Benefits October 23, 2012

Workplace Retirement Plans Increasingly Important

October 23, 2012 (PLANSPONSOR.com) – Seventy percent of 9,000 people surveyed in eight European countries and the U.S. believe that workplace retirement plans are “somewhat” or “extremely” important.
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Twenty-two percent expect a defined benefit (DB) plan to be the most important means of preparing for their retirement—compared with 21% who give this importance to government retirement benefits. Only about one in 10 employees expect other forms of personal plans and long-term savings to provide the majority of their retirement income.

The survey found workplace plans remain a central part of many people’s retirement planning: 67% agree with the statement that such plans are “a basic part of any worker’s pay.”This agreement ranges across countries from highs in the U.S. (78%), the U.K. (76%) and the Netherlands (74%) to lows in countries such as France (63%) and Hungary (55%).  

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The idea of shared responsibility was also discovered by the survey; 75% of respondents agreed that funding retirement “should be a balanced approach in which individuals, employers and the government all play an equal role.” A majority of employees in all countries agree that employers should continue to provide for employees’ retirement plans. This peaks at 84% of employees in the Netherlands, the U.K. and the U.S.

While retirement benefits rated lower than basic pay as a tool for employee recruitment and retention (69% of employees view salary as extremely important), 36% thought that having access to a workplace retirement plan with employer contributions was “extremely important.” This peaked in the United States at 49% – compared to 44% in Poland, 42% in the United Kingdom and just 27% in Sweden. 

However, when viewed alongside other non-salary benefits such as life or health insurance, and stock options, company retirement plans ranked highly. The survey found this to be less true in the U.S. where access to public health care is more limited and employees look to employers to make some provision towards the high cost of private medical insurance.  

These findings are in the second report from The Changing Face of Retirement research from AEGON and the Transamerica Center for Retirement Studies. The first report stressed that current workers expect to be worse off in retirement than current retirees (see “Global Outlook for Future Retirement Bleak”).  

The second report is here.
Compliance October 23, 2012

USERRA Lawsuit for NYC Workers Expands

October 23, 2012 (PLANSPONSOR.com) – A federal lawsuit investigating the City of New York’s calculation of pension funds was expanded to include all retired City workers called to active military duty after 9/11.
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U.S. Attorney for the Southern District of New York, Preet Bharara, announced the investigation is to determine if the City workers are receiving the benefits to which they are entitled under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA).

On August 2, the U.S. filed a class action lawsuit against the City, the New York City Policy Department (NYPD), and New York City Pension Fund on behalf of all current and retired NYPD officers who performed active military service since 9/11 or who will do so in the future (see “NYC Sued for Military Member Police Officers’ Pensions”). The lawsuit alleges that the City unlawfully calculates the pensionable earnings of NYPD officers called to military duty by relying exclusively on their base pay-rate instead of including the overtime or night shift compensation they would have earned had the military not mandated their service, as required by USERRA. As a result, service members are being deprived of pension benefits they would have been reasonably likely to receive. 

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The lawsuit seeks to require the City to lawfully calculate pension earnings of all current and former NYPD officers who were called to active duty after 9/11 or who will be called to service, to recalculate the pension benefits they are currently receiving and to remit any additional pension benefits owed as a result.

“Since the lawsuit was filed we have received dozens of inquiries from veterans who worked on other City agencies, prompting the expansion of our investigation,” Bharara said. “Each and every City employee who was called to active military service is entitled to have his or her pension calculated consistent with USERRA.”

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