Compliance December 6, 2016

DOL Asked to Cease Implementation of Fiduciary Rule

Senator Ron Johnson asked Labor Secretary Tom Perez to cease implementation of a rule “that will very likely be rescinded.”
Reported by

Senator Ron Johnson (R-Wisconsin), chairman of the Senate Homeland Security and Governmental Affairs Committee, asked three top regulators in the outgoing Obama administration to cease implementing especially burdensome new regulations.

In one letter, Johnson wrote to Department of Labor Secretary Tom Perez about the department’s fiduciary rule. In his letter, Johnson noted that in February 2016, he released a staff report showing that the rule will likely increase compliance costs for small-business advisers, increase uncertainty in the markets and decrease the availability for investment advice for low- and middle-income Americans.

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“In light of the significant economic costs on investment markets and the substantial likelihood that the incoming Administration and the 115th Congress will unwind this burdensome regulation, I call on the Labor Department to cease its implementation of its fiduciary regulation. I hope the Labor Department will acknowledge the reality of the situation and avoid imposing unnecessary costs and burdens in further implementation of a regulation that will very likely be rescinded,” Johnson wrote in the letter.

Johnson’s letter about the fiduciary rule can be found here. More information about Johnson’s requests to Obama Administration officials is here.

Data and Research December 6, 2016

Americans Lagging on Retirement Savings

However, a survey finds they are managing bills and debt.
Reported by

Fifty-one percent of Americans worry about their financial situation and only 37% are confident they are track for a comfortable retirement, according to the 2016 EY Financial Wellness Assessment, based on a survey of 4,000 people conducted between August and October.

Asked when was the last time they tried to figure out how much they will need in retirement, 41% said it was within the last 12 months. However, 67% of those between the ages of 18 and 25 have never thought about retirement planning, and 33% of those older than 50 have never tried to figure out how much they will need to comfortably retire.

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Eighty-two percent contribute at least 4% of their salary to retirement savings, yet 14% contribute less than 4%.

Sixty-nine percent said at least a portion of their portfolio is invested in a cash-type investment such as a money market or stable value fund. Conversely, 51% said they would not move their money out of stocks into safer investments in the event of a market downturn.

Forty-one percent are satisfied with their financial situation. However, among those 18 to 25, 35% are dissatisfied with their current financial situation. Exactly half of those between the ages of 50 and 64 are satisfied—representing the most satisfied of all age ranges.

NEXT: Timeliness of paying bills

Seventy-one percent of the respondents said they have never paid a bill late. However, 20% said they were tardy on a bill once or twice in the past 12 months.

Seventy-four percent said their debt is manageable, and 9% are carrying no debt at all. Among those 18 to 25, 66% said their debt is manageable. Among those 50 and older, that jumps to 77%.

Ninety percent said their household spending is less or equal to their household income. “This shows a conscious effort across all generations to effectively manage their cash flow, and having a plan on where to best use the surplus they have will be key to improving their financial health,” EY said.

If an unexpected financial emergency arose, 87% said they are confident they could come up with $2,000. Among those 65 and older, 95% are confident they could come up with these funds. Even 80% of 18- to 25-year-olds said they could access this amount of cash.

Sixty-three percent of those who have credit cards pay the balance in full each month, and 28% pay more than the minimum due. Only 6% pay only the minimum.

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