Wednesday, December 31, 2008
So, where would we be now if we (as American society) had taken up George W. Bush and the “neoconservatives” on social security reform?
I won’t get into the debate on when the trust fund runs out, other than to say that there could be future pressures to means test benefits and reduce benefits, even for some existing beneficiaries. It’s even possible that family law revisions could reduced benefits for retirees, although, ironically, the “conservative” movement in many states to limit the definition of marriage and particularly hinder the concept of domestic partnerships or economic sharing (however detrimental to LGBT families) could (very ironically, again) actually protect the financial independence and even benefits of some people. This (as I think John McCain once said) is more complicated and trickier than people think.
But what if we really had converted part of social security to private accounts? Besides the accounting bridge problem, we would have, according to naysayers, had a catastrophe because of the financial collapse in the markets this fall. Well, not so fast. Had this been done starting with younger workers only, they could use dollar-cost averaging and in the long run should be fine. Furthermore, the investments allowed in private accounts for social security replacement could have been regulated (the big bad R word). Many riskier investments could have been prohibited, but it’s still true that many reputable companies that would normally belong in a privatized retirement portfolio have been hammered and are getting government bailouts.
Monday, December 29, 2008
Today, I’ve looked through some more of the informal Internet literature on both hospices and home health.
Some visitors may want to take a look at the “Hospice Blog” for stories about the complicated ethical and financial issues within the hospice industry (there’s not too much names-naming). One particularly interesting story appeared back in March 2006, to the effect that players in the hospice industry distance themselves from “home care”, which the article says is a totally different “mind-set”. The story makes an interesting comparison between “The National Hospice and Palliative Care Organization” and “The National Association for Home Care and Hospice”, blog entry is here and the visitor can judge for the self.
Visitors may want to explore the arcane legal cases on the “Home Care Law Blog” run by Gilliland and Markette, LLP in Indianapolis.
There is a site “Home Health Care Tips” that has a sobering article on the impact of eldercare on other family members. For example, “Many family members take loans, skip vacations and often ignore their own health. Government must start providing tax deductions and tax credits to family caregivers.” That’s true, but we’ve been delving into the little understood problem of filial responsibility on this blog for two years. This question cuts all the way to the bone on our society’s assumptions about interpersonal responsibility and how it gets generated. The article gives a link to another article on the same site, “how to find the right home health care agency.”
An RN (BSN PHN) named Kathy Quan has a primer site on home health care here.
Users will want to become familiar with a concept called “the Outcome and Information Information Set” (OASIS) that is used to assess adult home care patients and evaluate the success of care (“outcome-based quality improvement”, OBQI). A good place to start is a Health and Human Services, here.
Sunday, December 28, 2008
Seniors often remain unmarried to keep social securtiy, pensions intact; new "amendments" in FL, VA could hurt them
The Jan. 13 2009 issue of the gay magazine, The Advocate, points out an interest observation for all seniors in the article on p 36 by Julie Bolcer, “The Long Arm of the New Laws”. In Florida, where voters passed a state constitutional amendment buttressing the ban on gay marriage, the constitution contains a provision that bans arrangements among unmarried people that simulate the benefits of marriage. The same concept was passed in Virginia in 2006.
The problem is that many heterosexual elderly couples meet in Florida and would marry, but do not for fear of loosing deceased spouse’s pensions and, particularly, social security benefits. This could happen when there was only one “number holder” in the marriage (often where the wife was a stay-at-home mom, which was more common in earlier generations than it is now). That could lead to serious issues, for example, with hospital visitations and many other situations later.
Generally, law firms and responsible financial service companies have been critical of “social engineering” laws or amendments which often have unintended consequences for populations not targeted by the law or constitutional amendment.
Thursday, December 25, 2008
I thought I would pass along a reference to a story on Good Morning America this morning (Christmas Day) about a 14 year old girl who volunteers in a nursing home in upstate New York. The story, “Teen Brings Pajamas, Caring to Elderly; To These Nusing Home Residents, 'Christmas Is Corissa'”, by Brian O’Keefe, has this link. The young woman refers to the fact that many of the residents’ “whole lives revolve around what is happening now” because of dementia, which may result from Alzheimers or from heart-related problems. The story says “she brings happiness to the moment.”
