Tuesday, August 27, 2013

Debt ceiling debate is back; Social Security trust fund is on the priority list (as a bondholder)

The debt ceiling debate, like my drain fly colony, is back, as the Treasury department now says that accounting tricks can keep going only until mid October, 2013.  Zachary Goldfarb has the story in the Washington Post today here 
As “we” argued last winter, some daily federal income would continue, and the Social Security Trust Fund, according to the best legal information, would have as legally valid a “first claim” as any bond holder.  So the threat to existing Social Security recipients, in the short term, may have been overblown.  But there is nothing “constitutionally relevant” to stop Congress from implementing means testing, even for current recipients, according to Flemming v. Nestor, as we have covered.  There is only political clout.

Retirees could also be affected by economic instability – rising interest rates affecting bond portfolios, and possibly lower corporate earnings and future stock prices because of the pressures from Obamacare, which, however, also has many economic benefits (spreading pressure on health care costs, and many more I.T jobs).  Curiously, markets are skittish today over fears over a Syria strike, and that doesn’t sound rational.   

Thursday, August 22, 2013

Workers in 50s and early 60s: savings rate has plummeted in past year

AARP is reporting that retirement savings are down for people aged 50-64 considerably in just the last year, at least since the beginning of 2012.  No doubt, this report will provoke a column by Michelle Singletary.  The link is here
I was actually pretty lucky during my last years at ING-ReliaStar.  (I was forced to “retire” by that “Fourth Floor Massacre” in December, 2001.)  I got statements from the company every quarter, based on 401(k) accumulations, and they did show the “nest” egg growing.  The company froze its pension in 2000 but had a healthy 401(k) full match.  ("Freezing" is not the same as "terminating".)

If you are involved in receiving money from an estate, you want to know what you accumulated on your own, first.  You want to keep track of your “numbers” with a number of different views, including liquidity.  

Tuesday, August 20, 2013

Is AARP quiet on filial responsibility out of "practical necessity"? Would a policy debate cause more states to enforce it?

Last week (on Monday August 12), I reported that I had discovered that a valuable AARP state map giving linkable details on filial responsibility laws had disappeared.  I contacted AARP, and the only response I got was that they have another posting from 2009 explaining the concept That article does have a link to a 2007 study by Evercare on the sacrifices made by family caregivers, here.
I wonder why the map link was taken down and has not been replaced. 

I can appreciate that maintaining it accurately could be a problem.  State laws in this area are tricky.  For many of the 29 states that have them, they are hard to find online, and hard to interpret. AARP could have felt that it was taking a “risk” of giving wrong legal advice by keeping it.  In any case, any adult child in this situation should talk to an eldercare lawyer in his own community and state.

Back in 2007, I researched the laws in a few states: Virginia, Maryland, California, Massachusetts, Connecticut, Iowa, South Dakota, Iowa, and particularly Pennsylvania.  The findings are in this blog during that month.   I have not checked recently to see how current this information is, because it would be so time consuming to maintain (as AARP must know).  The last of these states (that is, PA) moved its filial responsibility law from the welfare code to the family code in 2005, a step that could have been seen as socially provocative.  I was in contact with a few experts in the subject in 2007.  One of them, a professor in Pennsylvania, expressed then in an email a concern that amateur’s publishing on the matter could provoke states (or other parties, like nursing homes) into trying to invoke them.   That is the mentality we used to accept with sodomy laws in the gay world;  in many states, they were on the books, but almost never enforced against private consenting adults,  But they were still there, ready for use as a political weapon.

Could AARP feel that remaining quiet on the matter is safer “practical” political strategy? I wonder. 
It is true that not many states have tried to use them recently, but we saw a case reported here in May 2012 where a nursing home went after an adult child directly rather than going to Medicaid, in Pittas case – in guess what state?  Rick Santorum’s Pennsylvania.

States, as their budgets (and particularly their public employee pension funds) get squeezed, may very well turn to these laws in the future, at least to save money in the Medicaid area. 

There is no question that as a policy matter we must debate it.  If we value keeping human beings alive as long as possible, and there are fewer children being born (especially in some populations) to support previous generations (an issue we touch all the time with the Social Security and Medicare debates), we have to consider the unelected moral and legal responsibilities of adult children as individuals.  And the debate has double-edged areas in many areas, such as childlessness, public policy supporting parents, and most of all how we look at marriage itself, and the responsibilities that go with it.  Because some of those responsibilities can exist anyway. 

Note also that on March 17, 2013 on this blog, I linked to an original article I wrote for Wikipedia on the matter.

Monday, August 12, 2013

PBGC publishes reminder that it does not insure public pension plans; filial responsibility could come into play after bankruptcies

The Pension Benefit Guaranty Corporation (PBCG) has reminded the public that it doesn’t insure the pension plans of governments – municipal, county, or state.  It only backs up the pensions of (most) private-sector plans.  The posting is here

The question began to circulate Sunday night after a television broadcast by Morgan Spurlock about a municipal bankruptcy (in his “Inside Man” series) mentioned that the pension payments of one California town (not Stockton, but a smaller town) had been cut by 90% by the bankruptcy court.  That means the pensioners have been stiffed and are out of luck for life.   That is obviously a big upcoming issue in Detroit.  Here’s another potential complication.  California, like many states (I’m not sure about Michigan) has a filial responsibility law.  It’s possible that when a parent who had beenan affected municipal employee loses most of his or her pension, an adult child could be forced to support him or her.

