Deals and People December 9, 2004

Chao to Stay as DoL Secretary

December 9, 2004 (PLANSPONSOR.com) - President Bush has asked US Department of Labor (DoL) Secretary Elaine Chao to stay in her post during his upcoming second term.
Reported by

White House press secretary Scott McClellan announced Thursday that Bush spoke with Chao to make sure she was agreeable to remain in the Cabinet, the Associated Press reported.

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As DoL Secretary, Chao frequently impacts benefits and retirement services professionals since DoL is a prime enforcer of federal benefits laws. Under Chao is the Employee Benefits Security Administration, headed by Assistant Secretary Ann Combs.

Confirmed by the United States Senate on January 29, 2001, Chao was the first Asian-American woman appointed to a President’s cabinet in US history.

Before taking the DoL post, she was:

  • deputy secretary at the US Department of Transportation
  • chairman of the Federal Maritime Commission, and deputy maritime administrator in the US Transportation Department.
  • Peace Corps director.

Previously, Chao also worked as vice president of Syndications at BankAmerica Capital Markets Group and as a banker with Citicorp.

She received an MBA from the Harvard Business School and her undergraduate degree in economics from Mount Holyoke College. Chao is married to US Senator Mitch McConnell of Kentucky.

Benefits December 8, 2004

Boomers, Xers Optimistic but Still Scrambling for Retirement Nest Egg

December 8, 2004 (PLANSPONSOR.com) - Three quarters of those in a new survey said they were at least somewhat prepared for retirement in terms of their savings/investments.
Reported by

A news release about the latest Allstate Retirement Reality Check found that 74% of respondents thought they were at least on their way to retirement financial security – roughly flat when compared to answers to the same question in 2003 (75%) and 2002 (74%) (See A “Reality Check” for the Allstate Reality Check ).

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At the same time, more than half of Baby Boomers (53%) and four in 10 (44%) of Gen-Xers also said they have stepped up their retirement savings in recent years to catch up to where they believe they should be – a slight increase from 2003, according to Allstate.

“The significant gap between what people believe and how they are acting is troubling, because it suggests that too many Americans plan to retire and just hope for the best,” said Casey Sylla, president, Allstate Financial, in the news release “Hope is not a substitute for having a well thought-out plan for retirement and sticking to it.”

Gen X respondents generally showed increasing optimism as well. For example, 43% of Boomers and 34% of Gen-Xers said they likely will have to put off retirement because of the recent economic downturn. That’s significantly better than 2003 when more than half – 59% of Boomers and 56% of Gen-Xers- said they expected to postpone stopping working.

Both Baby Boomers and Gen-Xers said they expect to work for pay after retirement. The 2004 survey found that 76% of Boomers and 72% of Gen-Xers expected to keep getting a paycheck, compared with 61% of Boomers and 55% of Gen-Xers a year ago. Specifically, 41% of Boomers and 47% of Gen-Xers said they’ll likely work after retirement because they’ll need the health benefits; a year ago, a third (29%) of both generations said that. Some 42% of Boomers and 44% of Gen-Xers said they’ll work to make ends meet – up from 2003 when only 26% of Boomers and 23% of Gen-Xers said the same.

Among Boomers, 38% said they plan to use Social Security for a large part of retirement income, up from 29 % in 2003. At the same time, 66% of Boomers admitted they do not believe the federal government will make the necessary changes in Social Security to ensure their retirement needs are met. Last year, 64% of Boomers said they lack confidence in Social Security. Some 60% of Boomers admitted that Social Security benefits being cut or eliminated is a major concern – up from 25% in 2001.

This year, 64% of Boomers surveyed said that rising health-care costs is a major concern about retirement, up from only 39% when the survey began in 2001.

Allstate pursued the fourth annual Allstate Retirement Reality Check survey in conjunction with Mathew Greenwald & Associates, who polled 1,604 people born between 1946 and 1978 with household incomes of $35,000 or more. Retirees were accepted with incomes of at least $20,000. In 2001 and 2002, the survey measured Baby Boomers – people born between 1946 and 1964. This year and last, the survey was expanded to include Generation X, those born from 1965 to 1978. An additional generation was included in this year’s survey, the Silent Generation, born before 1946.

An executive summary of the survey results is at http://www.allstate.com/Media/NewsHeadlines/pr_2004/images/2004_12_08_rrc_exec.pdf .

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