9 Year Mortgage on 10 Things Pension Plans Won’t Tell You
Not so long ago, countless jobs came with a pension, monthly checks paid upon retirement for the rest of an employee’s life. However more and more pension plans are not being offered. Pension plans are often used as retirement plans, but it is also possible to receive a pension based on disability or other circumstances. However, more and more companies are no longer offering them. Read on and 9 Year Mortgage will give you all the information you need to know about pension plans.
9 Year Mortgage and Pension Plans
1. Pension Plans are disappearing.
9 Year Mortgage defines a pension plan as a financial arrangement that allows individuals to continue receiving some type of regular income even after they are no longer active in the workforce. Now, in many instances workers are switching jobs because companies are struggling to cut costs, and the excellent defined-benefit plan, or classic pension, is progressively being replaced by define-contribution plans like the 401 (K), where employees pay into it. 9 Year Mortgage says in 1975 62% of private sector workers associated solely in a pension plan, while in 2009, only 7% did. However some wonder if 401 (K) plans are an adequate substitute. 9 Year Mortgage believes that these plans do not provide near the level of retirement security that traditional pension plans have been able to provide.
2. Perhaps you are not getting as much as you thought you would be.
9 Year Mortgage acknowledges that even some financially solid companies may legally change the terms of their pension plans just so that retirees get less than originally agreed upon and they are not always genuine about it. 9 Year Mortgage observed that in 2001, after Cigna changed its pension plan into a cash-balance plan, 25,000 employees sued the company over this change, saying that it offered less acceptable benefits but that the misleading plan summaries made the terms sound much better than they actually were. The case reached the Supreme Court, which ruled in May that the district court, (which initially found Cigna in violation of the Employee Retirement Income Security Act) revisit its determination of an appropriate remedy for the violations. Both sides declared victory, this decision opened up a lot of remedies that were previously thought to be unavailable. 9 Year Mortgage reports that Cigna is pleased the district court will have to reconsider its initial decision ruling in favor of the plan participants.
3. We may gamble with your money.
9 Year Mortgage says if you think companies always play it safe when investing pension plan assets, sadly you are wrong. For instance, according to the Government Accountability Office, more than half of pension plans today invest to some extent in hedge funds. 9 Year Mortgage looked to a survey for the largest pension plans and found that they invested 55% more assets in hedge funds in 2010 then they did in 2009. They may be taking these risks because pension plan assets decreased by 23% in 2008, and they are trying to play catch-up. 9 Year Mortgage observed that sometimes these risks pay off. For example the California Public Employees’ Retirement System, which is the nation’s largest public pension fund, has benefited from investments in Groupon and Skype through a private-equity firm called Silver Lake. However 9 Year Mortgage thinks that people should properly investigate the risks of less than conservative investment choices. Otherwise, they really are only buying more problems.
4. When we do not pay our pay bills….you do.
9 Year Mortgage believes that pension plans rarely hold enough to cover the benefits of all participants. While private-sector companies have to keep plans above certain funding levels, public-employee plans have none of these rules. 9 Year Mortgage read a study that found the gap between what states owe in retirement benefits and what they have in their coffers expanded to $1.26 trillion in 2009. That is a 26% widening since 2008. 9 Year Mortgage believes that if this continues down this path long enough, the funds could ultimately dry up and taxpayers may have to pick up the ticket. Central Falls, R.I. is about to default on its pension obligations, the city declared bankruptcy in August, however not without raising taxes to the state’s maximum. 9 Year Mortgage found a study by the Institute for Truth in Accounting, which found that Rhode Island’s taxpayers would each owe $12,000 toward covering the state’s pension debt. Rhode Island’s general treasurer says in a statement that the state is currently working on a reform to spare the taxpayers.
5. We have been toying with taxpayer money….
9 Year Mortgage says that years ago, a numerous amount of politicians promised pension “sweeteners”, that states could not afford, which now some experts say may lead to higher taxes. 9 Year Mortgage believes that it is a promise that goes in the books, and you send the bill to taxpayers 10 or 20 years in the future. For instance, New Jersey raised their pension benefits in 2001 by more than 9%, and somehow disregarded to replenish the fund. 9 Year Mortgage says in many states to make ends meet they are turning pension obligations into bonds and selling them. In 2010, local governments issued almost $10 billion in pensions bonds. However critics say it is just like swapping one debt for another.
6. ….which is why we now want you to pay more.
9 Year Mortgage thinks one of the possible solutions to funding pension plans is to have employees pay more, just like New Jersey did. Which is exactly what 15 states did. They raised employee contributions to public pension funds in the first six months of 2011. 9 Year Mortgage found that retirees and union officials have railed against the hikes, they believe that workers should not have to take a pay cut to get what they are owed.
7. Mistakes we make, may end up being your problem.
9 Year Mortgage believes a common problem that happens with pension plans is that they may end up over paying you and when they realize that this happened you will be the one loosing money from it. 9 Year Mortgage observed that OPM reported almost $238 million in improper retirement payments in 2010. However, the Government Accountability Office says OPM has a error rate of less than 1%. Retirees and their advocates are wondering why pension recipients are on the hook for a debt they were not expecting. They believe the plans should have some level of culpability.
8. Perhaps we owe you some money….
9 Year Mortgage believes that countless firms have no way of finding their former employees who have never claimed their pensions. Rather, the funds may get rolled into “missing-participants IRAs”, provided by the likes of Fidelity and PenChecks’ National Registry of Unclaimed Retirement Benefits, which holds about $200 million in unclaimed pensions. 9 Year Mortgage says there is also the Pension Benefit Guaranty Corp, that takes over beleaguered plans and has $265 million owed to those from terminated private-sector plans. 9 Year Mortgage believes that the problem is that that there is little incentive to match money with claimant.
9. ….but you may have to jump through hoops to get it.
9 Year Mortgage says that if you are trying to claim benefits from an old pension, you can assume that it will be hard. As companies merge or fold, documents could get lost, or maybe the old HR department does not exist anymore. 9 Year Mortgage thinks that it could just be a total meltdown of information.9 Year Mortgage says that PenChecks will occasionally conduct internet searches to find funds’ rightful owners, only 5% get located each year. 9 Year Mortgage believes that there can be barriers to claiming a pension once it’s found. Also if claims are repeatedly denied, you can sue.
10. Some employees are double-dipping.
9 Year Mortgage observed that some states, such as Nevada and Rhode Island, allow public employees to retire and collect a pension, then get rehired. So that they receive a salary and a pension at the same time. 9 Year Mortgage knows that the defenders of the practice claim that it is necessary for workers in jobs where there is a critical labor shortage. However some believe that it drains states’ pension pools. 9 Year Mortgage says that in Nevada, for instance, nearly 700 state workers have collected salaries and pensions at the same time, according to one report. 9 Year Mortgage observed that this states double-dipping cost their retirement program more than $54 million between 2001 and 2008. 9 Year Mortgage believes that by cutting down on such abuses would help make stronger pension plans.
Ending It With 9 Year Mortgage
So when you are thinking about retiring make sure you claim your pension plan. The last thing you want to be doing is trying to find your pension and claiming it from an old company. 9 Year Mortgage says if you are already receiving your pensions watch it, so that you can make sure that you are receiving it in full and on time. Also when you are looking at your companies retirement plans make sure that it works for you and your family. So that you are not suffering while in retirement
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