Money managers are lobbying to scrap a Trump-era rule that makes it difficult for 401(k) plans to invest in socially focused funds.
The Labor Department rule, announced in October, imposed restrictions on what can and can’t be offered as company 401(k) funds. One result is that plans can’t use funds with nonfinancial goals as default investments for employees.
That means 401(k) overseers and managers need to show that environmental, social and governance strategies can boost financial returns—a challenge for the nascent industry. ESG-focused funds are a growing profit center for asset managers.
Lobbyists representing managers, pensions and retirees began making calls to the Biden transition team in the weeks after the rule was announced. Some lobbyists urged the incoming administration to agree not to enforce the rule and place it under review, said people familiar with the matter.
Still, a higher minimum wage puts pressure on smaller businesses that can’t raise wages as easily as large companies, which can adapt by deploying labor-saving technology or modestly adjusting hours for large workforces, said Jonathan Meer, an economist at Texas A&M University.
“It’s a lot harder for Joe’s Hardware,” he said. “We should take note that Amazon — the place with no cashiers — is the one calling for a higher minimum wage.”
Fewer than 250,000 people in the nation’s workforce of 140 million last year were paid exactly the federal minimum wage, which hasn’t changed since 2009, the Labor Department said last week.
Boston Mayor Marty Walsh has vowed to work with both parties as Labor Department secretary to address the hundreds of underfunded multiemployer pension plans in the U.S. that are now in danger of collapsing.
The big problem standing in his way? Congress has that power, not the U.S. Labor Department, according to labor attorneys and industry insiders. Which means that if Walsh is confirmed by the full Senate for the Cabinet spot, the two-term mayor will have to rely on his organized-labor background and a unique propensity to bridge divides and broker deals outside DOL’s scope to help rescue the tapped-out plans.
“The thing that is going to be pretty neat about going in to see Secretary Walsh is you’re not going to spend the first 20 minutes trying to explain what the heck a multiemployer pension plan is,” said Timothy Lynch, a senior director at Morgan Lewis in Washington who testified in 2018 before the now-defunct Joint Select Committee on the Solvency of Multiemployer Pension Plans.
This Report addresses the widespread underfunding of the retirement systems in the nation’s state and local governments. It begins by summarizing some past, current, and probable future trends of unfunded pension liability at the state and local levels. It describes the scope of unfunded pension debt in various state and local jurisdictions and calculates both their aggregate debt and per capita debt, based on states’ self-assessments; it then incorporates a variety of other measurements of unfunded liability. Results from many of those other measures suggest that the magnitude of unfunded pension liability may be considerably larger than previously indicated.
This Report then describes and analyzes the inherent dynamics of government retirement systems that have produced this underfunding, finding that there are a variety of pressures and processes within these retirement systems that can operate to the disadvantage of employees, beneficiaries, and the public generally. It then summarizes attempts to reform pension systems in several states. Some of those states now have relatively sound retirement systems; others less so. It then contrasts the requirements that govern most private-sector pensions to the relatively relaxed regulatory regimes of state and local government pensions, concluding that adoption of rules similar to those governing private sector requirements would likely have positive consequences if implemented for state and local government pension plans and their beneficiaries.
The nation’s experience with unfunded pension liability at the state and local government levels may provide some lessons for policymakers; this Report concludes with several recommendations in this area.
Author(s): Daniel Greenberg: Senior Policy Advisor in the Veterans’ Employment and Training Service; Jay Sirot: Special Assistant in the Office of the Assistant Secretary for Policy
The U.S. Department of Labor estimates that $63 billion – possibly more – has been paid out by state unemployment offices. California’s unemployment system alone says it paid out more than $11 billion to scammers in 2020. But who are these scammers? And how have they been able to collect upwards of $63 billion – including at least $330 million from Ohio? Here are some answers.
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At least 70 percent of the bogus unemployment claims originated overseas in countries such as Nigeria, according to Haywood Talcove, CEO of the security firm LexisNexis Risk Solutions, citing data from a dozen states (Ohio isn’t one of them) that have hired his firm to help secure their unemployment systems.
A large portion of these scams are conducted by organized crime rings with names like “Scattered Canary” and “Yahoo Boys,” Hall said. “They literally just live in compounds and all they do, 24/7 is try to figure out how to trick people into stealing their identity and, you know, stripping their bank account of funds,” he said.
It was reported that The Butch Lewis Emergency Pension Plan Relief Act of 2021, to be included in some covid-relief bill, would create a special financial assistance program under which cash payments would be made by the Pension Benefit Guaranty Corporation (PBGC) to financially troubled multiemployer pension plans so they could continue paying retirees’ benefits. The money would be provided to PBGC through a general Treasury transfer. Multiemployer pension plans eligible for the program would include plans in critical and declining status, and plans with significant underfunding that have more retirees than active workers in any plan year beginning in 2020 through 2022. Additionally, plans that have suspended benefits and certain plans that have already become insolvent would also be eligible.
So how many plans would that be? Based on the last full year of data (2018) from the DOL website here is how it breaks down.
The Department of Labor is no longer backing a twice-dismissed challenge to the CalSavers program, according to its Feb. 5 filing with the U.S. District Court for the Eastern District of California in Sacramento.