By the way, the AARP map (linked on this blog March 8) seems to have disappeared.  I’ll try to find out where it is. AARP does have a text article on the filial responsibility issue here.   It is by Beth Baker and dates back to January 2009.  

Wednesday, August 07, 2013

Lessons from Bezos and the Washington Post: if you're near retirement and you company is sold, don't cry (but learn to use EDGAR)

Michelle Singletary, a syndicated columnist often appearing in the Washington Post with her “Color of Money” article, wrote today that she knows what it feels like to learn that your employer has been sold (link). 

Of course, she is referring to Jeff Bezos’s singlehanded purchase of the Washington Post, held and protected eight decades by the Graham family.

I don’t know why a syndicated writer would feel tied to one newspaper;  but it certainly will get attention of people for whom the Post really does mean a journalism career – for example, Timothy B. Lee, who moved over to the Post from Ars Technica and has started a new technology series called the Switch Blog.

Singletary takes us, in this piece, through her calculations of what retirement would mean.  It appears that the Post has funded its pensions pretty well.  What’ interesting is that Singletary names the filings at the SEC and on EDGAR that any stakeholder, especially someone near retirement, should look at, as well as the specific form 8-K.

I would have done all this with ReliaStar and ING before “retiring” in the post-9/11 period at the end of 2001, when many companies were stressed.  I was taken care of OK, but since then I have learned that I was luckier than most people.  Look this stuff up yourself,  “Guys and Dolls”.  

Tuesday, August 06, 2013

Hospital advertises prostate treatment on DC Metro billboards; "W." escapes being cracked open like a lobster

While on the Metro to Nationals Park last night, I saw a bizarre ad in one of the cars for prostate care, from Georgetown University Hospital.  Two “friend” had both shared the experience of “CyberKnife” (link) , which reduces the number of radiation sessions from 40 to 5.
My own PSA numbers went down the year after mother died, probably because no caregiver was cooking, so I tended to consume less fat.  Reducing fat intake and perhaps weight will probably reduce PSA in some men, and greatly lengthen the period of “watching and waiting” with no intervention (possibly leading to incontinence or impotence). 
There’s always an issue – whether your own momentum can keep you going without stopping for cacer screening and the possibility of mutilative surgery and dependence on others.
Former President George W. Bush didn’t get to go home to his ranch near Austin, TX yesterday, when a “routine” physical found a blocked artery.  He had an angioplasty and stent this morning despite not having many symptoms.  I don’t know how a “routine” physical finds something like that. At least “W.” came out of this better than David Letterman; he didn’t have to join the zipper club. 

But, at 70, I suspect I will be pressured to accept more invasions and humiliation for Medicare-paid tests next go round.  After all, I have a moral obligation to find out why I was so far behind physically as a youngster.  With me, it remained a moral issue, not a disability.  

There was a media report today that breast-feeding may reduce a woman's chances of devleoping Alzheimer's Disease later in life by as much as 65%.   Does this mean that women who don't have children are at greater risk?

Monday, August 05, 2013

Moderates call for Congress to develop a municipal bond insurance program to stabilize public pension accounting

Congress should develop a federal municipal bond insurance program, which would establish uniform national standards for actuarial projections of returns on pension investments.  That is a suggestion made on p. A17 of the Monday, August 5, 2013 New York Times, by Richard J. Riordan an Tim Rutten, title "A Paln to Avert the Pension Crisis", link here.

This would not overlap the responsibilities of the Pension Benefit Guaranty Corporation (PBGC).

The GOP would probably resist a proposal like this, but would have a hard time not looking silly.

The entire tax-free municipal bond world could be at risk without more uniform standards of actuarial accounting, which generally already exist in the life insurance industry.  

Saturday, August 03, 2013

Moody's places some local, state employee pension funds under review; Conservative group in Minnesota weighs in

When I lived in Minneapolis from 1997 to 2003, I sometimes went to seminars or luncheons held downtown by the conservative-to-libertarian group Center for he American Experiment, run by Mitchell B. Pearlstein and Katherine A. Kersten.   Speaker ranged from John Stossel (libertarian-oriented ABC 20-20- reporter at the time) to Cato Institute policy researchers (David Boaz once, if I recall right).
Sometimes the writings could take on a socially conservative side, as with the 2000 essay anthology book by the couple, “Close to Home: Celebrations and Critiques of America’s Experiment I Freedom”, where Kersten, in one essay (“Textbooks Push the Needs of ‘Self’ ove Marriage”) criticizes a hyper-individualistic outlook on life that disregards the importance of learning to take care of other people (before being married with kids, or not).  I recall the coined term, “self-date”. In more recent years, some libertarian writers like Charles Murray have noted a gradual erosion of "social capital" and the effect this can have on the needy.
In fact, that point certainly translates into today’s concerns about eldercare, aging population, lower birthrate, and filial responsibility.

A recent policy article by the group points out that in many states (in their case, Minnesota, particularly the city of Minneapolis or Hennepin County), taxpayers have to pay more and face higher interest rates (or their local governments face them with bonds) because accounting for pension funds for public employees was not done properly in the past.  The link is here.
The article does favor the practice by employers (public and private) to convert employees over to defined contribution plans (from defined benefit plans) in the way of various 401(k)’s and annuity products. 
The article also mentions Virginia (the entire Commonwealth) as having problems, as well as over twenty local or state systems, “under review” by Moody’s.