2011 Retirement Confidence Survey: Workers' Pessimism About Retirement Deepens, Reflecting 'the New Normal'
March 15, 2011 | PR Newswire Association LLC Email Print Free Newsletter
Source: PR Newswire Association LLC
WASHINGTON, March 15, 2011 /PRNewswire-USNewswire/ -- In a sign that Americans are recognizing the realities they face about their chances for a comfortable retirement, the 2011 Retirement Confidence Survey (RCS) finds workers are more pessimistic than at any time in the two decades the RCS has been conducted: More than a quarter (27 percent) of workers now say they are "not at all confident" about retirement, up 5 percentage points from the level measured just one year ago.
Reinforcing that trend, the percentage of workers saying they are "very confident" of a comfortable retirement ties with 2009 at 13 percent—the lowest rate ever measured by the RCS.
The survey also found that roughly a third of both workers and retirees said they had to dip into their savings last year to pay for basic expenses. Significantly, the RCS also found that those with retirement savings—such as a 401(k) or an individual retirement account (IRA)—were far less likely than those without these accounts to tap into their savings.
This is the 21st annual RCS, and is conducted by the nonpartisan Employee Benefit Research Institute (EBRI) and Mathew Greenwald & Associates, Inc., making it the longest-running annual retirement survey of its kind in the nation. Full results of the 2011 RCS are published in the March 2011EBRI Issue Brief, released today and online at www.ebri.org The EBRI website also has several RCS-related fact sheets, online at www.ebri.org/surveys/rcs/2011/. The survey was underwritten by more than two dozen organizations.
"To me, these are positive findings: People are increasingly recognizing the level of savings realistically needed for a comfortable retirement. We know from previous surveys that far too many people had false confidence in the past," said Jack VanDerhei, EBRI research director and co-author of the report. "People's expectations need to come closer to reality so they will save more and delay retirement until it is financially feasible."
Survey co-author Mathew Greenwald, of Greenwald & Associates, said that "Many people are planning to work longer and retire later because they know they simply can't afford to leave the work place—both for the paycheck and for the benefits." He added: "Unfortunately, many retirees also tell us they left the work force earlier than they planned, either because of health problems or layoffs. So it may not necessarily be a bad thing that those who can work longer choose to do so."
VanDerhei noted that the RCS finds that many systemic conditions are forcing Americans to redefine retirement, such as high unemployment rates; federal, state, and local government fiscal crises; rising health care costs; lower investment returns; a surge in the older population, putting stress on social insurance programs such as Social Security and Medicare; longer life expectancies; and various other long-term factors.
California auto insurance rates become cheaper in 2011By Richard Burton
Published: Saturday, February 26th, 2011
Lower cost car insurance coverage policies and lower premiums will be available to the drivers in Californian cities in 2011 along with option to pay as they drive in Los Angeles. The car insurance premium will become cheaper according to many insurance quote providers and local auto insurance companies. As per the recent statistics, the auto insurance quote for a California driver is $1143 in January of this year. This represents a significant drop of 11% from the same time last year. It also represents a whopping 31% drop from what the numbers were in 2009. The California average in January is 20.6% lower than the $1440 national average mark in January. These show that the rates are significantly cheaper in this part of the country, compared to others.
The car insurance quotes in California have gone down year by year for various reasons. One of the most significant reasons is the fact that the number of accidents have gone down substantially over the years in California. The number has come down from 4304 in 2005 to 3075 in 2009. The risk of auto insurance providers is reduced by lower number of accidents which means the premiums are lower making the auto insurance policies much cheaper as well.
Another important reason why the rates are coming down is because of new technology being implemented in California which means DWI, which is driving while intoxicated and DUI, which means driving under influence can be detected more easily. As a result, the risks of auto collision and the insurance claims have come down significantly. The latest form of technology being used by insurance companies in California is PAYD or pay as your drive. As per these policies the premiums for car insurance paid by drivers in California would depend on their mileage and the way they drive. Insurance companies like State Farm Mutual and Auto Club of Southern California have already offered it to some drivers who are willing to get specific technology installed in their vehicles to note their driving patters and mileage. Another example of Los Angeles or California based auto insurance companies which are providing the auto insurance cuts is Mercury which is the 5th largest insurance company in the state. Mercury had announced a few days back that it will slash the insurance rates by as much as 10%. Other companies are also expected to follow suit.
