Month: August 2022

COVID-19 and the Short-Term Impact on Future U.S. Mortality

Mary Pat Campbell

Link: https://www.soa.org/resources/research-reports/2022/covid-19-short-term-impact-us-mort/

PDF of report: https://www.soa.org/4a28d8/globalassets/assets/files/resources/research-report/2022/covid-19-short-term-impact-us-mort-report.pdf

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Excess mortality is expected to occur for all years studied with amounts varying by year and age.
Although the largest mortality excess numbers for the U.S. general population are foreseen for
2022, excess mortality is expected to decline each year so that by 2030, excess mortality numbers
are nearing expected levels. For 2030, mortality is projected to be 2% higher than expected for all
ages except age 85. At this age, 2030 projected mortality is estimated to be 1% higher than
expected.

Based on the average of the participants, generally, the amount of mortality excess is anticipated to be highest at the younger ages. For example, for 2022, projected mortality is anticipated to be 14% higher
compared to expected levels for age 25, 13% higher for age 45, and 10% higher for ages 65 and 85.

Author(s): Ronora Stryker, ASA, MAAA

Publication Date: August 2022

Publication Site: Society of Actuaries

Does Aging-In-Place Work? What We Don’t Know Can Hurt Us.

Mary Pat Campbell

Link: https://www.forbes.com/sites/ebauer/2022/06/05/does-aging-in-plahttps://www.forbes.com/sites/ebauer/2022/06/05/does-aging-in-place-work-what-we-dont-know-can-hurt-us/ce-work-what-we-dont-know-can-hurt-us/

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In the book Aging in the Right Place from 2015, author Stephen Golant provides a number of reasons why that “right place” might be the longtime family home:

•The advantages of a familiar neighborhood: the individual knows the shops and services and can navigate the area well even after physical or cognitive decline.

•The advantages of a familiar home: spatial competence (finding your way when the power goes out, navigating steps out of familiarity)

•Preserving familiar relationships – friendships and service providers.

•The attachment to possessions and pets is not disrupted (e.g., vs. moving to no-pets home); the home not only contains memories of the past but also reminders of past successes.

•The home affirms one’s self-worth; one fears (whether rightly or wrongly) that others will consider the person a “retirement failure” upon moving.

….

“The bitter truth is that an older person can succeed at remaining in her or his own home and still live a life as empty and difficult as that experienced by nursing home residents. Feeling compelled to stay in one’s home, no matter what, can result in dwindling choices and mounting levels of loneliness, helplessness, and boredom.”

This is a stark message. But here’s an even more discouraging problem: in my research on the issue, I encountered one repeated refrain. There is no solid scholarly research which asks the question: “which choice is the better one, in terms of future quality of life, to stay or to move?” It’s not an easy question, to be sure: simply looking at the quality of life of the elderly and comparing those who live in single-family homes vs. various kinds of “elder-friendly” housing would not adequately distinguish between those who moved due to some sort of health problem and those who moved with the aim of preventing future health problems, for example.

Publication Date: 5 June 2022

Author(s): Elizabeth Bauer

Publication Site: Forbes

Maryland State Retirement System Loses 3% in Fiscal Year 2022

Mary Pat Campbell

Lik: https://www.ai-cio.com/news/maryland-state-retirement-system-loses-3-in-fiscal-year-2022/

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The Maryland State Retirement and Pension System’s investment portfolio lost 2.97%, net of fees, for the fiscal year ending June 30, but beat its policy benchmark’s loss of 3.48%. As they have been for many pension funds, the results were a sharp turnaround from last year, when the MSRPS earned record returns of 26.7%.

….

Although the fund missed its new assumed actuarial rate of 6.8% for the fiscal year, which became effective July 1, the portfolio’s three-, five- and 10-year returns were 8.4%, 7.9% and 7.8%, respectively.

Author(s): Michael Katz

Publication Date: 17 Aug 2022

Publication Site: ai-CIO

12 States High Earners Are Flocking To

Mary Pat Campbell

Link: https://www.thinkadvisor.com/2022/08/11/12-states-most-high-earners-are-moving-to/

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U.S. households that earn upward of $200,000 a year can have a significant impact when they move between states, despite their relatively small numbers, according to a recent analysis by SmartAsset. In 2020, these tax filers comprised 6.8% of total tax returns filed across the 50 States and the District of Columbia.

High-earning households’ influence is so great because a state that loses more of them than it gains in a given year may experience a decline in tax revenues and its fiscal situation may worsen.

As part of its analysis, SmartAsset identified the states with the most movement of high-earning households. Researchers examined the inflow and outflow of tax filers making at least $200,000 in each state and the District of Columbia between 2019 and 2020.

Author(s): Michael S. Fischer

Publication Date: 11 Aug 2022

Publication Site: Think Advisor

NY Common to Review Net-Zero Readiness of Oil and Gas Firms

Mary Pat Campbell

Link: https://www.ai-cio.com/news/ny-common-to-review-net-zero-readiness-of-oil-and-gas-firms/?oly_enc_id=2359H8978023B3G

Excerpt:

The New York State Common Retirement Fund is evaluating 28 publicly traded oil and gas companies to determine if they are ready to transition to a low-carbon economy, according to a release from the state comptroller’s office.

