Benefits July 22, 2013

Is Your Retirement Seminar Really Helping?

July 22, 2013 (PLANSPONSOR.com) – An analysis of pre-retirement planning programs offered by five large employers showed they improved financial and pension literacy and changed employees’ reported retirement plans.
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A survey conducted immediately after attending a seminar, indicated participants had a very positive experience and believed the seminars are helpful, according to a working paper from the National Bureau of Economic Research (NBER) about the study. Ninety-five percent of respondents stated the programs provided all or most of the information needed for them to make important retirement decisions.

Eighty-six percent of respondents rated the programs very good or excellent, and 93% found the presenters and program leaders to be very good or excellent. Eighty-seven percent of respondents reported believing they will be able to make better retirement choices after participating in the seminar.

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Seventy-two percent of individuals reported the programs raised their awareness of the benefits provided by their employers. Accordingly, participants gave high marks to the quality of the programs, believing that the programs provide the information they needed, and gave their employers credit for offering these programs.

According to the researchers, “Based on our assessment of these initial data, employer-provided financial education programs can increase employee knowledge of retirement programs and assist them in making better retirement choices. This enables their employees to achieve a more desirable retirement. Also, to the extent that the firm has designed its pension plan to optimize employee retention and the age structure of its workforce, the seminars enhance the probability that these corporate goals will be achieved.”

More information about “Golden Years or Financial Fears? Decision Making After Retirement Seminars,” including how to obtain a copy, is here.

Administration July 22, 2013

Judge Orders Detroit’s Bankruptcy Be Withdrawn

July 22, 2013 (PLANSPONSOR.com) – A Michigan judge has ordered that Detroit’s federal bankruptcy filing be withdrawn to protect retirement benefits.
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Judge Rosemary Aquilina of the Ingham County Circuit Court ruled last Friday that Michigan Governor Rick Snyder and Detroit Emergency Manager Kevyn Orr violated the Michigan state constitution, according to the Detroit News. Aquilina said that while state law guards against retirement benefits being diminished, she cautioned there will be no such protection in federal bankruptcy court.

In speaking about her ruling, Aquilina said in the news report, “It’s absolutely needed.” She recommended that Snyder review the relevant portions of the state constitution and hoped that he would reconsider his actions after doing so.

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In response to the ruling, Michigan Attorney General Bill Schuette filed an application for an appeals court consideration on behalf of Snyder. According to the news report, Schuette asked the appeals court to put a hold on present and future lower-court proceedings and is planning to seek emergency consideration to expedite the process.

Prior to the bankruptcy filing last week, Detroit’s two pension systems (the General Retirement System and the Police and Fire Retirement System) filed a lawsuit against Snyder and Orr to prevent it. Orr has proposed to restructure Detroit’s debt and cut the pension benefits of thousands of city employees. (“Pension Systems Oppose Detroit’s Bankruptcy”).

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