French Senate confirms pension reform bill

This ought to go over like a lead balloon. BBC:

The French Senate has passed a controversial pension reform bill, which has caused a series of strikes and protests around France.

The senators approved President Nicolas Sarkozy's plan to raise the retirement age from 60 to 62, and it could become law as early as next week.

Mr Sarkozy says the measure is necessary to reduce the deficit.

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France braces for sixth day of national strikes

Both sides continue to dig in, with the government preparing to make the final vote later this week on pension reform. Drivers have been concerned over stories of fuel shortages though the government has insisted supplies are fine. BBC News:

Tuesday will be France's sixth national day of protests since early September with further disruption expected to air travel, trains and schools.

Half of flights in and out of Paris's Orly airport have been cancelled and 30% of flights at other airports have been affected.

One opinion poll on Monday suggested that 71% of those surveyed supported the strikers, despite the increasing effect on people's lives.

Oil refineries have been shut for a week, hundreds of petrol stations have run dry and a further day of national strikes is under way.

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Pension reform strikes continue in France as airports close to running out of fuel

Supposedly nobody should panic about the lack of fuel though. Why isn't clear, but nobody should worry about it. Maybe the new-fangled airplanes don't really need fuel but run on happy thoughts. BBC:

France is bracing itself for further mass protests over the government's plan to raise the retirement age.

Thousands of students are expected to join a fifth day of demonstrations in less than six weeks. Unions have called for more than 200 marches nationwide.

Strikes have shut most of France's oil refineries and depots and the fuel pipeline to Paris's main airports has been closed.

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401K plans will require cost disclosure details by 2012

This is long overdue but still highly appreciated.

Employer-sponsored 401(k) retirement plans will have to disclose fees that savers pay on investments and transactions by 2012, the U.S. Department of Labor said.

“Participants will be able to understand the dramatic effect fees play in the returns that they get,” Assistant Secretary of Labor Phyllis Borzi said in a conference call today.

The regulations, which will apply to the plans by Jan. 1, 2012, will require companies to provide investors information on administrative and investment fees charged to their accounts in their quarterly statements, the Labor Department said.

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French anti-pension reform strike rolls into third day

The strikes continue to disrupt transportation as they push back against the unpopular reforms. In Paris the travelers are aware of the strike but it is nowhere near the complete shutdown of the system in the mid-90s. For commuters getting in and out of Paris, I understand that is a much bigger problem due to fewer trains running. The strike could continue for days or even weeks due to the extremely high public support for the strike. CNN:

A strike to protest government pension reforms is set to extend into a third day Thursday.

On Wednesday, more than 1 million people walked out to protest the reforms -- and at least some of them will stay off the job on Thursday.

French workers are fighting government plans to raise the retirement age from 60 to 62.

Ten out of 12 French oil refineries were hit by the strikes Wednesday, with eight of them fully or partially stopped, according to the French Union of Petroleum Industries.

About half of Paris Metro workers were on strike, and will stay off the job Thursday, a Metro-transport union spokesman said.

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Over 1.5 million hit the streets in France

Neither side is backing down for the moment though the protests yesterday appeared to be much larger than earlier this month. There is little doubt that the pension reform will be finalized though for many, this is much more about deterring Sarkozy from running for reelection in 2012. BBC:

French unions have staged their biggest strikes and demonstrations so far in opposition to the government's pension reform plans.

Unions put the national turnout on the third day of protests this month at 3.5m, while police said 1.2m people were involved.

The cabinet wants to raise the minimum retirement age from 60 to 62, and from 65 to 67 for a full state pension.

Some unions say they might extend or continue the strikes.

On Tuesday evening, strikers in the RATP Paris transport network voted to renew their action.

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US city pension funds seeking nearly $600 billion

Especially in this economy, closing this gap is not going to be easy. The scariest part is that the money will run out in the next few years for at least one major city.

Big US cities could be squeezed by unfunded public pensions as they and counties face a $574 billion funding gap, a study to be released on Tuesday shows.

The gap at the municipal level would be in addition to $3,000 billion in unfunded liabilities already estimated for state-run pensions, according to research from the Kellogg School of Management at Northwestern University and the University of Rochester.

“What is yet to be seen is how this burden will be distributed between state and local governments and whether the federal government will be called upon for bail-outs,” said Joshua Rauh of the Kellogg School.