The $272.1 billion pension fund is asking each company, which includes energy giants BP, Chevron, Exxon Mobil and Shell, to provide information on how prepared it is to transition to a net-zero economy.

….

The assessment of the pension fund’s integrated oil and gas holdings is part of its broader review of energy sector investments that it believes face significant climate risk. When DiNapoli announced in late 2020 that the pension fund would transition its portfolio to net-zero by 2040, he said the process would include completing a review of energy sector investments within four years to assess transition readiness, as well as a divestment of companies that don’t meet its climate-related investment risk standards.

Less than two years into that review process, which has so far included an evaluation of shale oil and gas, oil sands and coal companies, the pension fund has decided to divest from 55 firms that it determined were not prepared to transition to a net-zero economy.

Author(s): Michael Katz

Publication Date: 15 Aug 2022

Publication Site: ai-CIO

Retirement plans’ impact on recruiting and retention in the public market

Mary Pat Campbell

Link: https://reason.org/commentary/retirement-plans-impact-on-recruiting-and-retention-in-the-public-market/

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A number of conclusions regarding the retirement plan’s impact on recruiting and retention can be drawn from the MissionSquare survey results:  

Recruiting and retention should not be looked at as a singular issue. While public employers have seen steady success in hiring, retention has suffered greatly in recent years in the public market. 

The survey does not make the case that an employer’s retirement plan, whatever the design, has a substantial impact on recruiting or retention at all. In fact, the survey shows employers are more focused on employee morale, development, and engagement to enhance retention, along with salary increases. The survey does not suggest that there is a widespread recruiting issue although some positions, including nurses, engineers, and police officers, are more difficult to hire than others. 

Plan sponsors should avoid treating retirement plan design only as a tool for retaining employees. Rather, they should focus on a retirement plan design that realistically meets the needs of a modern workforce. The retirement plan should focus on providing lifetime income in retirement commensurate with the part of a career that an employee spends with a particular employer. The plan should recognize the realities of mobile modern employees and should not penalize employees that do not spend a full career with one employer. 

The survey illustrates that employers are focused on employee wellness as a means to improve retention. It follows that keeping employees happy should also be the focus of the retirement plan. Retention is best addressed by having a retirement plan that addresses the realities of the workforce today, as noted above.  

Author(s): Richard Hiller

Publication Date: 9 Aug 2022

Publication Site: Reason

Democrats’ $80 billion wager: A bigger IRS will be a better IRS

Mary Pat Campbell

Link: https://www.washingtonpost.com/business/2022/08/06/inflation-reduction-act-irs/

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The result is that the IRS’s prolific enforcement capabilities — which bring in on average better than $10 in revenue for every $1 spent pursuing audits — are often trained on the most economically vulnerable taxpayers.

More than half of the agency’s audits in 2021 were directed at taxpayers with incomes less than $75,000, according to IRS data. More than 4 in 10 of its audits targeted recipients of the earned income tax credit, one of the country’s main anti-poverty measures.

Congress and the White House, when led by Republicans, have starved the IRS of resources for so long, experts say, that even with an influx of $80 billion in new funding, the agency’s ability to transform itself is far from assured.

Some of its main computers still run on programming language that dates to the 1960s, called COBOL, the IRS has repeatedly told policymakers. The program is so old that college computer science courses rarely teach it anymore, forcing the IRS to spend heavily on training new hires in antiquated systems.

The IRS has 60 discrete case management systems that do not communicate with one another.

Its staffing levels have dropped by 17 percent since 2010, including a 30 percent decline in enforcement employees, because its budget has flatlined: Adjusted for inflation, its annual appropriation from Congress is down 12 percent over the same span, at $12.6 billion this year.

Author(s): Jacob Bogage

Publication Date: 6 Aug 2022

Publication Site: Washington Post

Congressional Bill Could End Windfall Elimination

Mary Pat Campbell

Link: https://www.yahoo.com/video/congressional-bill-may-soon-end-194009302.html

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The wind fall elimination provision (WEP) reduces the amount of Social Security benefits people can collect if they receive a government retirement plan in addition to Social Security. It applies only to workers who did not pay Social Security taxes, and so did not earn credits toward Social Security income during their working years.

According to the Congressional Research Service, roughly 6% of workers don’t receive Social Security credits in a given year. Most are local, state and federal employees who don’t pay Social Security taxes because they qualify for government pensions instead. For example, these are federal civilian employees who receive their retirement through the Civil Service Retirement System. The rest are workers covered by alternative retirement schemes, such as Railroad Retirement, or poverty-level workers who earn too little to qualify.

…..

Government Pension Offset (GPO)

The GPO cuts the benefits issued to retirees who receive both their own Social Security payments and a spouse’s government pension payments. The GPO aims to prevent double earning by someone who begins collecting their spouse’s retirement benefits. In the case of the GPO, it reduces a recipient’s Social Security payments by two-thirds of the pension payments that they receive. For example, say that a government worker received a monthly pension of $750. After their death, their spouse is eligible to continue collecting that pension. The pension offset, however, would reduce the surviving spouse’s Social Security payments by $500 per month.

