Month: April 2021

China’s young and old rail against raising retirement age

Mary Pat Campbell

Link: https://asia.nikkei.com/Spotlight/Society/China-s-young-and-old-rail-against-raising-retirement-age

Excerpt:

The retirement age for employees in the public sector and at state-owned enterprises is set at 60 for men, 55 for female office workers and 50 for female blue-collar workers. This has remained unchanged since around the time of the founding of the People’s Republic of China in 1949, even as life expectancy has risen to more than 80 in urban areas.

The government work report presented to the National People’s Congress in March stated that “the statutory retirement age will be raised in a phased manner” as part of the new five-year plan for 2021 through 2025.

Beijing sees this as necessary to alleviate pressure on the social safety net and head off a labor shortage that could set it back in its power struggle with Washington. But resistance is strong from young graduates concerned about the impact on their career prospects as well as from grandparents expected to care for grand children after retirement. 

Author(s): Iori Kawate

Publication Date: 4 April 2021

Publication Site: Nikkei Asia

China to Raise Retirement Age to Offset Funding Shortfall  

Mary Pat Campbell

Link: https://www.voanews.com/east-asia-pacific/voa-news-china/china-raise-retirement-age-offset-funding-shortfall

Excerpt:

 The current statutory retirement age in China is 60 years for male workers, 55 years for female cadres and 50 years for female workers. Cadre is a general term for civil servants working in the government, public institutions and state-owned enterprises. Labor regulations do not differentiate between male cadre and male workers.

Beijing did not specify a target retirement age. By comparison, the current retirement age in the U.S. is 66, although that depends on the year of birth. The global average was 62.7 years for men and 61.3 years for women, according to an analysis of 70 countries by insurer Allianz SE, reported Bloomberg. 

You of MOHRSS said that the retirement age was set in the early 1950s, when people were expected to live about four decades. In 2019, life expectancy in China was 77.3 years nationwide, with city dwellers expected to keep going past 80 years.

Author(s): Yang Ming

Publication Date: 17 March 2021

Publication Site: Voice of America News

China to raise retirement age in stages – state researcher

Mary Pat Campbell

Link: https://www.pionline.com/economy/china-raise-retirement-age-stages-state-researcher

Excerpt:

China plans to raise retirement ages gradually over a number of years instead of in a drastic one-time change, a government researcher said last week, without providing any detail on when the changes might start.

When the retirement age starts being lifted, it will be by a few months every year, or by a month every few months, according to Jin Weigang, head of the Chinese Academy of Labor and Social Security under the Ministry of Human Resources and Social Security. Mr. Jin didn’t say when the changes would begin, but the current five-year plan calls for “raising the retirement age in a phased manner.”

“People in different age groups will be retiring at different ages,” Mr. Jin said in an interview with the state-run Xinhua News Agency published March 13. “For example, in the first year of the policy’s implementation, female workers who were originally scheduled to retire at 50 will retire one month or a few months after 50.”

Author(s): Bloomberg

Publication Date: 15 March 2021

Publication Site: Pensions & Investments

How much will your city get from Illinois’ share of the Biden stimulus and how will they spend it? – Wirepoints

Mary Pat Campbell
How much will your city get from Illinois’ share of the Biden stimulus and how will they spend it? – Wirepoints

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Excerpt:

There’s little doubt that Illinois politicians are salivating over the $13.7 billion windfall they’re about to spend. Those billions are Illinois’ share of the $350 billion in aid dedicated to state and local governments, a key part of President Biden’s $1.9 trillion stimulus package passed earlier this year. The state of Illinois itself will get $7.75 billion and the remaining $6 billion will go directly to counties and cities.

The numbers are big. Take the city of Berwyn, Illinois, which is set to receive $32 million in stimulus dollars, according to a data release from the Illinois Municipal League. The city’s take is equal to a whopping 81 percent of its 2019 general budget. Peoria expects $46 million, or nearly half of its $100 million budget. And the city of Chicago will get nearly $2 billion, worth 60 percent of its general budget, based on financial data from the Illinois Comptroller. 

Even the state, which nearly broke even in revenues in 2020 compared to 2019, will get more than $7.75 billion, nearly a fifth of its budget.

Author(s): Ted Dabrowski, John Klingner

Publication Date: 13 April 2021

Publication Site: Wirepoints

Federal cash infusion won’t erase Illinois’ chronic fiscal strains

Mary Pat Campbell

Link: https://fixedincome.fidelity.com/ftgw/fi/FINewsArticle?id=202104131450SM______BNDBUYER_00000178-cc00-d414-abf8-efa2047e0001_110.1#new_tab

Excerpt:

S&P Global Ratings warns of the pressures posed by the Illinois? burdensome pension tab even as it maintains scheduled contributions despite glaring structural woes cited in the recently published three-year budget forecast from the legislature?s non-partisan Commission on Government Forecasting and Accountability.

When applying fiscal 2022 proposed spending levels, the state?s roughly $5 billion bill backlog could jump to $9.9 billion, and $10.6 billion by the end of fiscal 2024, and a $1.2 billion fiscal 2022 deficit rises to $1.9 billion or $2.3 billion if spending grows by five- and 10-year historical rates of 2.7% or 3.2%, respectively.

The numbers look bleaker with the backlog skyrocketing to record levels of between $19.1 billion and $20.5 billion based on a fiscal 2021 spending base.

Author(s): Yvette Shields

Publication Date: 13 April 2021

Publication Site: Fidelity Fixed Income

Bad math: Pa.’s biggest pension fund was warned but inflated investment returns anyway

Mary Pat Campbell

Link: https://www.inquirer.com/news/psers-grell-pension-teachers-recalculation-20210418.html

Excerpt:

The board of Pennsylvania’s biggest pension fund adopted an inflated number for its investment performance even after the state treasurer raised skeptical questions about the calculation last summer, newly obtained documents show.

