Previous article on Pension is here. Please read that article first then continue reading it here.
We have covered lot of other sectors so why leave pension or retirement alone. After all in your later years this is the only thing that comes handy your pension, 401K etc. Let us review….
Employers cutting back 401(k) plans, study shows
Reuters,
June 22, 2009: 12:01 AM ET
NEW YORK (Reuters) - A quarter of U.S. employers have eliminated matching contributions to employee 401(k) retirement plans since September to save money amid the economy’s downturn, according to research released Monday.
–But don’t worry if you have seen losses on your pension statement..they are guaranteed like many other things such as FDIC for your accounts..these too are guaranteed.
Pension guarantor: unprecedented deficit
Pension Benefit Guaranty Corp. faces $33.5 billion deficit. Congressional Committee for Aging investigates causes, including former director’s relationship with big banks.
By Aaron Smith, CNNMoney.com staff writer
Last Updated: May 20, 2009: 10:33 AM ET
NEW YORK (CNNMoney.com) — The Pension Benefit Guaranty Corp., which guarantees private pension payments for 44 million Americans, said on Wednesday that it faces a massive, unprecedented deficit.
The PBGC reported a $33.5 billion deficit for the first half of fiscal year 2009, a period that ended on March 31. This means the agency could have problems paying back pensioners in the event that their private plans fail. he agency said the first half of the fiscal year added $22.5 billion to its prior deficit of $11 billion. The PBGC said it now faces the largest deficit since it was founded it 1974.
Insolvencies fuel shortfall in US pensions agency
By Norma Cohen in London,
Published: May 20 2009 21:29 | Last updated: May 20 2009 21:29
The US government agency that insures the defined benefit pensions of private sector workers is facing a $33.5bn deficit, the largest in its history, following a surge of insolvencies among companies with under funded pension schemes.
As of March 31, the agency’s shortfall had roughly trebled from its level at the end of the last fiscal year in September, Vince Snowbarger, acting director of the Pension Benefit Guarantee Corporation, said in testimony prepared for the Senate special committee on ageing. About half the increase came from under funded plans it has either taken over or expects to take over shortly.
Separately, the Government Accounting Office said in testimony prepared for the same hearing that the PBGC had no government guarantee. “In the event that PBGC were to exhaust all of its holdings, benefit payments would have to be drastically cut unless Congress were to take action to provide support,” said Barbara D.?Bovbjerg, director of education, workforce and income security. The PBGC is slated to pay benefits to about 1.3m people who have retired or will do so soon.
–If you’re under 30 or so…well your retirement slate has been wiped clean probably. …
Decade of Losses Force Investors in Their 30s to Start All Over
By Charles Stein
April 15 (Bloomberg) — Jason Woodward has barely broken even after dutifully pumping money into his 401(k) retirement account for about 10 years. I may be a little bit ahead, but not much,” said Woodward, 39, an employee of United Construction & Engineering Inc. in Torrington, Connecticut.
He’s better off than many 401(k) investors in their 30s who began saving a decade ago, according to data compiled by the Center for Retirement Research at Boston College. A median- income worker who put 9 percent of salary into an all-stock plan would have finished the decade ended March 31 with almost $10,000 less than he or she invested, a loss of 26 percent, the center found. With investments divided equally between stocks and bonds, the drop would have been 3.9 percent.
Philly,
City finances in trouble, Mayor calls for spending cuts < good luck Philly >
Mayor Nutter today announced that the city faces a $450 million funding shortfall over the next five years, due to lower than expected business privilege tax revenues and poor performance by the city pension fund.
Fed wants to keep AIG secrets
A top official tells Congress he opposes unmasking the Wall Street firms that have pocketed tens of billions of dollars in taxpayer bailout funds.
Colin Barr, senior writer.
March 5, 2009: 12:50 PM ET
One of those companies got $30 billion from the New York Fed for the purpose of buying so-called collateralized debt obligations, the bundles of risky debt sold on Wall Street. AIG had promised to make the CDO owners whole in case of any losses via the sale of credit default swaps.
