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Retirement Benefit Decisions by City and County Governments

December 19, 2014 Comments off

Retirement Benefit Decisions by City and County Governments
Source: Center for State & Local Government Excellence

Key findings:

  • Workers who work a full career in their city or county can expect a retirement income of between 45 and 80 percent of their pre-retirement income.
  • Career employees of local governments who participate in Social Security can expect retirement income replacement rates of 20 to 30 percentage points higher than employees whose governments do not participate in Social Security.
  • These and other variations mean that many local workers will need to be disciplined about participating in savings plans, outside of their primary plans, to meet their retirement security goals.

It Pays to Set the Menu: Mutual Fund Investment Options in 401(k) plans

December 11, 2014 Comments off

It Pays to Set the Menu: Mutual Fund Investment Options in 401(k) plans (PDF)
Source: Federal Reserve Board

This paper investigates whether mutual fund families acting as service providers in 401(k) plans display favoritism toward their own funds. Using a hand-collected dataset on retirement investment options, we show that poorly-performing funds are less likely to be removed from and more likely to be added to a 401(k) menu if they are affiliated with the plan trustee. We find no evidence that plan participants undo this affiliation bias through their investment choices. Finally, the subsequent performance of poorly-performing affiliated funds indicates that these trustee decisions are not information driven.

Who’s On Board 2014: Mobility Attitudes Survey

December 11, 2014 Comments off

Who’s On Board 2014: Mobility Attitudes Survey
Source: TransitCenter

In 2013, advocates, planners, and policymakers were abuzz with the 10.7 billion rides taken on transit, an all-time U.S. record. Yet the discussion focused too much on the sheer number of rides, without a deep look at the riders themselves, and particularly the changing attitudes that are propelling recent ridership increases. TransitCenter commissioned this survey to take that deeper look.

We now have a snapshot into perceptions of transit and neighborhoods in 2014. As Millennials take center stage in American life and the Baby Boom generation confronts retirement, both the transit and real estate industries will have to adjust.

New From the GAO

December 11, 2014 Comments off

New GAO Reports and Testimonies
Source: Government Accountability Office

Reports

1. Immigration Benefits: Improvements Needed to Fully Implement the International Marriage Broker Regulation Act. GAO-15-3, December 10.
http://www.gao.gov/products/GAO-15-3
Highlights – http://www.gao.gov/assets/670/667396.pdf

2. SSA Disability Benefits: Enhanced Policies and Management Focus Needed to Address Potential Physician-Assisted Fraud. GAO-15-19, November 10.
http://www.gao.gov/products/GAO-15-19
Highlights – http://www.gao.gov/assets/670/666831.pdf

3. Information Technology: HUD Can Take Additional Actions to Improve Its Governance. GAO-15-56, December 10.
http://www.gao.gov/products/GAO-15-56
Highlights – http://www.gao.gov/assets/670/667359.pdf

4. Transportation for Older Adults: Measuring Results Could Help Determine If Coordination Efforts Improve Mobility. GAO-15-158, December 10.
http://www.gao.gov/products/GAO-15-158
Highlights – http://www.gao.gov/assets/670/667376.pdf

5. Public Transit: Federal and Transit Agencies Taking Steps to Build Transit Systems’ Resilience but Face Challenges. GAO-15-159, December 10.
http://www.gao.gov/products/GAO-15-159
Highlights – http://www.gao.gov/assets/670/667394.pdf

Testimonies

1. NASA: Human Space Exploration Programs Face Challenges, by Cristina T. Chaplain, director, acquisition and sourcing management, before the Subcommittee on Space, House Committee on Science, Space, and Technology. GAO-15-248T, December 10.
http://www.gao.gov/products/GAO-15-248T
Highlights – http://www.gao.gov/assets/670/667351.pdf

2. Unmanned Aerial Systems: Efforts Made toward Integration into the National Airspace Continue, but Many Actions Still Required, by Gerald L. Dillingham, Ph.D., director, physical infrastructure issues, before the Subcommittee on Aviation, House Committee on Transportation and Infrastructure. GAO-15-254T, December 10.
http://www.gao.gov/products/GAO-15-254T
Highlights – http://www.gao.gov/assets/670/667398.pdf