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French unions march against pension reform for third time this month

It's still difficult to tell what the outcome will be on this issue. On the one hand, the unions appear to be splintering, with many not joining the strike today. On the other, voters strongly support the actions against pension reform. If the unions manage to reunite, the strike could turn into an extended action and shut down transportation. BBC:

French unions are staging a national day of strikes and demonstrations in opposition to the government's pension reforms - the third in a month.

Ministers want to raise the minimum retirement age from 60 to 62, and the state pension age from 65 to 67.

The civil aviation authority says up to half of flights to and from France have been cancelled because of walkouts.

Meanwhile, public transport and energy sector workers are set to vote on whether to begin open-ended strikes.

The rolling strikes would be organised by serving notice of 24-hour stoppages and renewed each day before they expired. Members of the union would need to be balloted at the end of the strike day on Tuesday.

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French march against retirement age reform

The issue for the strike yesterday and the strike earlier this month has been over the decision to raise the retirement age from 60 to 62. As an outsider, the increase sounds quite small as many other countries only allow official retirement at 65 or 67. Where is does sound unfair is the rapid transition from the current age requirement. As I've mentioned before, there are countless marches in Paris and even though yesterday's march was large, it's doubtful that it was large enough to have any impact on the Senate confirmation.

French unions have reported turnout of nearly three million people at rallies against pension reform but police figures are much lower.

The CFDT federation said 2.9 million had joined events across France, exceeding the turnout of 2.5 million on 7 September.

Police put turnout in Paris at less than a quarter of the unions' figure.

Marches and rallies were held as strikes closed down much of the country's public transport.

The pension reform bill, which raises the retirement age from 60 to 62, has already been passed by France's lower house of parliament.

It will be debated from 5 October by the upper house, the Senate, where it is expected to pass comfortably.

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Retirement is for losers

Appeasement is what it's all about. The Republicans always like talking about the Democrats appeasing but of course, Neville Chamberlain was a Conservative. Not that facts should matter.

How is it again that the GOP can accept the cost of endless wars but it's fair to ask granny to work at Wal-Mart? What a proud nation the Republicans like to promote. God I admire them as well as the Democrats who play their game. Read More......

Losing $14.9 Trillion in retirement wasn't enough - Wall Street wants more

The Senate Finance Committee really needs to put back in the language that would force Wall Street to list their fees for maintaining your 401K. It's not a flashy issue because who really likes thinking about a retirement plan that is years away, but it's very important. Again, a 1% change in fees could cut 28% out of your lifetime savings! Wow! Those in the House who pushed for this plan delivered pies to the Senate Finance Committee to show the massive chunk this takes out of the retirement plans of Americans. When is enough enough for Wall Street and when will some Democrats like Max Baucus start to side with the American public who has been hammered by Wall Street? Read More......

BP sued by pension fund for falling value due to Gulf disaster

I hear these lawsuits can be expensive. And damaging. And they might even trigger additional lawsuits. Oh dear. Investors really don't like to see waves of legal actions when they're trying to make money.

A UK pension fund alleges that it lost money because of falls in the BP share price after a pipeline leak in the Prudhoe Bay field four years ago. Lawyers for the fund say the latest spill is providing further ammunition for its case.

"It is too soon to tell exactly what went wrong in the gulf, but what is clear is that they [the accidents] both reflect a corporate culture and series of operating procedures that need to be reformed," said Thomas Dubbs, a partner at New York law firm Labaton Sucharow, which is handling the case against BP for the Lothian pension fund, claiming tens of millions of dollars. The fund, an investor in BP, looks after the retirement benefits of 67,000 workers employed by councils in Edinburgh and the Midlothian area, and also by the local bus company.

The pension providers are taking the company to court for the stock market losses attached to pipeline fractures that resulted in 200,000 gallons of oil being spilled and the Prudhoe Bay field being temporarily shut down. Accidents in March and August 2006 knocked billions off the BP share price, and Lothian is arguing that its funds have paid the price for management ineptitude.

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British Conservatives launch first attack on safety net

If only this was so similar to what the new Work and Pensions secretary said yesterday. Sounds like the new Con-Lib coalition is stuffing the cabinet the same way Bush did. In this case, the secretary is obviously against any social safety net that might somehow benefit those in need. So do platinum parachutes count too? Here comes the nasty side that we've all been waiting for.

Britain's welfare system is "bust", with such penal disincentives to work that many people on benefits regard those who take up job offers as "bloody morons", Iain Duncan Smith, the new work and pensions secretary, says in a Guardian interview setting out the most ambitious welfare reform plans for a decade.

