Patricia Kubistal And Nancietta Stocking Kappa Chapter Lambda State Chicago, Illinois.
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Transcript of Patricia Kubistal And Nancietta Stocking Kappa Chapter Lambda State Chicago, Illinois.
RETIREMENT KIDNAPPED
Patricia KubistalAnd
Nancietta Stocking
Kappa Chapter
Lambda State
Chicago, Illinois
Carlene LutzSubstituting for Nancietta
OUR NEIGHBORS WERE ROBBED OF THEIR
RETIREMENT!
No one stole their identity
No one broke into their home
No one held them up
No Ponzi Scheme
NO POLICE REPORT
They had a plan◦ Worked Hard◦ Saved their money◦ Paid off their house◦ Invested in secure
bank CD’s
VICTIMS OF THE WAR ON SAVERS!
IN 2007 interest rates were above 4%
By 2012 interest rates were zero
Never have interest rates been this low for so long!
FEDERAL RESERVE
THEIR EARNINGS CAN NOT KEEP PACE WITH THE COST OF LIVING
WHICH IS ABOUT 4%THIS POLICY IS A DRIVE-BY
SHOOTING OF SENIORS
SOCIAL SECURITY CHECK The COLA was
withheld The COLA rate was
reduced The Medicare rates
increased Medicare rates
were based on income
Standard FAS 87 was intended to increase transparency, but instead employers reduced their liability
FINANCIAL ACCOUTING STARDARDS BOARD
An employee earns $1,000 but agrees not to be paid until the next year and the company records deferred compensation or a debt.
The next year the employer cuts the salary to $600. The employer saves $400 and reduces his debt by $400 which under the accounting rule is recorded as a gain.
HOW THIS WORKS
The company cannot take away money retirees have received
But it can slow the growth of the pension
Freeze the plan Lay off workers
AND THE BEAT GOES ON
Every dollar promised a retiree for◦ Pensions◦ Prescription drugs◦ Dental coverage◦ Life insurance◦ Death benefits
Is seen as a dollar that could potentially be added to a company’s income. The money owed 3 generations of employees becomes earnings enhancements!
THROUGH THE EYES OF THE ACCOUTNANT
ANOTHER VIEW
WAYS WE ADJUST PENSIONS
Employers says What They Mean
We are restructuring our pension plan. They move into “account style” or “cash balance” plans
Younger employees with limited tenure will benefit while older employees can lose as much as 20% to 50% based on new formula calculations
Balance sheets sometimes indicated that higher pension costs account for recent company losses
What they did not say was that the higher costs stemmed not from the regular pension plan but supplemental pension plans given only to top executives
HIGHER PENSION COSTS
Lump sum payouts are offered as though they are a special perk.
However, they may be worth significantly less than the value of the monthly pension check that they replace because of the way the formula is calculated
LUMP-SUM PENSION PAYOUTS
Underfunding is blamed on:◦ Stock market losses◦ Lower interest rates◦ Life spans increasing◦ Rising medical costs◦ COLA factors
While some of these statements bear truth, they do not state what often are the most significant reasons for the underfunding
PENSION IS UNDERFUNDED
Employers have siphoned billions of dollars out of the plans
Employers have failed to fully fund plans as required
Employers have used pension assets to fund buyouts
Employers have used pension assets to pay termination benefits when cutting the workforce.
TRUTH BE TOLD
Employers have used employee pension funds for golden parachutes for top executives
EXECUTIVE PARACHUTES
Have adopted the ways of industry
Some officials including educators have pensions of over $320,000 as their golden parachute
GOVERNMENTAL AGENCIES
School Districts and States that are required to make payments into funds are making reduced payments or no payments at all.