I did volunteer as a “baby buddy” during the HIV epidemic in the gay community in the 1980s, but the explosion of needs this time, twenty years later, takes on a totally different aspect that is very difficult to deal with.
Wednesday, December 24, 2008
Many international financial institutions have taken huge losses in capital and stock prices and had to get capital infusions from governments. But some are getting back to more like business as usual.
The Dutch financial giant ING, which accepted an investment from the Dutch government in October and posted its first ever quarterly loss, has been selected by the State of Minnesota to manage its 457 deferred compensation plans, mainly to provide retirement income and health care for state employees. ING will also administer the State Health Care Savings Plan, the Unclassified Employees Retirement Plan and the Hennepin County Supplemental Retirement Plan. The specific division is the ING Institutional Plan Services Group, of ING-USA. The press release was made on Nov. 25, 2008, link here.
Tuesday, December 23, 2008
Here is a general note on eldercare facilities. There are a number of companies (like “A Place for Mom”) that facilitate arranging of services for the elderly or disabled, including home health visits and placement in assisted living or nursing homes.
Typically these companies are fairly pro-active. They do call back, and the associated home health or assisted living providers do referred clients back fairly quickly. Probably some commissions are involved, and a job in placing services with clients certainly requires unusual empathy and listening skills in telephone conversations. That’s well to bear in mind, as there may be more of these jobs available in the future in an economy that as a whole is shrinking. Personal care jobs (and the business associated with them) cannot be offshored or outsourced.
Many home health companies have weekly hour minimums (and minimum length visits, often four hours), but some have no minimums.
As noted yesterday, the financial health and labor supply for these industries are going to remain significant issues for those facing eldercare responsibilities. The incoming Obama administration ought to pay attention to eldercare as part of health care reform, even though custodial care is usually self-paid (or sometimes Medicaid paid).
Monday, December 22, 2008
Assisted living facilities are feeling financial pressures, largely because seniors may be having more trouble selling their homes for acceptable prices in order to move in. They may have to lower rental prices, and take on more debt to keep operating.
Similar pressures may be affecting other family members, who may need to live with seniors who have a harder time selling.
Normally, one would expect tremendous demand for assisted living facilities, given demographics. But because they are “self-pay” and cost so much to operate (especially since they are labor intensive) they are having difficulties nevertheless.
The Washington Post Business section today (Dec. 22 2008, section D) has a story about Sunrise, a large company with many assisted living apartment communities and even condos, and some overseas operations. Major accounting problems have occurred. A story by Michael S. Rosenwald, “Sunrise Hopes Dawn is Near: Firm’s troubles grow as economy outs pressure on assisted living”, link here. The article indicates that a bankruptcy filing could happen, but some other form of debt restructuring is more likely.
I have seen the inside of a Sunrise facility (back in 2000). The apartments, which may go up to two bedrooms, still are very small, with the emphasis on public areas. Some properties have signs offering a special units cluster or place for Alzheimers patients.
May 4 2009
Sunrise offered a report on its downsizing (or restructuring) plan, here.
Update: Oct. 16, 2009
Media sources report that Sunrise Senior Living has sold some properties to an affiliate of Brookdale Senior Living. A typical story is in the St. Louis Business Journal, Oct. 9, 2009, link here.
Friday, December 19, 2008
Many employers are cutting back on their 401K matches during this latest recession, according to an ABC News story by Scott Mayerowitz, ABC News Business Unit. The title is “Companies Cut Employee Retirement Plans: In This Recession, Some Companies Eliminate Their 401(k) Matches”, the link is here.
Employers have stopped or terminated defined benefit pension plans and replaced them with 401K plans with matches. Now, many of them are eliminating the matches to save money, at a time when demographers say that people need to save 18% (including 401K matches) of their income in order to be able to retire reasonably, including social security.
Some of the news has come from the Vanguard Center for Retirement Research. While I could not find the latest item on 401K matches there, I did find a PDF testimony by Managing Director R. Gregory Brown submitted Oct. 21, 2008, submitted to the House Education and Labor Committee, “The Impact of the Financial Crisis on Workers’ Retirement Security,” here, which makes the point that defined contribution programs have become a cornerstone of American retirement security, and now even these are threatened.