Healthcare Reform Alters Insurance Choices for 2011
Provisions in the health reform law may affect what employer insurance plans offer
By Deborah Kotz
Posted: October 28, 2010
Many people would rather get a tooth pulled than spend hours poring over the coverage details of health insurance plans. But this year, it could really pay off to educate yourself on all the options instead of automatically renewing your old plan. You may be able to take advantage of some benefits that kicked in over the past few months under the new health reform law. If the Affordable Care Act stands as passed, insurance exchanges offering health plans to all will open for business in 2014. In the meantime, insurance companies have been forced to rectify some "unfair practices," such as denying coverage to kids with pre-existing conditions and setting lifetime limits on benefits. But some of these improvements only affect certain plans, which is why you need to grab your glasses and read the fine print. Here's what to look for:
1. Free preventive services. Any new health plan your employer adds to its roster must provide free coverage, without copays or deductibles, for a slew of screening tests, exams, and counseling services. The 50-plus freebie list includes blood pressure screenings, mammograms, cholesterol checks, and vaccines, as well as depression screenings, breast-feeding support for new mothers, smoking cessation counseling, and behavioral assessments for kids. Next year the government may add contraception, maternity care, and pelvic exams to the list. If you simply renew your old plan, you'll probably still have to pay as usual for these services, says Cheryl Fish-Parcham, deputy director of health policy at the nonprofit advocacy group Families USA. That's because plans that were in place before the healthcare law passed in March are exempt. But old plans lose this "grandfathered" status if they make even small changes, including charging significantly higher copays or deductibles, eliminating any previously covered benefits, or decreasing the employer's share of the premium. It's best to verify your own plan's status.
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2. Coverage for adult children. All plans, even the grandfathered ones, must extend coverage to young adults up to age 26 who want to stay on their parents' plan, even if these adults are no longer dependents. The plans don’t have to cover the children of these 20-somethings (nor their spouses), says Sabrina Corlette, a research professor at Georgetown University’s Health Policy Institute. And they can't exclude people with pre-existing conditions like asthma or cancer. The catch? The young people won't be covered if their parents are already on Medicare, and until 2014, grandfathered plans can disqualify them if they can get on-the-job insurance.
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3. Higher premiums. Your costs will probably rise a little more than usual, as employers shell out an estimated 9 percent more in premiums for 2011 (compared to increases of 7 percent in 2010 and 6 percent in 2009), according to Hewitt Associates, a healthcare consulting company in Lincolnshire, Ill. Employees at large firms will be asked to contribute $2,209 toward their annual premium, on average, or nearly $250 more than in 2010, not including copays and deductibles. (Employers' share will average $7,612 in 2011.) More companies are charging premiums on a per-participant basis, rather than based on whether the plan covers an individual or a family. That could make it prohibitive to add those grown children, for example.
4. No more lifetime caps on coverage. As of September, or whenever you renew your plan for 2011, you'll no longer have a lifetime cap on coverage, and that's true even if your plan is grandfathered. Yearly coverage limits have been raised to $750,000 and will rise to $1.25 million in 2011; they'll disappear entirely in 2014. The government has issued waivers, however, to about 30 companies, including McDonald's, that threatened to drop their employee health coverage if they had to raise the caps. These companies, often food service or clothing retailers, offer their low-wage workers plans with low costs but "extraordinarily limited benefits," says Corlette.
New Director Leads AIG CEO Search
By Lilla Zuill
May 29, 2009
A search for a successor to Edward Liddy, chairman and chief executive of AIG, is being led by board member Dennis Dammerman, according to a source familiar with developments.
The search, which is expected to take no more than a few months, is being undertaken after Liddy, picked by federal officials to run American International Group Inc. at the time of the insurer's bailout last September, said he wants to step down. He made the announcement last week.
Dammerman, a retired vice chairman and chief financial officer of General Electric Co., was named to AIG's board last November, also picked by government officials.
He is one of several new directors appointed in recent months. The board is expected to have more new faces soon, with five other directors due to be elected at AIG's annual meeting next month, nominated by trustees of the government's stake of nearly 80 percent of AIG.
An AIG spokeswoman had no comment on Dammerman being appointed to lead the executive search.
Liddy, who took the job for a salary of $1, has recommended to the board that they find two candidates to succeed him, splitting the CEO and chairman roles.
In an interview with Reuters last week, Liddy said he expected the person picked as chairman to be someone familiar with the workings of government, while the CEO post should go to someone willing to commit up to five years to the job.
When Liddy was named AIG CEO last year he was the third person to hold the job in as many months, replacing Robert Willumstad, who succeeded Martin Sullivan in mid-June.
Liddy's eight-month reign at AIG has been marked by two upbraidings he received from lawmakers during Congressional hearings about the company's use of bailout funds, including bonuses paid to executives of a controversial financial products unit.
