News

Social Security’s Financial Outlook: The 2018 Update in Perspective
Source: Center for Retirement Research

The brief’s key findings are:

  • The 2018 Trustees Report shows virtually no change:
    • Social Security’s 75-year deficit ticked up from 2.83 percent to 2.84 percent of payroll.
    • Trust fund exhaustion is still 2034, after which payroll taxes still cover about three quarters of promised benefits.
  • This shortfall is manageable, but action should be taken soon to equitably share the burden among cohorts, restore public confidence, and give people time to adjust.
  • One concern is whether the declining fertility rate is a lingering effect of the Great Recession or a permanent shift that could worsen Social Security’s finances.

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Who Is The Retirement Security Initiative
Source: NPPC

Who are the people behind the Retirement Security Initiative’s plan to gut pensions for millions of Americans?

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How Does Divorce Affect Retirement Security?
Source: Center for Retirement Research

The brief’s key findings are:

  • While the divorce rate is no longer rising, about 40 percent of marriages still end in divorce.
  • The financial costs can be high: a divorcing couple pays legal fees, may need to sell illiquid assets, and has to cover the costs of two – rather than one – residence.
  • Not surprisingly, the analysis finds that households with a past divorce are much more likely to be at risk for maintaining their standard of living in retirement.
  • Interestingly, for one divorced group – single women – the impact is negligible, perhaps because higher child care costs are offset by retaining the house as an asset.

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Why Pensions Matter
Source: National Public Pension Coalition

Pensions, in the broadest sense of the term, have existed since ancient Rome. Soldiers in the
Roman army could earn pensions through their military service. The value of these pensions to Roman
soldiers helped to maintain the power of emperors such as Augustus. Pensions for military service have
continued to exist in one form or another in the two thousand years since.

Public pensions for teachers, firefighters, police officers, and other civilian public servants in the United
States are a more recent development. In fact, public pensions as we know them are just over one
hundred years old. Governments began offering pensions because they are the most effective and cost efficient
way for working families to prepare for retirement. Unfortunately, many people today have
forgotten the true value of pensions and why they are so important. This report will explore the history
of defined benefit public pensions in the United States, why they were implemented in the first place,
and why they continue to remain today.

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401(k) Lawsuits: What Are the Causes and Consequences?
Source: Center for Retirement Research

The brief’s key findings are:

  • Employers with 401(k)s are required to administer their plans for the “sole benefit” of workers, a standard that has been the subject of substantial litigation.
  • Recent lawsuits have focused on excessive fees, although inappropriate investment options and self-dealing are other common reasons for suits.
  • Court rulings in these cases often hinge on whether plan fiduciaries follow a “prudent” decisionmaking process, rather than on specific outcomes.
  • Perhaps in part to avoid such litigation, 401(k) sponsors have begun to rely more on low-cost index funds and have taken steps to reduce fees.
  • At the same time, concerns about litigation could dissuade 401(k) sponsors from offering potentially useful innovations, such as lifetime income options.

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Study: Police Officers & Firefighters Are More Likely to Die by Suicide than in Line of Duty
Source: Ruderman Family Foundation

 

A white paper commissioned by the Foundation has revealed that first responders (policemen and firefighters) are more likely to die by suicide than in the line of duty. In 2017, there were at least 103 firefighter suicides and 140 police officer suicides. In contrast, 93 firefighters and 129 police officers died in the line of duty. Suicide is a result of mental illness, including depression and PTSD, which stems from constant exposure to death and destruction.

 

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Modernizing Social Security: An Overview
Source: Center for Retirement Research

The brief’s key findings are:

  • Many policy experts support targeted changes to Social Security benefits for vulnerable groups, such as caregivers, widows, the very old, and low earners
  • Several of these changes have been endorsed by bipartisan groups, which indicates the potential for widespread support.
  • Such changes, by themselves, would raise Social Security’s long-term deficit.
  • But if the cost increases were offset by reducing other benefits, Social Security could be modernized in a way that is both effective and cost-neutral.
  • Further briefs in this series will evaluate the policy options for specific groups in more detail, including potential offsets to cover the costs.
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An Analysis of Retirement Models to Improve Portability and Coverage
Source: Center for Retirement Research

To better understand the challenges of the 401(k) system and its coverage and to assess possible strategies to improve it, this report presents a three-part analysis. The first part focuses on 401(k)s and documents the extent and nature of portability, the flow of money to IRAs, and leakage from both systems. It summarizes resulting problems and potential solutions. But beyond the existing 401(k) system, a coverage gap remains. So, the second part of the analysis identifies the nature of the coverage gap among wage and salary employees and assesses proposed solutions. But these solutions would not affect the 16 percent of workers in non-standard employment. Therefore, the third part of the analysis looks at options for covering these workers.

The objective of this report is to assess and present a wide – though not comprehensive – range of available options by examining and summarizing existing proposals and, where relevant, examples from other countries.

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