The Ninth Circuit Court of Appeals recently addressed several issues of first impression in Bafford v. Northrop Grumman (9th Cir. April 15, 2021), a lawsuit involving retirees who received vastly overstated pension benefit estimates from the plan’s recordkeeper reminds employers of the importance of careful administration. The case highlights the need to ensure that electronic recordkeeping systems and tools align with the plan terms. Participant requests for plan or benefit information using online portals or other electronic means still demand timely and accurate responses as required by ERISA’s disclosure requirements.
On appeal from the district court, the Ninth Circuit agreed that the participants’ ERISA fiduciary claims should have been dismissed, aligning with the First and the Fourth Circuit’s view that a named fiduciary is only liable for a fiduciary breach if they are performing a fiduciary function. The court said that calculating pension benefits using a pre-set formula is a ministerial function, not a fiduciary function. So a miscalculation error would not create a breach of fiduciary duty claim.
New Jersey’s public-worker pension fund continues to own a small stake in a company that manufacturers firearms, several years after Gov. Phil Murphy and lawmakers first raised concerns about public investments in the gun industry.
As of earlier this month, the pension fund owned shares worth an estimated $28 million in a company that, among other products, specializes in making custom sporting shotguns and rifles, according to the latest information provided by the Department of Treasury.
However, the overall $85 billion worker-pension fund has cut ties in recent years with a manufacturer of firearms ammunition, which had been its only other direct link to the firearms industry, Treasury officials confirmed.
INDIA’S SECOND wave of covid-19 continues to set grim new records. On April 25th India detected more than 350,000 new cases—the most in a single day in any country at any stage in the pandemic. This number has reached new highs for five days in a row (see chart). So bad has India’s outbreak become that it now accounts for some 38% of global cases—up from just 9% a month ago. That is the highest share reached by an individual country since the early stages of the pandemic.
The high case-fatality rate–especially among young adults–during the 1918-1919 influenza pandemic is incompletely understood. Although late deaths showed bacterial pneumonia, early deaths exhibited extremely “wet,” sometimes hemorrhagic lungs. The hypothesis presented herein is that aspirin contributed to the incidence and severity of viral pathology, bacterial infection, and death, because physicians of the day were unaware that the regimens (8.0-31.2 g per day) produce levels associated with hyperventilation and pulmonary edema in 33% and 3% of recipients, respectively. Recently, pulmonary edema was found at autopsy in 46% of 26 salicylate-intoxicated adults. Experimentally, salicylates increase lung fluid and protein levels and impair mucociliary clearance. In 1918, the US Surgeon General, the US Navy, and the Journal of the American Medical Association recommended use of aspirin just before the October death spike. If these recommendations were followed, and if pulmonary edema occurred in 3% of persons, a significant proportion of the deaths may be attributable to aspirin.
And applying the higher capital gains rate to top earners, who tend to be wealthy, creates bigger distortions because these taxpayers have many tools to avoid the tax. For example, when you inherit assets subject to estate taxes, the capital gains tax that you pay is based on when the asset was transferred to you, instead of when it was bought. This is known as a step-up in basis. Doubling the tax rate makes this provision much more attractive, and word is that the Biden plan nixes it. High earners can find other ways to get around this tax with the right advice. Certain asset classes, such as investment real estate, offer a chance to lower liability. We may also see more high-net-worth investors move further into the murky world of private equity, where values are easier to distort.
There are better ways to collect investment-income revenue. Getting rid of step-up in basis is a start; the administration could also take on the myriad loopholes that favor different asset classes. But these approaches don’t offer the stick-it-to-the rich satisfaction of doubling the rate on investment income—even if we all wind up paying for it.
You can’t compare results from Bayesian and frequentist methods because the results are different kinds of things. Results from frequentist methods are generally a point estimate, a confidence interval, and/or a p-value.
In contrast, the result from Bayesian methods is a posterior distribution, which is a different kind of thing from a point estimate, an interval, or a probability. It doesn’t make any sense to say that a distribution is “the same as” or “close to” a point estimate because there is no meaningful way to compute a distance between those things. It makes as much sense as comparing 1 second and 1 meter.