AIG is in the midst of a massive restructuring, as it tries to sell or spin off both domestic and international assets to raise enough money to pay back about $85 billion borrowed from taxpayers after large losses from derivatives written by AIG Financial Products.
California Commissioner Warns Insurance Agents, Brokers About Scam
May 29, 2009
California Insurance Commissioner Poizner warned California licensed insurance agents and brokers to beware of a scam. According to the Department of Insurance, individuals have been reportedly calling licensed insurance agencies and representing themselves as employees of the California Department of Insurance. These individuals, pretending to be CDI employees, have requested payment for a penalty fee due to not completing a fictitious form that they purport the department sent to the agencies. The same individuals also requested that the insurance agencies provide credit card information over the telephone to make the penalty payment and to avoid cancellation of their license.
Commissioner Poizner warns all agents and brokers that these individuals are not employees of the California Department of Insurance and are attempting to scam insurance agencies for financial gain. It is not the policy, practice or procedure for the California Department of Insurance to request credit card information over the telephone.
If agents and brokers receive a telephone call requesting this information, they are advised not to provide the caller with any personal information including credit card or social security numbers. They also should contact the local law enforcement agency.
Enforcement officials are actively investigating this scam.
Source: CDI
Obama Regulatory Overhaul Features Fed Reserve, FDIC, Consumer Agency
By Jim Kuhnhenn
May 29, 2009
Obama administration is proposing that the Federal Reserve serve as an all-seeing regulator to detect activities that could pose risks to the entire financial system.
Under a plan circulating among key lawmakers, the administration also is recommending a new agency to protect consumers and another aimed at protecting investors and maintaining the integrity of the markets.
The Federal Deposit Insurance Corp. would get expanded authority to unwind troubled bank holding companies and a new government agency would conduct "prudential regulation,'' supervising state and federally chartered depository institutions, bank holding companies and insurance companies.
The sweeping proposals are part of six regulatory overhaul recommendations designed to address weaknesses in the financial system that contributed to the current crisis. People familiar with the plan say details still need to be hammered out. They spoke on condition of anonymity because the proposals aren't final.
"The president is committed to signing a regulatory reform package by the end of the year and officials at the White House and the Treasury department are continuing work with Congress on the final phases of a proposal,'' White House spokeswoman Jen Psaki said. "But there is no final proposal in place and any announcement will not be for a couple of weeks.''
Obama will be traveling in Europe and the Middle East next week.
Treasury Secretary Timothy Geithner and other administration officials have discussed the regulatory proposals in the past. But the plan circulating on Capitol Hill indicated that the ideas are beginning to come together into a formal package for Congress to consider.
The plan to create two protection agencies -- one for consumers and the other for investors -- appears to address a potential turf fight with regulatory agencies.
The consumer protection agency would focus on financial products but exclude securities, defusing objections raised by Securities and Exchange Commission Chairman Mary Schapiro. Last week, Schapiro said any new agency whose oversight would include mutual funds, a form of securities, would chip away at the SEC's powers. She said that giving any new entity authority over mutual funds would lessen the government's protection of investors, her agency's core mission.
The investor protection function could be carried out by an agency that merges the SEC and the smaller Commodity Futures Trading Commission, which oversees the trading of oil, gas and other commodities.
By expanding the FDIC's role, the administration would give the government a centralized means for addressing failing banking institutions. Scores of bank holding companies, such as Citigroup Inc. and Bank of America Corp., fall under the supervision of the Federal Reserve. The FDIC now can take over and resolve only the subsidiaries of bank holding companies that take federally insured deposits.
FDIC Chairman Sheila Bair earlier this month suggested to Congress that it give her agency new authority to take over and resolve bank and thrift holding companies-- before the overall revamp of financial rules is finished. That stirred a sympathetic response from several members of the Senate Banking Committee.
Lawmakers have been divided on whether the Fed should act as an overarching "systemic risk regulator,'' with some arguing that such a task would stretch the central bank too thinly. Both Bair and Schapiro have objected to making the Fed alone the new supercop for "too-big-to-fail'' financial companies.
Bair has advocated the notion of a "systemic risk council'' to monitor large institutions against financial threats, to include Treasury, the Fed, the FDIC and the SEC. Schapiro favors that idea, saying she's concerned about an "excessive concentration of power'' over financial risk in any single agency.
Scott Talbott, senior vice president of the Financial Services Roundtable, said his industry group opposes the creation of a consumer protection agency that focuses on financial products, but welcomes overall regulatory changes.
"It is comprehensive and necessary to strengthen the system to prevent this from happening again,'' he said.
___
Associated Press writer Marcy Gordon contributed to this report.
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