Kohn said Thursday that the Fed and other government agencies acted because “we believe we had no choice if we are to pursue our responsibility for protecting financial stability.” He said the beneficiaries of federal support of AIG included “pension funds, households, businesses and people with 401(k)s” < there you go… your pension, 401k is all safe with AIG keeping it secret…. hope you feel better now >
- not just big firms on Wall Street. “We have put in approximately $170 billion to $180 billion into one corporation, and you are telling us the counterparties that got par for their bonds or whatever — the American taxpayer shouldn’t know who they are?” asked Sen. Jim Bunning, R-Ky.
Pension-Deals Scrutiny Spreads
Indicted N.Y. Political Adviser’s Firm Secured Business in Another State
APRIL 20, 2009, 4:02 A.M. ET
A firm affiliated with Hank Morris, the political adviser indicted last month on allegations of extracting improper fees in exchange for investments from New York state’s pension fund, helped investment firms secure business in at least one other state, according to people familiar with the matter.
Private-equity firms Quadrangle Group and Carlyle Group, whose names have already surfaced in connection with the alleged pay-to-play case involving New York’s public pension fund, used the placement firm Searle & Co., with which Mr. Morris was affiliated, to get investments from a government-run fund in New Mexico, according to a spokesman for the New Mexico fund.
Neither Quadrangle nor Carlyle has been accused of wrongdoing and both have said they are cooperating with the New York investigation and aren’t targets of
it. Searle hasn’t been accused of wrongdoing.
New York Bans Agents, Lobbyists in State Pension Investments < after all the damage is done excellent !! >
By Michael Quint
April 22 (Bloomberg) — New York banned the use of placement agents, lobbyists or other paid intermediaries in investments by the state’s $121.9 billion pension fund, State Comptroller Thomas DiNapoli said.
DiNapoli, the sole trustee of the New York State Common Retirement Fund, announced the action after state and federal authorities earlier this month accused Hank Morris, an adviser to former comptroller Alan Hevesi, of posing as a placement agent in a pay-to-play operation where private equity firms and hedge funds provided kickbacks to manage pension funds. Former Deputy Comptroller David Loglisci was also charged in the ongoing investigation.
Fund Manager Pleads Guilty in New York Pension Probe (Update3)
By Erik Larson and David Scheer
April 15 (Bloomberg) — Barrett Wissman, a Dallas hedge fund manager, pleaded guilty to securities fraud as part of an investigation of corruption at New York’s $122 billion pension fund, state officials said.
Wissman, 46, an executive of HFV Asset Management LP, also agreed to a $12 million settlement as part of the probe of illegal kickbacks to arrange pension- fund investments for hedge funds and private-equity firms, according to New York Attorney General Andrew Cuomo. Today, Cuomo announced charges against former New York State Liberal Party Chairman Ray Harding as part of the two-year-old investigation.
GM Pension Vow May Be ‘Garbage’ as $16 Billion Is Threatened
By Holly Rosenkrantz
April 8 (Bloomberg) — Den Black, a retired General Motors Corp. engineering executive, says he’s worried and angry. The government-supported automaker is going bankrupt, he says, and he’s sure some of his retirement pay will go down with it.
“This is going to wreck us,” said Black, 62, speaking of GM retirees. “These pledges from our companies are now garbage.”
As the biggest U.S. automaker teeters near bankruptcy, workers and retirees like Black are bracing for what may be $16 billion in pension losses if the Pension Benefit Guaranty Corp. has to take over the plans, according to the agency. As many as half of GM’s 670,000 pension-plan participants might see their benefits trimmed if that happened, an actuary familiar with the company’s retirement programs estimates.
Investment losses hit public sector pensions < Govt. employees yes ! you’re public sector pay attention >
By Deborah Brewster in New York
Published: April 7 2009 19:59 | Last updated: April 7 2009 19:59
The crisis facing pension plans for US state and municipal employees is deepening as investment losses deplete the resources of retirement funds for teachers, police officers, firefighters and other local government workers.
