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Category: General

Oh Where Oh Where Is My Pension?

Oh Where Oh Where Is My Pension?

It just might be in a state “unclaimed” property fund. A recent research paper issued by the Center for Financial Security of the University of Wisconsin-Madison puts a spotlight on these funds and the many unclaimed retirement accounts in them: “Frictions in Saving and Claiming: An Analysis of Unclaimed Retirement Accounts” by Corina Mommaerts and Anita Mukherjee. In the paper, the authors use data collected from state unclaimed property databases to estimate that nationally in 2016 there were 70,000 unclaimed…

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Did You Know? Crimes Committed By Your Spouse May Be Detrimental to Your Pension

Did You Know? Crimes Committed By Your Spouse May Be Detrimental to Your Pension

Our intuition suggests this cannot be the case. After all, YOU did not commit the crime. However, at least in Texas (and possibly some other states) our intuition would be wrong if the retirement savings were jointly possessed during the marriage. A recent Fifth Circuit Court of Appeals decision makes this point abundantly clear. United States v. Berry, No. 19-20050, 2020 U.S. App. LEXIS 6260 (Feb. 28, 2020) In the Berry case, Gwendolyn Berry was convicted of wire fraud, mail…

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Out of a Job Due to Covid-19? You May Be Eligible for a Fully Vested Pension

Out of a Job Due to Covid-19? You May Be Eligible for a Fully Vested Pension

Most of us would be hard pressed to find anything positive to say about the Covid-19 pandemic. But, if you lost your job on account of the pandemic and were a participant in a pension plan where you had not yet vested in your pension, there may be a wee bit of good news. Under the Internal Revenue Code, participants automatically become vested in their accrued pension benefits upon the termination or partial termination of the pension plan. In the…

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Financial Impacts of Coronavirus Could Significantly Reduce the Social Security Benefits of Persons Who Turn Age 60 This Year

Financial Impacts of Coronavirus Could Significantly Reduce the Social Security Benefits of Persons Who Turn Age 60 This Year

An intriguing working paper authored by Andrew Biggs issued by the American Enterprise Institute posits that the financial impacts of the Coronavirus could significantly reduce the Social Security benefits of persons who turn 60 this year; that is, of persons born in 1960. See “American Enterprise Institute: How the Coronavirus Could Permanently Cut Near-Retirees’ Social Security Benefits.” Biggs explains that, in calculating a worker’s Social Security benefit, Social Security initially indexes the worker’s earnings each year to economywide earnings as…

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Decreasing Fertility and Increasing Life Expectancy Threaten the Solvency of Our Nation’s Social Security Retirement Program

Decreasing Fertility and Increasing Life Expectancy Threaten the Solvency of Our Nation’s Social Security Retirement Program

On November 4, 2019, the Social Security Administration issued a report addressing the funded status of the Social Security retirement program. “Social Security: Demographic Trends and the Funding Shortfall” (Report). The Report’s findings and conclusions should be of great concern to anyone who is, or may be, dependent on Social Security benefits for a comfortable retirement. The Social Security program pays benefits to retired or disabled workers and their families and to family members of deceased workers. It was set…

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Pension Plans May Count Service Different Ways for Different Things

Pension Plans May Count Service Different Ways for Different Things

I frequently receive calls from pension plan participants who are confused about their plan’s rules for counting service for vesting, participation, and determining the amount of the pension. I explain that plans may legally count service differently for each of these things, and that most plans do. A recent case illustrates the point and participants’ confusion. Miller v. Ret. Program Plan, No. 18-6314 (Aug. 22, 2019). Consolidated Nuclear Security LLC (CNS) sponsored a retirement plan for its employees (the Plan)….

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It’s Not Always True That You Must Start Taking Pension Distributions By April 1 of the Year Following the Year You Turn Age 70½

It’s Not Always True That You Must Start Taking Pension Distributions By April 1 of the Year Following the Year You Turn Age 70½

Under the Internal Revenue Code (IRC), participants in tax-qualified pension plans [most pension plans ARE tax qualified] MUST start taking “required minimum distributions” (RMDs) of their pension by April 1 of the year following the year they turn age 70½. This is referred to as the “required beginning date” (RBD), and it is very important because the penalty for failing to take an RMD by the deadline is an onerous 50% tax penalty. Ditto if you fail to take your…

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What Is the Better Strategy For Achieving Retirement Security? Working Longer? Or Saving More?

What Is the Better Strategy For Achieving Retirement Security? Working Longer? Or Saving More?

The National Bureau of Economic Research recently published a working paper that purports to answer this question. [See “The Power of Working Longer,” by Gila Bronshtein, Jason Scott, John B. Shoven, and Sita N. Slavov]. With exhausting technical analysis, the authors demonstrate that working longer is a much more powerful strategy for achieving retirement security than saving more. For example, the authors show that delaying retirement by just one year results in an 8% increase in the standard of living,…

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Latest Social Security Trust Fund Report Is Not Good News for Retirees

Latest Social Security Trust Fund Report Is Not Good News for Retirees

Each year, Social Security’s trustees report on the current and projected financial status of the Social Security trust fund. Their 2018 annual report is worrisome. In a nutshell, the trustees conclude that the Social Security trust fund faces insolvency and resultant benefit cuts by 2034 if changes are not soon made to the program. BackgroundSocial Security actually has two trust funds: the Old-Age and Survivors Insurance (OASI) Trust Fund, which pays retirement benefits and survivors benefits; and the Disability Insurance…

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Can Immigration Help Shore-Up Our Social Security Retirement System?

Can Immigration Help Shore-Up Our Social Security Retirement System?

A paper by the Bipartisan Policy Center (BPC) provides intriguing insights into the role of immigration on our Social Security retirement system. [See “America’s Demographic Challenge: Understanding the Role of Immigration,” Aug. 2017, by Kenneth Megan and Theresa Cardinal Brown]. The U.S. population has been aging rapidly the past few decades, due mainly to declining fertility rates and increasing life expectancies, a trend that is expected to continue. This demographic shift has placed a strain on our Social Security retirement…

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