SCHOOL DISTRICTS/STATES
They claim that when they meet operating costs that there is no money to make payments
After years of non-payments, the payment is beyond their means
They publish the salaries of the highest paid pensioners who do not reflect the average pensioner
WHAT THEY DO SAY
Pension law does not allow retirees and employees to sue for punitive damages or compensation for pain and suffering when retiree’s benefits are illegally denied to them
LAW VS. PENSIONER
Retirees can sue only to reclaim the improperly eliminated benefits.
Pension lawsuits tend to be so lengthy and expensive
LAWSUITS
In 15 states, individuals may receive only 40% of their entitled social security benefits.
SOCIAL SECURITY BENEFITS The Windfall law
denies full social security benefits to those individuals who have earned benefits but receive a public pension
Companies are bought out; they merge and pension obligations follow.
The new company feels no loyalty to retirees who never worked for them
So they cut their benefits
Or they look for overpayments under their plan and demand repayment of prior overpayments
TRANSFER PENSION PLAN
Promised health insurance benefits from age 55 to 65 or supplemental for age 65 and above disappears or is greatly reduced
HEALTH INSURANCE
They bury “reservation of rights” clauses deep in the legalese of benefit plain documents.
Or state or municipal bodies enact legislation which takes away health benefits or greatly reduces them.
HOW CAN THEY DO THIS?
10 year freeze on COLA
Five year increase in retirement age
A two-tiered pension system
Increase employee contributions
Governmental agencies defer making their contributions and they never make the payment.
COMMONLY PROPOSED CHANGES
In Illinois we barely defeat Amendment #49 on the blue ballot. It changes our fundamental rights to a pension as we have it today. Be vigilant
DEFEAT AMENDMENT # 49
Funds are like pyramids in that the top—retirees—are supported by the contributing workers and employers.
NATURE OF PENSION FUNDS
32% of 18 – 29 year olds are either unemployed or working part-time while searching for full time employment
BEING PINCHED
An American male with only a high school diploma earns less than his counterpart of 35 years ago.
Student loan debt outweighs credit card debt!
FALLING BEHIND
A family headed by people 35 – 44 will be 70% poorer than their counterpart in 1984
The birth rate has declined by 185,000 in 2009 over 2007
RETIREES SUPPORTERS
GRIM FUTURE says Employee Benefit Research Institute
60% of workers have less that $25,00o in total savings and investments excluding home and defined benefits
30% have less than $1,000
The Unions after WWII began to negotiate benefits including pension plans
Governmental workers had pension plans
UNIONS AND BENEFITS
WHAT GROUP OF INDIVIDALS HAS THE LARGEST UNION?
TEACHERS!WITH MEMBERSHIP IN NEA AND AFT!
On teachers’ collective bargaining rights On teachers’ performances in the school From a once revered position to the scape
goat for the problems in education
TODAY WE ARE ATTACKED!
We become vigilant to all proposed changes to our pension plans
We contact our representatives and express our concerns
WHAT’s OUR PLAN?
Call, email, snail mail all family members, friends and neighbors to contact legislators about pension issues
Speak at gatherings
WORK TO DEFEAT PENSION CHANGES
NEED A PLAN
ONE PLAN THAT IS USED
DIFFERENT VIEW
IF ONLY WE KNEW…
Be conservative Look for best rates Credit Unions Select a trusted
financial advisor
PERSONAL FINANCES
FUTURE COSTS
CHANGES IN PLANNING
CONSIDER EMPLOYMENT
A CLOSING THOUGHT ON INVESTMENTS
DOUBLE YOUR INVESTMENT
If you had invested $1,000 in Nortel one year ago.
$1,000 in Enron $1,000 in
World.com $1,000 in Delta Air
Lines
Today Nortel would be worth $49.00
Today you would have $16.50
Today you would have less then $5.00
You would have $49.00
RETIREMENT PLANING
You had purchased $1,000 worth of beer one year ago
Drunk all the beer Turned in the cans
for recycling
BUT IF
Based on the above, the best current investment advice is to drink and recycle.
It is called the 401Keg plan
YOUR REFUND WOULD BE $214.00