Introduction
In the United States, public sector pensions are offered by federal, state and local levels of government and are available to most public sector employees. The promise of a pension on retirement is a significant part of government compensation. Public pensions have long been advertised as offering generous, guaranteed benefits for public employees while collecting low and stable contributions from taxpayers (Biggs 2013). The employer contributions to these plans may vest either immediately or after a certain number of years of service and can then be withdrawn or rolled over to another retirement plan if the employee leaves the company. These retirement plans may be defined-benefit (DB) or defined-contribution (DC) pension plans; although defined-benefit plans have been most widely used by public agencies in the U.S. throughout the late twentieth century. Studies show that public sectors find that defined-benefit pension plans are strongly preferred over defined-contribution plans primarily because defined-benefit plans are more cost efficient than defined-contribution plans due to higher investment returns and longevity risk pooling (Pension Rights Center 2011).
According to Mikesell (2011), providing pensions can be expensive, particularly in light of the fact that people are living longer and returns that can be earned on funds invested to finance retirement income have recently been dismal. Public pension funding has become a pressing policy issue in the wake of the financial crisis and given the pending retirement of a large number of baby boomers entering retirement age. The pension crisis has posed financial difficulty in paying for federal, state, and local pensions in the U.S. for several reasons; the pri...
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... face and the downfall companies may continue to experience.
Conclusion
The importance of properly financing state and local government retirement systems has never been greater in the wake of so many pension plan funding catastrophes. It is mandatory that employers balance the responsibility of providing sufficient retirement income in conjunction with controlling the cost to maintain and fund retirement plans. To counter the current pension concerns, over the past 20 years there has been a significant shift in retirement plan structures, from the outdated DB plan to the more modern DB plan. As a result of this change, the primary responsibility for preparing for retirement has been removed from the employer and placed upon employees. This option will help with pension planning going forward, but still does not solve the outstanding pension plan crisis of today.
The push for Congress to pass legislation protecting the rights of employees and their retirement was inevitable. Retirement plans are extremely important for all working individuals. Having funds to keep or exceed ones current standard of living and to enjoy one’s life beyond expectations after retire...
Patrick, C 2004, The Guardian: Australia may hold key to pensions, 12 October 2004, retrieved 21 July 2006
Personal Differences. In this case, Dan Richardson, a partner in Educational Pension Investments (EPI), founded EPI with a philosophy of maintaining low-risk investment portfolios with moderate income; a philosophy that has been in place for 50 years. This risk adverse philosophy found Dan considering the merits of a more aggressive investment approach to offset the fact that EPI’s growth has not kept pace with other investment opportunities. (Whetten & Cameron, 2011)
Throughout the 20th century governmental responsibility has made remarkable progress. One major milestone of the widening of the responsibility of the federal government was it’s making an obligation to care for the elderly and retired in the form of social security. In 1935, the Social Security Act was enacted by the federal government to provide financial security to the elderly, retired citizens in America. Although the federal government first took on this responsibility in 1935, it is still affecting our lives today. However, social security would not have advanced this far without many organizations and individual reformers to begin and improve social security throughout history.
Social Security is a system that was set up in 1935 after the Great depression to help people get through tough times. "Social Security is now used by nearly 44 million Americans"(policy.com). Only people who payed into social security are eligible to collect when they retire. Many people think that they receive the money they pay in but that is not total true. The money that you pay in is used for the people that are receiving it now. "In 1950 there were 16 workers for every beneficiary; today there are only three workers per beneficiary"(policy.com). There is more money going into social security then coming out now. The extra money goes into a trust to be used when it is needed. By the year 2032 those numbers are going to drop. By this time most baby boomers will be retired and collecting social security. This will put a big strain on the funds. There will be more money going out then coming in. And it will not take long to use all the money that is in the trust. By the year 2034 they will only be able to pay 75 percent of the beneficiaries. "The projected average monthly Social Security benefit in 2032 of about 1,100 (in 1998 dollars) would fall to about $800, and would drop further in later years. Average benefits for low-wage earners would drop from $670 to $480"(www.ssab). Theses cut would effect the people just starting to receive benefits and those who are already receiving benefits. And with each year these benefits will decrease. As these benefits continue to decrease "the percentage of aged people living in poverty would rise"(www.ssab).Most people believe this is happening because of the baby boomers generation. There will be more people taking from social security then giving in. By the time my generation is eliable to receive social security there may not be any money to give.