Tuesday, December 16, 2008
Both houses of Congress have passed the Pension Plan Funding Relief Act of 2008 (also called the Worker, Retiree and Recovery Act of 2008, HR 7327, here). The law will reduce penalties for premature withdrawals from IRAs and 401Ks during 2009, and will relax the funding requirements for pension fund sponsors. The earlier concern was that stricter accounting standards could push some defined benefit pension plans into default and place greater strain on the Pension Benefit Guaranty Corporation (PBGC).
The Society for Human Resource Management (SHRM) has a story by Bill Leonard on the passage of this bill today, here.
A report by by Alicia H. Munnell, Jean-Pierre Aubry, and Dan Muldoon IB#8-18 of the Center for Retirement Research at Boston College “The Financial Crisis and Private Defined Benefit Plans” reports “Between October 9, 2007 and October 9, 2008, the value of equities in retirement plans dropped by about $4 trillion, with the decline divided equally between defined benefit and 401(k)/Individual Retirement Accounts (IRAs).” The link (leading to a full PDF report) is here. According to Leonard, the loss in corporate pension plans during this period was $900 million (but looking at the report, it might be as high as $2 trillion). Many plans had actually made money in 2007, as the crisis started to unravel.
There is an earlier story on this Act on this blog Nov. 12, 2008.
There is a detailed posting on this blog dated Sept. 16, 2008 explaining how PBGC really works.
Monday, December 15, 2008
The American Association of Retired Persons has at least two major articles on senior employment and unemployment in Dec. 2008.
Cathie Gandel has a story in the print version, p 19, “May I Help You?” about the employment of seniors in retail, and that retail employers tend to like older workers because of their social skills. One person worked just as a greeter.
But Danielle Holland and Alejandra Owens have an article “Consistently Growing Number of Unemployed Workers Heightens Need For Immediate Response To Dire Economic Times”, dated Dec. 5. In 2008 workers 45 and older have seen a 55% increase in unemployment as usually counted, and workers over 55 have a 65% increase. Older workers may be perceived as “overqualified”. But as baby boomers retire, there could be sudden shortages in many niche areas of expertise, like mainframe programming. Socially, seniors in the workplace, particularly in education, can help provide a sense of historical continuity and perspective for younger people, bringing real world perspective into the classroom. The link is here.
Thursday, December 11, 2008
Ken Blackwell, of the Family Research Council (yup!) has a no-holds-barred commentary on p A21 of the Washington Times today (Dec. 11), “The looming retirement meltdown: On the road to bankruptcy”. The link is here.
He describes the “bailout culture” as “completely out of hand”, having added an average $15000 debt to every American. And he warns that all “long term entitlements” – Social Security, Medicare, and Medicaid” are underfunded by $40 trillion and that eventually huge benefit cuts even to existing retirees are inevitable.
Of course, look at the source. The writer looks forward to the return of a culture where people are circumscribed by the opportunities within their own biological families. A collapse in entitlements (most of all Medicaid) would likely return to the enforcement of filial responsibility laws or the Chinese concept of “filial piety” which would hit the people who did not have their own children particularly hard. I’ll just connect the remaining dots, Ken.
Wednesday, December 10, 2008
Some PBS stations are rerunning a stinging segment “Can You Afford to Retire?” They’re saying at the end, “the baby boomers will keep their standard of living if they keep working.” Then they ask, what does retirement mean? We’ve defined retirement out of existence (just like marriage).
What's particularly disheartening is that boomers might expect to work at their passion in retirement, but have to give it up to make ends meet of their "passion" doesn't pay returns quickly enough.
The earlier part of the program showed the United Airlines bankruptcy, and how much of its pension obligations were put on the government, specifically the Pension Benefit Guaranty Corporation, or PBGC. A worker who had retired at 53 was facing a drop in his pension from $3000 to $2000. Bankruptcy judges have the authority to take it out on employees and sometimes retirees, who may not get their full amount from the PBGC. Many companies have underfunded pensions, and have counted on stock market advances (no longer) and accounting tricks to get away with.
The show went on to discuss the shift from defined benefit pensions to defined contribution programs, notably 401K’s, which became popular by accident. 401K’s were originally envisioned as a technicality in tax law for executives. No one imagined that employers would use the 401K, even the match, as a way to terminate defined benefit pensions. No one imagined that employers would expect employees to manage their own 401Ks (the ownership society). So some employers were starting to make attendance at HR 401K sessions mandatory.