The largest state and municipal pension plans lost 9 per cent of their value of more than $2,000bn in the first two months of this year, according to data from Northern Trust. That followed a loss of 30 per cent in 2008, equal to about $900bn. Smaller funds, which underperform the larger ones, lost more, experts say.
Double blow for US pensions as values crash
By Deborah Brewster in New York
Published: April 7 2009 19:56 | Last updated: April 7 2009 19:56
The collapse in value of US state and local government pension plans is a disastrous double blow for them: they are being forced to sell off assets at huge discounts to pay out pensions, and are at the same time seeing their funding levels plummet to dangerous new lows.
In the past year the funds, whose collective $2,000bn-plus in assets make them key investors in every asset class, have lost about 40 per cent of their value through investment losses.
401(k) Plans Need Fixes, Advocates Tell Lawmakers (Update1) < No shit >
By Jeff Plungis
March 16 (Bloomberg) — U.S. lawmakers should reform retirement plans after 401(k) and Individual Retirement Accounts lost more than $2 trillion in value since October 2007, a group of consumer and labor groups said.
The new consumer-labor group, “Retirement USA,” backed by the Pension Rights Center, the Service Employees International Union and the Economic Policy Institute, said the flagging economy has highlighted the inadequacies of 401(k) plans and increased the need for alternatives such as government-managed funds run with professional oversight.
Hidden Pension Fiasco May Foment Another $1 Trillion Bailout
By David Evans
March 3 (Bloomberg) — The Chicago Transit Authority retirement plan had a $1.5 billion hole in its stash of assets in 2007. At the height of a four-year bull market, it didn’t have enough cash on hand to pay its retirees through 2013, meaning it was underfunded to the tune of 62 percent.
The CTA, which manages the second-largest public transit system in the U.S., had to hope for a huge contribution from the Illinois state legislature. That wasn’t going to happen. Then the authority found an answer.
CalPERS to seek improved corporate governance, stricter Wall Street rules
By Marc Lifsher,
February 9, 2009
Reporting from Sacramento — The nation’s biggest public pension fund, which has lost more than a quarter of its value in the last seven months, is planning to rally big investors nationwide to demand changes in the way Wall Street operates.
Such moves, she said, will be a vital part of CalPERS’ efforts this year to boost its financial performance. The $174.1-billion fund has lost $65 billion across its investment portfolio since July 1.
CalPERS’ losses in residential real estate have been particularly deep; those holdings fell 35% to $6.08 billion in the year that ended June 30. Its $970-million stake in a failed Santa Clarita project, LandSource Communities Development, is threatened by bankruptcy.
–This is even better can’t retire early so can’t get your money early either…it will remain much safer..much longer….in the hands of those who are controlling it….feel better again.
Pension reforms are signed into law Retirement age to increase to 62
Tuesday, September 30, 2008 ,
BY CLAIRE HEININGER
Star-Ledger Staff
The legislation signed yesterday will raise the retirement age for new public employees from 60 to 62, bar pensions for new workers earning less than $7,500 and eliminate one state holiday, Lincoln’s Birthday, after contracts expire in 2011. It will also bar public employees from using time worked in other states to reach the 25 years of employment needed to qualify for lifetime health benefits from New Jersey.
Government obligations for Social Security and Medicare may soon exceed the combined net worth of every household and nonprofit organization in the country.
[Related content: retirement, Social Security, Medicare, health care, Federal Reserve]
By Scott Burns
YRC Worldwide to seek $1 bln in bailout funds
Reuters
May 15, 2009: 08:44 AM ET
CHICAGO (Reuters) - No. 1 U.S. trucking company YRC Worldwide Inc plans to seek $1 billion in federal bailout money to help it cover its pension obligations, a spokeswoman said Friday.