3. Federal Retirement Processing: Applying Information Technology Acquisition Best Practices Could Help OPM Overcome a Long History of Unsuccessful Modernization Efforts, by Valerie C. Melvin, director, information management and technology resources issues, before the Subcommittee on Federal Workforce, U.S. Postal Service, and the Census, House Committee on Oversight and Government Reform. GAO-15-277T, December 10.
http://www.gao.gov/products/GAO-15-277T
Highlights – http://www.gao.gov/assets/670/667372.pdf

Americans Nearing Retirement Are Very Concerned About Health Care Costs, but Few Are Taking Financial Action to Prepare

December 2, 2014 Comments off

Americans Nearing Retirement Are Very Concerned About Health Care Costs, but Few Are Taking Financial Action to Prepare
Source: Ameriprise Financial

The overwhelming majority (86%) of baby boomers express concern about the affordability of health care in retirement, but very few pre-retirees admit they have taken financial steps to prepare for health care costs in retirement, according to a study released today by Ameriprise Financial (NYSE: AMP). The Health, Wealth and RetirementSM study, which surveyed more than 1,000 employed baby boomers ages 50-64 who are preparing for retirement with at least $100,000 in investable assets, asked these individuals about their attitudes toward health, health care costs and the impact each may have in retirement.

When asked what they’ve done to prepare for funding healthcare costs in retirement, only one in five (19%) surveyed say they’ve taken one or more steps to prepare. One-fourth (26%) have reviewed their options but have taken no action and another two in five (40%) have thought about it but haven’t looked into it in detail. Unfortunately, 15% of respondents haven’t begun to consider how they will cover health care costs in retirement.

Retirement Benefit Decisions by City and County Governments

November 21, 2014 Comments off

Retirement Benefit Decisions by City and County Governments
Source: Center for State and Local Government Excellence

Key findings:

  • Workers who work a full career in their city or county can expect a retirement income of between 45 and 80 percent of their pre-retirement income.
  • Career employees of local governments who participate in Social Security can expect retirement income replacement rates of 20 to 30 percentage points higher than employees whose governments do not participate in Social Security.
  • These and other variations mean that many local workers will need to be disciplined about participating in savings plans, outside of their primary plans, to meet their retirement security goals.

Views on the Value of Voluntary Workplace Benefits: Findings from the 2014 Health and Voluntary Workplace Benefits Survey and The Gap Between Expected and Actual Retirement: Evidence From Longitudinal Data (EBRI Notes, November 2014)

November 20, 2014 Comments off

Views on the Value of Voluntary Workplace Benefits: Findings from the 2014 Health and Voluntary Workplace Benefits Survey and The Gap Between Expected and Actual Retirement: Evidence From Longitudinal Data (EBRI Notes, November 2014)
Source: Employee Benefit Research Institute

Executive Summary

Views on the Value of Voluntary Workplace Benefits: Findings from the 2014 Health and Voluntary Workplace Benefits Survey

  • Three-quarters of workers state that the benefits package an employer offers prospective workers is extremely (32 percent) or very (44 percent) important in their decision to accept or reject a job.
  • Nevertheless, 34 percent are only somewhat satisfied with the benefits offered by their current employer, and 22 percent are not satisfied.
  • Eighty-six percent of workers report that employment-based health insurance is extremely or very important, far more than for any other work place benefit.
  • Workers identify lower cost (compared with purchasing benefits on their own) and choice as strong advantages of voluntary benefits. However, they are split with respect to their comfort in having their employer choose their benefits provider, and think the possibility that they may have to pay the full cost of any voluntary benefits is a strong or moderate disadvantage.

The Gap Between Expected and Actual Retirement: Evidence From Longitudinal Data

  • The 2008 economic recession sharply increased the gap between expected and actual retirement. Pre-September 2008, before the investment markets crashed, 83.9 percent of workers retired either earlier or no later than three years after their expected retirement—compared with only 59.3 percent who did so post-September 2008.
  • Longitudinal findings (comparing same cohort at different points in time) show that more people (35.9 percent) actually retired after 65 than expected (18.9 percent), and among those who expected to retire after 65, more than half (56.6 percent) did so. It also shows that 38.0 percent retired before they planned, 48.0 percent retired after they planned, and 14.0 percent retired the year they planned.
  • Longitudinal data also show that people who have a retirement plan tend to retire closer to when they planned, compared with those without a plan. It also found that the gap between expected and actual retirement is generally very small between those with defined benefit plans and defined contribution plans.
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