The GPO only applies when someone directly collects their spouse’s pension benefits in addition to their own Social Security benefits, such as when that spouse dies. It does not apply to a household where both people are alive and collecting their own retirement benefits. It also only applies when the government worker did not pay Social Security taxes during their working years.

…..

Almost 340 members of Congress agree that it’s time to eliminate the windfall elimination, and retired public workers could benefit by more than $6,000 per year. In 2021 Rep. Rodney Davis, R-Ill., introduced the Social Security Fairness Act. This bill would repeal the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO) from Social Security payments. If it passes public employees could see a significant bump in their retirement incomes, and it may pass soon.

At time of writing the Social Security Fairness Act had 294 sponsors in the House of Representatives. Its companion bill in the Senate had 41 sponsors. The measure has been placed on a legislative fast-track. By removing the Windfall Elimination Provision and the Government Pension Offset, this law targets two issues that public unions have long criticized.

Author(s): Erid Reed

Publication Date: 7 Aug 2022

Publication Site: Yahoo News

PW special report: NC treasurer’s love for cash in the pension fund hobbled returns during the stock market boom

Mary Pat Campbell

Link: https://ncpolicywatch.com/2022/08/05/pw-special-report-nc-treasurers-love-for-cash-in-the-pension-fund-hobbled-returns-during-the-stock-market-boom/?eType=EmailBlastContent&eId=8dfd910d-e76e-4e65-91ce-d144637d3017&eType=EmailBlastContent&eId=18903da7-2756-43a1-92ce-b1403da31f40

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* The pension fund holds much more of its money in cash than other comparable state pension funds and more than its allocation policy suggests. State Treasurer Dale Folwell routinely overrides the policy to prevent “rebalancing.”
* Folwell emphasizes steeling the pension plan against stock market downturns. That’s led to the plan missing out on the big stock market gains of the last few years. Returns for the state pension fund are far lower than comparable public pension funds.
* Folwell repeatedly liquidated stock to shift money to bonds and cash.
*He has lowered the pension fund’s assumed rate of return in stages, which means the state and local governments have had to increase their contributions.

Author(s): Lynn Bonner

Publication Date: 5 August 2022

Publication Site: NC Policy Watch

Rapper Fat Joe Says No One Is Making Sure Hospitals Post Their Prices

Mary Pat Campbell

Link: https://khn.org/news/article/rapper-fat-joe-hospitals-price-transparency-fact-check/

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Rapper Fat Joe takes on hospital industry executives in an advertisement, contending that many hospitals are disobeying a law that requires them to publicly post the prices they charge cash-paying patients and insurance companies for every service they offer.

The ad, paid for by a group called Power to the Patients, states, correctly, that hospitals must list their negotiated prices and asserts that the rule helps patients by making it harder for them to be overcharged. The ad also blames politicians and regulators because the price information is still not necessarily available.

…..

Hospitals have dragged their feet, and compliance is spotty. Studies have found that many hospitals have posted at least some data but that large shares of the facilities have failed to post everything required.

….

In early June, CMS issued penalty fines of about $1.1 million against two Georgia hospitals — Northside Hospital Atlanta and Northside Hospital Cherokee — that are owned by the same company. Those were the first fines issued under the new rules.

As of late July, the agency had sent 368 warning notices to hospitals and issued 188 corrective action plan requests to hospitals that had previously received warning notices but had not yet corrected deficiencies, according to a statement from Dr. Meena Seshamani, deputy administrator and director of the Center for Medicare.

Author(s): Julie Appleby

Publication Date: 10 Aug 2022

Publication Site: Kaiser Health News

NY State Pension Returns 9.5% in FY 2022, While NYC Pensions Lose 8.65%

Mary Pat Campbell

Link: https://www.ai-cio.com/news/ny-state-pension-returns-9-5-in-fy-2022-while-nyc-pensions-lose-8-65/

Excerpt:

The New York State Common Retirement Fund has reported a 9.51% investment return for fiscal year 2022, while the New York City Retirement System reported an annual preliminary loss of 8.65% among its five pension funds.

However, the fiscal year for the state’s pension ended March 31, while the city’s pension funds ended their fiscal year June 30, after a quarter during which global markets tumbled and the S&P 500 fell by more than 16%.

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The portfolio’s alternative investments buoyed the pension fund’s returns, which raised the portfolio’s asset value to $272.1 billion as of March 31. Private equity returned 37.57% for the year, while the fund’s real estate investments and real assets returned 27.4% and 16.12% respectively. The three asset classes account for nearly 24% of the portfolio’s total asset allocation. The pension fund recently reported that it had committed more than $3 billion in alternative investments during June alone.

The NYCRF had an asset allocation of 49.70% in publicly traded equities, 21.18% in cash, bonds and mortgages, 13.64% in private equity, 10.00% in real estate and real assets and 5.48% in credit, absolute return strategies and opportunistic alternatives. The fund’s long-term expected rate of return is 5.9%.

Author(s): Amy Resnick

Publication Date:

Publication Site: ai-CIO