Duncan Smith says he is to propose to the Treasury a radical scheme that includes simplification of the complex benefits system designed to make it financially worthwhile for unemployed people to work, including in part-time jobs.

He claims that at present it is not worth going from the dole into work if the job pays £15,000 or less. He also suggests that it is an imperative that the state retirement age rises because of growing life expectancy. The coalition agreement published last week said the state retirement age should rise to 66, although it added that this would not happen before 2016 for men and 2020 for women.

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Please welcome our good friend Naomi Seligman, who joins us today as a new writer on AMERICAblog

Joe, Chris and I have been wanting to slowly expand the blog, which is why we launched AMERICAblog Gay this past summer, and it's why we're always on the look-out for new talent. Today we welcome our good friend Naomi Seligman as a new writer on AMERICAblog.

Some of you may not have heard of Naomi, but you'll know her last place of work, where she was the number 2 in the office for the last several years - ethics watchdog CREW (and she was at Media Matters before that). Naomi recently moved from DC to the west coast, somewhere on the beach near LA (Santa Monica, I think). The point is, her move to the left coast has freed her up to finally accept our longstanding offer to write on the blog.

Naomi will be writing about whatever issue strikes her fancy, but she's told us she has a particular interest in covering issues from a woman's angle, which we heartily welcome. You can check out Naomi's bio on Blogger.

UPDATE: Naomi's next first post will go up later. The one she wrote earlier today about Tiger and Accenture relied on an article from the Associated Press that ended up being wrong. AP had a mistake in its report, which made its way around the Internet on various news sites before it was corrected a couple weeks later. Naomi checked her sources before publishing - unfortunately she found one of the news stories that wasn't corrected. Joe and I would have done the same thing. Read More......

Americans delaying retirement due to financial stress

It's an understandable problem for many Americans yet the response from Washington on the crisis remains a mystery. In a normally functioning system, older workers retire which opens up space for younger workers to enter. Thanks to changes by the Republicans back in the 1980s, many Americans are much more reliant on the whims of Wall Street for their financial security. Somehow both Congress and the White House thought that it was OK to talk about the Wall Street failures without actually doing anything about it. The made-for-TV moments were all great fun but wouldn't it have been nice to see someone bother to rein in the gamblers of Wall Street who pilfered other peoples money?

Now we are faced with the problem of backlog in employment when we need to inject new workers yet it will take some time. Wall Street has nicely bounced back with bonuses that are as bloated as ever though the rewards to customers are nowhere to be found. Considering how critical this issue was during the election and all of the talk about this being the worst recession since the Great Depression (the Great Recession as some call this) there remains a lack of seriousness throughout the political leadership in Washington. Tackling the tough issues was supposed to be a priority rather than an afterthought as it is today.

To the long list of reasons American companies aren’t hiring — business losses, tight credit, consumer retrenchment — add the fact that many of their older workers are unable, or afraid, to retire.

In other parts of the developed world, people are retiring as planned, because of relatively flush state and corporate pensions that await them. But here in the United States, financial security in old age rests increasingly on private savings, which have taken a beating in the last year. Prospective retirees are clinging to their jobs despite some cherished life plans.

As a result, companies are not only reluctant to create new jobs, but have fewer job openings to fill from attrition. For the 14 million Americans looking for work — a number expected to rise in Friday’s jobs report for August — this lack of turnover has made a tough job market even tougher.

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Employer contributions to 401K plans shrinking

The banks remain clueless as to why Americans are upset with them but if they opened their eyes and saw beyond the pampered lifestyle average people have allowed them to maintain, they might see stories like this. So besides having their retirement plans blown to bits by the recession Wall Street created, people are also suffering by getting even less into their retirement plans. At least Americans are fortunate enough to have those clever brains of Wall Street living the high life. That gives people great satisfaction to know that others are doing so well when the rest are suffering.

A quarter of U.S. employers have eliminated matching contributions to employee 401(k) retirement plans since September to save money amid the economy's downturn, according to research released on Monday.

A quarter of U.S. employers also have instituted limited enrollment rather than open the savings plans to all employees, according to the study conducted for Charles Schwab Corp. by CFO Research Services.

Although the study showed 23 percent of companies have eliminated 401(k) matching contributions, most see the move as temporary, said Steve Anderson, who heads Retirement Plan Services at Charles Schwab, a financial services provider.

Let's see how temporary it is. It might be slightly slower than the rapid bounce back in Wall Street pay. Read More......