Michael Jones worked his whole life. At the age of 15 he started as a dishwasher at a restaurant a mile away from his house. He never graduated high school because he had to quit school to help his single mom support a family of six. There were many times in his life where he worked two jobs, but at minimum-wage, if that, 80 hours a week still did not go far. By the age of 20 he was married, and soon began to have a family of his own. Michael is a simple man but a hard workingman. Michael rarely took vacations, worked 60+ hours a week, and raised four daughters of his own. After about 25 years of marriage Michael and his wife divorced. Recently Michael turned 65, and against his desire to keep working, his doctor suggested that he retire, due to suffering from two heart attacks, one when he was 50, the other when he was 62. For 50 years Michael has worked many jobs, unfortunately, due to his limited education, he often worked minimum paying jobs. During the first half of this working life he was supporting his family, and Michael was only able to save for retirement after his children had graduated college. Only his latest employer offered pension plan. Now after working his whole life, Michael is left with $305 a month from his pension, and $742 from Social Security. Social Security has become his major source of sustainment. The Social Security Administration (SSA), has become a lifesaver for Michael and most retirees. This paper will attempt to answer how the Social Security Administration came to be, and what it does for the country and its hard working citizens. It will give a brief overview on the history of the administration; what statutes give the agency its authorities; ...
The White House, along with the politically biased Social Security trustees’, argue that Social Security is facing a crisis in that “the currently legislated structure of revenues and benefits, the system will eventually be unable to meet its financial obligations” (Bethel University, 2006, p.344). At its inception in the 1930’s, “there were more than sixteen workers to support each Social Security recipient. Today, there are about three, and in 2031, that number is predicted to dwindle to about two (Driscoll & Konczal, 2009). And the number of retirees is expected to nearly double from about 37 million to around 73 million (Driscoll & Konczal, 2009). So how to pay for this? The White House’s proposed solution is to establish individual retirement accounts which would be gradually phased in for younger entrants into the workforce allowing them “to build a “nest egg” for retirement…” (Bethel University, 2006, p.347) while maintaining the existing structure for those 55 or older. Other seemingly attractive features are ownership and control, the ability to in...
providing retirement benefits to those who have reached the ages of sixty-two or age sixty-five,
"Social Security Should Be Run by the Government" by Institute for America's Future.Capitalism. Noël Merino, Ed. Current Controversies Series. Greenhaven Press, 2010. Institute for America's Future, The Perils of Privatization: Social Security Privatization Cuts Lifetime Benefits; Makes Senior Citizens Vulnerable to Poverty: The Impact in the United States. Washington, D.C.: Institute for America's Future, 2008. Reproduced by permission. .
San Diego has an unfunded pension liability of $2.1 billion. There was the choice of either cutting public goods and services or raises taxes in order to pay for them. There are three events that played a significant role in the pension crisis. The first of these being Proposition 98.
This is better explained by the public servant knowing why he is doing the job and who it is benefiting, socially, and how he is impacting and making a change for the better in their own mind, personal. In the first two “chapters” of Caught between the Dog and the Fireplug, or How to
There are extensive studies on retirement covering education in general. The findings suggest that education is an important factor in affecting retirement planning preparedness (Hogarth, 1985; Joo&Pauwels, 2002). Education enables individuals to explore more information relating to their retirement planning and that sources of information will influence their decisions, attitude and intention to do retirement planning (Hogarth, 1985; Joo&Pauwels, 2002). Also, DeVaney (1995) addressed that the effect of education level may serve as a motivator or guidance for individuals to start the preparation for retirement planning. With the increase in age and educational level, individual tends to be more motivated to work on retirement planning preparation or take some action for their retirement (DeVaney, 1995).
Offering employee benefits is one way a company must competes in today’s marketplace to retain old employees and attracts new ones. These benefit packages may range from offering basic health insurance to additional discretionary and perk benefits such as vacation and retirement packages. Benefit packages are often a large portion of employee costs and Federal mandates require an employer to carry and offer certain benefits even if they offer nothing else. Federally required employee benefits make up approximately a quarter of the costs associated with employer offered benefit packages. Some of these mandated benefits include Social Security, Worker’s Compensation Insurance, and the Family Medical Leave Act.
Social security, since instituted in 1935, has kept many elderly people from running below the poverty line (Hosansky). In 2015, the Social Security Administration predicted that the funds would be depleted by 2034 (Max). This poses a serious threat to the living situation of future generations when they retire. Our elderly, by today’s standards, enjoy a comfortable lifestyle. They are able to retire and still make over one thousand dollars a month. Some people also have private pensions which allow them to live even more comfortably. But with social security funds running out, we must ask the inevitable question. Is it worth having social security anymore? Social security should be kept. One must never fully rely on social security. In addition
Allers, Kimberly Seals. "How Fit Are Your Finances?" Ebony 68.9 (2013): 93-97. Academic Search Complete. Web. 15 Nov. 2013. Bauer, Gabrielle, and John Southerst. "A promising retirement: your life, your way." Maclean's 18 Feb. 2013: 37+. Opposing Viewpoints in Context. Web. 15 Nov. 2013.