Television and Radio: Disclosure Requirements for Broadcasted Content. GAO-14-738, September 17.
http://www.gao.gov/products/GAO-14-738
Highlights – http://www.gao.gov/assets/670/665859.pdf

Statement for the Record

1. Individual Retirement Accounts: Preliminary Information on IRA Balances Accumulated as of 2011, by James R. McTigue, director, strategic issues, and Charles A. Jeszeck, director, education, workforce, and income security issues, to the Senate Committee on Finance. GAO-14-878T, September 16.
http://www.gao.gov/products/GAO-14-878T
Highlights – http://www.gao.gov/assets/670/665805.pdf

Testimony

1. Financial Stability Oversight Council: Status of Efforts to Improve Transparency, Accountability, and Collaboration, by A. Nicole Clowers, director, financial markets and community investment team, before the Subcommittee on Oversight and Investigations, House Committee on Financial Services. GAO-14-873T, September 17.
http://www.gao.gov/products/GAO-14-873T
Highlights – http://www.gao.gov/assets/670/665852.pdf

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New From the GAO

September 10, 2014 Comments off

New GAO Reports and Testimonies
Source: Government Accountability Office

Reports

1. Federally Funded Research Centers: Agency Reviews of Employee Compensation and Center Performance. GAO-14-593, August 11.
http://www.gao.gov/products/GAO-14-593
Highlights – http://www.gao.gov/assets/670/665285.pdf

2. Foreign Assistance: USAID Should Update Its Trade Capacity Building Strategy. GAO-14-602, August 11.
http://www.gao.gov/products/GAO-14-602
Highlights – http://www.gao.gov/assets/670/665281.pdf

3. Veterans Affairs: Better Understanding Needed to Enhance Services to Veterans Readjusting to Civilian Life. GAO-14-676, September 10.
http://www.gao.gov/products/GAO-14-676
Highlights – http://www.gao.gov/assets/670/665724.pdf

4. DHS Training: Improved Documentation, Resource Tracking, and Performance Measurement Could Strengthen Efforts. GAO-14-688, September 10.
http://www.gao.gov/products/GAO-14-688
Highlights – http://www.gao.gov/assets/670/665700.pdf

5. Defense Planning: DOD Needs Specific Measures and Milestones to Gauge Progress of Preparations for Operational Access Challenges. GAO-14-801, September 10.
http://www.gao.gov/products/GAO-14-801
Highlights – http://www.gao.gov/assets/670/665696.pdf

Testimonies

1. Department of Education: Status of Prior GAO Recommendations, by Jacqueline M. Nowicki, acting director, education, workforce, and income security, and Melissa Emrey-Arras, director, education, workforce, and income security, before the Subcommittee on Higher Education and Workforce Training and the Subcommittee on Early Childhood, Elementary, and Secondary Education, House Committee on Education and the Workforce. GAO-14-848T, September 10.
http://www.gao.gov/products/GAO-14-848T
Highlights – http://www.gao.gov/assets/670/665694.pdf

2. Older Americans: Inability to Repay Student Loans May Affect Financial Security of a Small Percentage of Retirees, by Charles A. Jeszeck, director, education, workforce, and income security, before the Senate Special Committee On Aging. GAO-14-866T, September 10.
http://www.gao.gov/products/GAO-14-866T
Highlights – http://www.gao.gov/assets/670/665710.pdf

High Interest GAO Report — Inability to Repay Student Loans May Affect Financial Security of a Small Percentage of Retirees

September 10, 2014 Comments off

Inability to Repay Student Loans May Affect Financial Security of a Small Percentage of Retirees
Source: Government Accountability Office

Comparatively few households headed by older Americans carry student debt compared to other types of debt, such as for mortgages and credit cards. GAO’s analysis of the data from the Survey of Consumer Finances reveals that about 3 percent of households headed by those aged 65 or older—about 706,000 households—carry student loan debt. This compares to about 24 percent of households headed by those aged 64 or younger—22 million households. Compared to student loan debt, those 65 and older are much more likely to carry other types of debt. For example, about 29 percent carry home mortgage debt and 27 percent carry credit card debt. Still, student debt among older American households has grown in recent years. The percentage of households headed by those aged 65 to 74 having student debt grew from about 1 percent in 2004 to about 4 percent in 2010. While those 65 and older account for a small fraction of the total amount of outstanding federal student debt, the outstanding federal student debt for this age group grew from about $2.8 billion in 2005 to about $18.2 billion in 2013.