In courtrooms, mixing up the probability of “A given B’” with “B given A” is known as the “prosecutor’s fallacy”. In 1999, a court convicted Sally Clark of the murder of her two sons, in part because a medical expert claimed the chance of two accidental cot deaths was one in 73m. Even if this number was right – which it isn’t – it did not reflect the chance she was innocent. A double murder was also very rare: the relative likelihood of the two explanations was key and with new evidence and better statistical reasoning, an appeal court quashed the conviction.
There was controversy after a recent Observer headline referred to Bayes’s theorem as “obscure”. His ideas may be little known by the public, but they are growing among scientists. Many complex analyses done during the pandemic have been “Bayesian”, including modelling lockdown effects, the ONS infection survey, and Pfizer-BioNTech’s vaccine trial. The term “credible interval”, rather than “confidence interval”, is the giveaway.
Last week, Cass Business School announced the renaming of its institution after Bayes and his theorem. The obscure tomb in nearby Bunhill Fields is worth a visit.
Based on the bureau’s estimates, the latest tally is likely to show that the growth in the number of people living in the U.S. has slowed to the lowest rate the country has seen since the 1940 census was conducted in the wake of the Great Depression. Disruptions from COVID-19 during last year’s counting, however, have made shifts in each state’s population particularly hard to predict.
Last year’s tally was the country’s 24th census — a once-a-decade tradition required by the Constitution since 1790 — and it is the ninth count for which the U.S. government has attempted to include every person living in the country in the numbers used for reapportioning seats in Congress. Before the 1940 census, the phrase “excluding Indians not taxed” in the Constitution excluded some American Indians from the apportionment counts.
Connecticut has opened the door for a statewide property tax that has no upper limit. It offers a “new” tax revenue source for states such as New Jersey that have failed to address their structural deficits and continue to live beyond their means. Many New Jersey homeowners refer to their local property tax bills as a second mortgage, since the burden often rivals or exceeds the monthly payments on their home purchase.
A review of New Jersey’s modern history of taxes shows citizens should rightly be concerned.
Our state enacted a personal income tax in 1976 to support public schools and provide property tax relief. The tax began with a simple two-rate structure consisting of a 2.0% rate on income below $20,000 and a 2.5% rate on income above $20,000. In 45 years, 8 brackets have been introduced without any substantive update to account for inflation, making this more burdensome over time. The only meaningful change has been to establish a new top rate of 10.75%, the 3rd highest in the nation.
The state income tax eventually failed to stem the rise in the highest property taxes in the country since it was based on providing money to hundreds of de facto fiefdoms with no oversight. Ms. Egea goes on to speculate that Governor Murphy, with an even more pressing need for revenue, has another new tax in mind:
In 1976, New Jersey voters passed a constitutional amendment that dedicated the entire income tax to the Property Tax Relief Fund and lower property taxes in 1997 did help Brendan Byrne get reelected. There is no time for that this year so expect the massive debt and structural budget deficit to be the excuse for this new tax that should be hitting in 2022.
In a new INET working paper, we examine inequality in employment outcomes across social groups during recessions. We take a comparative perspective, studying results from two recent and severe US recessions: the “Great Recession” linked with the global financial crisis beginning in late 2007 and the “lockdown” recession caused by the COVID-19 pandemic. Comparing these two events presents an interesting case study to explore inequality in recessions.
The severity of a recession depends both on how much employment declines and the persistence of those declines. The primary job-months lost statistic in our analysis is designed to capture both of these dimensions. This measure simply adds up the difference between actual employment and pre-recession employment over the recession months. For example, if the pre-recession employment trend for a demographic group was flat and a person in that group lost a job in April but went back to work in July, that person’s experience would add three job-months lost to the total in their demographic group.
Author(s): Steven Fazzari, Ella Needler
Publication Date: 19 April 2021
Publication Site: Institute for New Economic Thinking