UK taxpayers get bill for MP's retirement

Talk about bad timing. Not only is the British economy falling but now the public has the honor of footing the bill for Members of Parliament so they can retire comfortably. I wonder if everyone else will see such a cushy retirement?

Steve Webb, the Liberal Democrat pensions spokesman, branded the decision a "spectacular own goal for MPs". "The pensions of MPs and other well-paid public sector workers have to be brought in line with reality. With members of the public losing their jobs and seeing their pensions plummet, MPs cannot insulate themselves from the harsh realities of the recession."

Susie Squire, the campaign manager at the Taxpayers' Alliance, said: "Asking for more money to plug the deficit in politicians' gold-plated pensions is an utter disgrace. These pensions have been a bottomless pit for too long, and continuing to pump in taxpayers' money is no solution in the long term.

"Why should taxpayers fund politicians retiring into the lap of luxury when they have seen their own pension reduced out of recognition? If MPs want such a generous pension, they must pay for it out of their own salary and not simply keep dipping into the pockets of hard-working people."

Sounds a lot like the great health insurance plans that members of Congress receive. What a feeling it is to protect such leadership. Read More......

It's the wealth loss, stupid

Republicans have fumed over even the suggestion of blame for the economic crisis, often suggesting the economic problems are not that serious. The response to the recession is that yeah, it's bad, but it's been much worse before. During the Carter-Reagan recession, unemployment was much higher and the recession much deeper. There is some truth to their claim but they are also ignoring the massive loss of wealth from this crisis. As this article says, many more retired Americans (and working towards retirement) Americans are susceptible to fluctuations in the market. A few generations ago, a failing stock market was painful but it would not negatively impact Americans directly the way it does today.

Ask any middle class retired person how they're doing and one of the first things you will hear is how much they have lost in retirement money. For them, the last thing they want to hear is about recovering those losses "in time" because the losses could take decades to recover. Americans who have tried to be cautious and stuffed away money into 401K plans are now realizing that they will have to work longer to recoup those losses. Maybe there is a plan being developed now but Obama is going to need to find a way to help Americans recover from the Wall Street gambling that has taken everyone down. This over-reliance on the stock market for retirement is going to cause significant problems and needs a fresh look. The US needs savings but also better options for retirement plans.

Stabilizing the economy is the first step, but delivering a plan for wealth creation for average Americans and not just the elite has to come soon. Very soon. Read More......

Compare your 401K

Once the stimulus plan is completed, Congress really needs to look into the retirement plans so that America is set for the future. When the stock market was going up, fewer people took issue with the high charges from Wall Street but now that the losses have mounted, every cent is under review. The HuffingtonPost has an article about a new service from BrightScope that lets you see just how good (or bad) your 401K plan is.

Until now, an objective evaluation of 401(k) plans has been extremely difficult because of the complexity of these plans and the cleverly hidden costs which would take a pension actuary to uncover. These excessive fees have dramatically reduced employees account balances. By some accounts, the combination of poor investment options, high expenses and poor planning have caused many plan participants to have a zero return on their 401(k) investments.

A recently launched web site, Brightscope, may change everything.

Brightscope crunched 401(k) plan data from public resources and compiled an extensive database of information. Using over 200 data points, including plan costs, amount of matching contribution and quality of investment options, it assigned a numerical rating to each plan. It then compared the rating to the lowest, average and highest rating in the peer group. It also calculated how many additional years an employee in a given plan would have to work, and how much was lost in retirement savings, compared to the highest rated company in that peer group.

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Republican economics have consequences

Not everyone receives million dollar bonuses for losing billions and not everyone is sitting in the board rooms with friends setting their annual pay packages. For those people, life remains comfortable. For everyone else, add a few more years of hard work and hope for the best. More from the Washington Post:

Millions of Americans lost more than a quarter of their 401(k) retirement savings in 2008 because of the stock market's collapse, a setback that could force them to work longer or severely curtail their spending as they grow older.

In an analysis of their participants' accounts, Fidelity Investments, Vanguard and T. Rowe Price -- three of the nation's largest 401(k) plan providers -- also found that some employees were further eroding their savings by taking hardship withdrawals to pay for current financial needs.

Many Americans have seen their wealth evaporate with the drop in home values, the rise in the cost of living and the stagnation of wages. Now, as they tap into nest eggs to pay bills, they face leaner retirements as well. Particularly vulnerable are baby boomers who expected to retire in the next few years.

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