Annual Defined Contribution Benchmarking Survey (2013-2014 Edition)

September 8, 2014 Comments off

Annual Defined Contribution Benchmarking Survey (2013-2014 Edition)
Source: Deloitte

Plan sponsors responding to Deloitte’s Annual Defined Contribution Benchmarking Survey report an encouraging six percentage point uptick in the average employee participation rate, which rose from 71 percent in 2012 to 77 percent in 2013. But figuring out how to lure the remaining quarter of employees and increase engagement levels overall continues to be a perplexing challenge.

The improving economy seems to have alleviated some employee anxiety about setting aside money for the future. The top reason respondents gave for lack of employee participation shifted from “uncertain economy/job market” (14 percent in 2013 vs. 24 percent in 2012) to “lack of awareness or understanding” (30 percent in 2013 vs. 21 percent in 2012). But with the majority of respondents (82 percent) reporting that educational tools and resources widely available, why are so many employees still not engaged or interested?

It may be that offering alternatives to traditional communications channels can help here. Employee satisfaction with handheld connectivity tools continues to climb, jumping to 61 percent in 2013 from 53 percent in 2012 and 28 percent in 2011. This points to a significant opportunity. So far, 20 percent of responding retirement plans use the latest communication methods (e.g. smartphone and tablet apps) to educate employees on retirement readiness, more than half support transaction processing via a mobile device and 31 percent report their participants are using apps to interact with recordkeepers.

To further boost participation, more plan sponsors are offering immediate eligibility for matching contributions, reducing eligibility restrictions and offering auto-enrollment.

Canada Pension Plan costs triple as investment board spending skyrockets

September 5, 2014 Comments off

Canada Pension Plan costs triple as investment board spending skyrockets
Source: Fraser Institute

The cost of running the Canada Pension Plan has more than tripled, the result of transaction fees and external management fees, finds a new study released today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

The study, Accounting for the True Cost of the Canada Pension Plan, spotlights the costs of administering the CPP, which includes spending by the CPP Investment Board, a Crown corporation that manages and invests CPP assets, as well as costs incurred by the federal government to run the plan.

Between fiscal years 2006-07 and 2012-13, the total cost of running the CPP jumped to $2 billion from $600 million, despite an investment board report that claimed its operating expenses in 2012-13 were only $490 million.

Why the discrepancy? The CPP Investment Board excludes from its operating budget a) management fees it pays to external consultants, b) transaction fees associated with acquiring assets and c) costs incurred by four federal government departments.

The world’s 300 largest pension funds – year end 2013

September 3, 2014 Comments off

The world’s 300 largest pension funds – year end 2013
Source: Towers Watson

Total assets of the world’s largest 300 pension funds grew by over 6% in 2013 (compared to around 10% in 2012) to reach a new high of almost US$15 trillion (up from US$14 trillion in 2012). The P&I / Towers Watson global 300 research is conducted in conjunction with Pensions & Investments, a leading US investment newspaper.

Latin American and African funds had the highest five-year combined compound growth rate of over 16% (albeit from a low base) compared to Europe (12%), North America (around 6%) and Asia-Pacific (around 5%).

Defined benefit (DB) funds account for 67% of total assets, down from 75% five years ago. During 2013, DB assets grew by around 3%, compared to reserve funds (15%), defined contribution (DC) plans (over 9%) and hybrids (over 8%).

Sovereign funds continue to feature strongly in the ranking with 27 of them accounting for 28% of assets and totalling around US$4.2 trillion. The 113 public sector funds in the research had assets of US$5.8 trillion in 2013 and account for 39% of the total. Private sector industry funds (61) and corporate funds (99) account for 14% and 19% respectively of assets in the research.

2013 Annual Survey of Public Pensions: State-Administered Defined Benefit Data

September 2, 2014 Comments off

2013 Annual Survey of Public Pensions: State-Administered Defined Benefit Data
Source: U.S. Census Bureau

Provides a comprehensive look at the financial activity of the nation’s state-administered defined benefit pension systems, including cash and investment holdings, receipts, payments, pension obligations and membership information. Statistics are shown at the national level and for individual states. The total cash and investment holdings of the nation’s state-administered defined benefit pensions systems totaled $2.7 trillion in 2013. By comparison, total cash and investment holdings totaled $2.5 trillion in 2012, yielding a 7.8 percent increase from 2012 to 2013.

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