That decision by the PSERS board has emerged as a costly and disruptive mistake, raising the possibility that the $64 billion pension fund for teachers may soon have to hike their payments to support the mammoth but underfunded plan. The panel is to meet Monday to consider doing that.

In his August 2020 letter, then-Treasurer Joe Torsella raised doubts about a decision by the fund’s professional staff to go back almost a decade to revise — and improve — figures for past investment performance.

Author(s): Joseph DiStefano

Publication Date: 18 April 2021

Publication Site: Philadelphia Inquirer

Diversity within the Federal Reserve System

Mary Pat Campbell
Diversity within the Federal Reserve System

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Excerpt:

Given that Class A directors are explicitly bankers elected by bankers, it is perhaps unsurprising to see their predominance. But a trend since roughly 1980 includes a substantial and growing number of non-banking finance representatives as the third-most represented single group, after banking and manufacturing. The influence of finance on the Reserve Banks’ governance remains very strong, even among the classes of directors meant to represent other interests.

Author(s): Peter Conti-Brown, Kaleb Nygaard

Publication Date: 13 April 2021

Publication Site: Brookings

NEW YORK ENACTS LEGISLATIVE ‘FIX’ FOR LEGACY LIBOR CONTRACTS GOVERNED BY NY LAW; WILL A FEDERAL FIX BE NEXT?

Mary Pat Campbell

Link: https://www.morganlewis.com/pubs/2021/04/new-york-enacts-legislative-fix-for-legacy-libor-contracts-governed-by-ny-law-will-a-federal-fix-be-next

Excerpt:

The State of New York has enacted a new law that should ease the transition away from US dollar LIBOR for legacy financial contracts that are governed by New York law but do not contain modern benchmark fallback provisions. A similar federal law is in the works, which if passed would apply nationwide.

Author(s): Charles A. Sweet, Kurt W. Rademacher

Publication Date: 19 April 2021

Publication Site: Morgan Lewis

How much is your community getting under the American Rescue Plan? A searchable database for the nation is here – Wirepoints

Mary Pat Campbell
How much is your community getting under the American Rescue Plan? A searchable database for the nation is here – Wirepoints

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Excerpt:

Embedded below are a set of searchable databases that provide the estimated allocation of the $360 billion in direct government aid to states, counties and cities under the $1.9 trillion American Rescue Plan. The remaining stimulus includes funding for schools and other programs, for which detailed data is not yet available.

The $360 billion is split as follows: State governments are set to receive $230 billion in direct and capital project grants, county governments will receive $65 billion, and municipal governments will receive the other $65 billion.

Author(s): Ted Dabrowski, Mark Glennon, John Klingner

Publication Date: 17 April 2021

Publication Site: Wirepoints

Relief from SALT cap for Illinois pass-through businesses may be on the way – Wirepoints

Mary Pat Campbell
Relief from SALT cap for Illinois pass-through businesses may be on the way – Wirepoints

Excerpt:

It’s Senate Bill 2531. The bill is sponsored by Sen. Win Stoller (R-Germantown Hills) and it has picked up additional sponsors from both parties. It would allow a small business to elect to be taxed at the entity level, instead of letting the income pass through to their personal return. The owner would then claim an offsetting credit on their state return. It passed the Senate Revenue Committee with a vote of 9-0 and now goes to the Senate floor for further consideration.

We hope and expect the bill will become law. While we support the $10,000 federal SALT cap, it’s entirely appropriate for Illinois to facilitate exceptions recognized by the IRS, just as other states are doing. At least fourteen other states have passed or are in the process of passing similar legislation. The legislation could help up to 400,000 Illinois small business owners save thousands of dollars annually on their federal tax filings, according to Stoller.

Author(s): Mark Glennon, Ted Dabrowski

Publication Date: 17 April 2021

Publication Site: Wirepoints

Bill Reintroduced to Shore Up Social Security, Medicare

Mary Pat Campbell

Link: https://www.thinkadvisor.com/2021/04/15/bill-reintroduced-to-shore-up-social-security-medicare/

Excerpt:

A bipartisan group of lawmakers reintroduced Thursday legislation to shore up the Social Security and Medicare Trust Funds.

The Time to Rescue United States Trusts, or TRUST Act, would establish bipartisan, bicameral commissions to address the long-term solvency of major trust funds.

….

The Congressional Budget Office projects the Highway Trust Fund will be insolvent by 2022, the Medicare Hospital Insurance Trust Fund in 2026, the Social Security retirement fund in 2032, and Social Security Disability Insurance in 2035.

Author(s): Melanie Waddell

Publication Date: 15 April 2021

Publication Site: Think Advisor

No, ‘Infrastructure Of Care’ Is Not Infrastructure – And Three Reasons Why It Matters

Mary Pat Campbell

Link: https://www.forbes.com/sites/ebauer/2021/04/18/no-infrastructure-of-care-is-not-infrastructureand-three-reasons-why-it-matters/?sh=25de6d53721c

Excerpt:

First, as I referenced in passing in my prior column, the long-lasting nature of infrastructure is what justifies paying for it over time. This proposal’s spending is meant to be accomplished over 8 years, with the tax increase funding it over 15 years. That could be justifiable for some types of infrastructure, when it is something new rather than ongoing maintenance, but is not at all appropriate for ongoing day-to-day spending.

Author(s): Elizabeth Bauer

Publication Date: 18 April 2021

Publication Site: Forbes