The company, which has been shedding jobs and closing facilities to cut costs in the face of a brutal U.S. recession faces an estimated $2 billion in pension obligations over the next four years, spokeswoman Suzanne Dawson confirmed
More U.S. Employers Reducing 401(k) Match, Study Says (Update2)
By Jeff Plungis
March 25 (Bloomberg) — U.S. companies are cutting back matching contributions to employee retirement plans to save cash, and the trend is growing, according to a survey by Spectrem Group.
The survey of 150 U.S. companies found that 34 percent have reduced or eliminated retirement-plan contributions since January 2008. In the next 12 months, 29 percent intend to scale back or eliminate their match, the survey showed.
CalPERS investment chief sees ‘no place to hide’ in the markets
Joseph Dear prepares to take over as the pension fund seeks to shore up its ability to pay benefits amid losses.
By Marc Lifsher,
February 2, 2009
Fixed pensions “are a major tool for securing economic security in retirement,” he said. “It’s of interest to everyone in the country and the state of California.”
But from the viewpoint of non-government workers, the risk is that CalPERS’ investments won’t be sufficient to cover promised benefits — leaving taxpayers to pony up, at a time when their own retirement savings have dwindled CalPERS already has warned state and local government units that they may have to increase contributions to the fund to preserve promised benefits if the portfolio doesn’t recover.
Boomers: 30% underwater
Many of those nearing retirement will have very little to live on thanks to an erosion of home equity.
By Les Christie, CNNMoney.com staff writer
Last Updated: February 26, 2009: 3:21 PM ET
Who’s minding your retirement plan?
Survey finds some 401(k) sponsors aren’t doing enough to monitor their plans
By Robert Powell, MarketWatch
Last update: 1:04 p.m. EDT March 26, 2009
BOSTON (MarketWatch) — In good times, when markets are rising and retirement security is a given, very few workers question or care whether their 401(k) plan’s fiduciary is doing their job or not. But these days, it’s a valid question and concern, especially in light of a distressing survey.
Just 58% of some 275 plan sponsors maintain minutes of retirement plan meetings, according to a recent survey conducted by Grant Thornton, an accounting and consulting firm, along with Plan Sponsor Advisors and Drinker Biddle & Reath.
JPMorgan Said to Delay Contributions to Employees’ 401(k) Plans
By Josh Fineman
March 26 (Bloomberg) — JPMorgan Chase & Co. will delay contributions to 401(k) retirement plans for salaried employees until the end of the year and may reduce the payments, according to a person who received a company memo on the changes.
Workers making $50,000 to $250,000 annually will cease getting the contributions every two weeks and may see the benefits adjusted to a yet-to-be-decided amount, according to the person, who declined to be identified because the New York- based bank hasn’t disclosed the new policy. The dollar-to-dollar match for those earning less than $50,000 won’t change, the person said.
Pension Benefit Guaranty’s Deficit Triples to $33.5 Billion
By Holly Rosenkrantz
May 20 (Bloomberg) — Pension Benefit Guaranty Corp.’s deficit tripled to $33.5 billion in the past six months as companies canceled retirement plans in the U.S. recession, the head of the government-owned corporation said.
About $11 billion is for “completed and probable terminations” of company plans and $7 billion is from an increase in interest rates that boosted liabilities, Vince Snowbarger, the acting PBGC director, said in written testimony to be delivered today to the Senate Special Committee on Aging.
The PBGC, set up to protect the employee pensions of bankrupt companies, will tell Congress that its financial condition may worsen amid the likelihood for more pension plan failures. In the first half of the fiscal year that began in October, the PBGC took on almost four times the number of participants as it did in all of 2008.
US pension fund sues rating agencies over $1bn losses
Toxic products were given AAA rating, says Calpers
By Stephen Foley in New York
Thursday, 16 July 2009
Calpers, the California state employees’ pension fund and one of the most powerful fund managers in the US, is suing the three main credit rating agencies, saying they were negligent when they gave gold-plated ratings to mortgage derivatives that have since turned toxic.
The lawsuit adds to the growing pressure on the agencies – Standard & Poor’s, Moody’s and Fitch – over their role in inflating the credit bubble that turned spectacularly to bust.
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