The average contribution would need to be about 18%, including employer match, to provide the same standard of living in retirement. Most people have a contribution of 10% or less.
Tuesday, December 09, 2008
The Health Section (F) of the Tuesday, Dec. 9, 2008 Washington Post is titled “Aging Well.” A banner underneath says the percentage of the population 65 and older will increase from 12.4% in 2000 to 19.6% in 2030. But the section talks about keeping independence.
A couple of stories really do catch the eye.
A story by Benjamin Opipari, “Fast Mom Faster” tells about a 30 year old man who trains his 60 year old mother to become a competitive runner.
But the most interesting story from my perspective was by Emily Langer, “Home but Not Alone”. This concerned a senior residential community called ElderSpirit in Abington VA. The link, with online slideshow, is here.
The mixed ownership and rental community had an origin with a group of Catholic nuns after World War II. What’s interesting is the rules. Some of them sound familiar. Each residential unit must have an independent person over 55 and no one under 40. But what’s interesting are these provisions: “Residents should be committed to following the ‘values’ spirituality, mutual support, service, simple lifestyle,…” and “Residents must not pose excessive risk to themselves or to others.”
It’s understandable that a faith-based group will be more selective about who lives in a community and the behaviors allowed than the general commercial market. I don’t know what the “excessive risk” refers to, but it might include Internet self-promotion, which sounds like a disturbing precedent. The values of the people who live there are quite communal, according to the report.
Monday, December 08, 2008
Atlernet has an important story this morning (Dec 8) about Alzheimer’s Disease by Tim Jacobs in Miller-McCune, “Attacking Alzheimer’s with Red Wine and Marijuana,” link here. The Ohio State study quoted in the article is here.
The Alternet article also discusses the benefits of polyphenols in red wine.
So there is some reason to think that vices, maybe even illegal ones, could be good for you, especially during aging. Is this any surprise?
I couldn’t find the “maryjane” or “reefer madness” article in Miller-McCune. But Mary Palmquist has an article Dec 2, 2008 in Miller-McCune, “Vitamin B3 Shows Potential as Alzeheimer’s Treatment,” link here, citing a study at the University of California at Irvine. .
Wednesday, December 03, 2008
ABC World News Tonight has a story Dec. 3, 2008 about a community effort and ministry from the First Baptist Church at Jacksonville NC to counter Alzheimer’s Disease. The news story is by Steve Osunsami, “Church Community Fights Alzheimer's Disease: First Baptist Church Members Embrace Activities to Keep Mind and Heart Healthy”. The link is here. The church, looking modern, is heavily African American with an aging congregation.
The story discusses an emphasis on outdoor group activities and extending social contact and interaction. There is a lot of charismatic singing. Another measure has been learning Spanish or foreign languages. It seems that both structured intellectual activity (like language learning) and connective social activity may help stave off the development of disease. The church has worked with Duke University Medical Center on a five year project, and the program seems to be very successful.
The ABC story has some interesting sublinks to earlier stories, such as to one that babytalk is resisted by Alzheimer’s patients.
Tuesday, December 02, 2008
Some seniors (especially in “active senior” apartments or dedicated housing) are finding restrictions placed on their lives, incurring definite resentment. On the front page of the Wall Street Journal today, (Dec. 2, 2008) Philip Shishkin has an article “Crab-Apple Clash, Birdhouse Ban Pushed Seniors to Take a Stand; Rules at Housing Complex Created Activists; Fighting for Wind Chimes”, link here.
Much of the dispute concerned the desire for residents, in relatively small and cramped apartments, to keep some items on their patios, where the local (Shrewsbury, MA) fire department claimed that that residents were blocking safety access. However, management soon prohibited almost all items on outdoor areas, leading to resistance and attempted evictions, before management and fire departments backed down a bit.
Active seniors need the same amenities of their younger friends. This includes such items as reliable broadband, security, and full normal autonomy as tenants or residents in how they lead their lives, even publicly. It's a way of saying, everyone still needs "personal sovereignty." The article suggests that there were political battles over who determines the "rules" by which society protects seniors (from themselves). I can imagine more battles like this in the future.