...Public Pension Reform (Senate Bill 1673, Sen. Kwame Raoul, D-Chicago; House Republican Leader Tom Cross, R-Oswego) This legislation overhauls the benefit structure and funding mechanism for TRS pensions. Preliminary estimates indicate that for TRS alone, the proposal would save the state budget $54.1 billion to $57.7 billion over the next several decades and erase the unfunded liability of TRS and the other state pension systems by 2043. Senate Bill 1673 applies to both active members and retired members already receiving an annuity. Here is a menu of proposals lawmakers are considering for the bill that would affect active TRS members: Active and Retired Members – This proposal would apply the legislation’s provisions to both active members and retired members who are receiving an annuity. A Benefit Choice for the Future: COLA and Health Insurance – This proposal calls on all active, inactive and retired TRS members to choose between two options in the make-up of their retirement benefits after July 1, 2013. This irrevocable, one-time election would have to be made between January 1, 2013 and May 31, 2013. This proposal would save state government an estimated $33.4 billion to $37 billion over 30 years. * Option 1: Accept a change in the annual Cost Of Living Adjustment (COLA) for a TRS pension – from 3 percent compounded to a COLA that is capped at 3 percent or one-half of the consumer price index, whichever is less. The COLA would not be compounded. The TRS member...
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...with the firm for over 30 years. For the past 12 years he had served as Gazelle’s training and development manager and felt that he had been doing a good job. This belief was supported by the fact that during the last five years he had received excellent performance reports from his boss, LaConya Caesar, HR director. Six months before Les’s birthday, he and LaConya were enjoying a cup of coffee together. “Les,” said LaConya, “I know that you’re pleased with the progress our T&D section has made under your leadership. We’re really going to miss you when you retire this year. You’ll certainly live the good life because you’ll receive the maximum retirement benefits. If I can be of any assistance to you in developing the paperwork for your retirement, please let me know.” “Gee, LaConya,” said Les. “I really appreciate the good words, but I’ve never felt better in my life, and although our retirement plan is excellent, I figure that I have at least five more good years. There are many other things I would like to do for the department before I retire. I have some excellent employees, and we can get many things done within the next five years.” After finishing their coffee, both returned to their work. As LaConya left, she was thinking, “My gosh, I had no idea that character intended to hang on. The only reason I gave him those good performance appraisals was to make him feel better before he retired. He was actually only an average worker and I was anxious to move a more aggressive...
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...account is equal to the market value of the assets accumulated. It is not based on the employee’s working years or the earnings performance. A defined-contribution plan is very different with the defined-benefit plan. A defined-benefit plan is a type of pension plan for employee’s benefits during retirement. It is controlled by employers who contribute a specified monthly benefit for employees. The amount is predetermined by a formula based on the employee's earnings history, the tenure of service and age. It does not depend directly on individual investment returns. Unlike with a defined-benefit plan, employees have to control over how much to contribute and how much to invest. Compared with defined-benefit plans offer employees an annuity at retirement, defined-contribution plans are riskier. Employees need to take responsibility for their retirement income; they need to bear the investment risk. There are four types of defined-contribution plans: 401(k) plans, 403(b) plans, 457 plans and Thrift Saving Plans. They are similar plans since they are ways to save for employee’s retirement that employer provides, but they have different target groups, “401(k) s are the version that corporations offer to their employees. (Roth 401(k) s are a subgroup that has different tax treatment.) 403(b) s are for employees of public education entities and most other nonprofit organizations. 457s are for state and municipal employees, as well as employees of qualified nonprofits. Thrift...
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...Melanie Inc. wishes to accumulate funds to provide a retirement annuity for its Vice President of Research, Edward Miles. Mr. Miles by contract will retire at the end of exactly 20 years. On retirement, he is entitled to receive an annual end-of-year payment of $60,000 for exactly 30 years. If he dies prior to the end of the 30-year period, the annual payments will pass to his heirs. During the 20-year ‘accumulation period’, Melanie Inc. wishes to fund the annuity by making equal annual end-of-year deposits into an account earning 7 percent interest compounded quarterly. Once the 30-year ‘distribution period’ begins, Melanie Inc. plans to move the accumulated monies into an account earning a guaranteed 12 percent per year compounded semi-annually. At the end of the distribution period the account balance will equal zero. Note that the first deposit will be made at the end of year 1 and the first distribution payment will be received at the end of year 21. Required: a) Draw a time line depicting all of the cash flows associated with Melanie Inc.’s view of the retirement annuity. [2 marks] b) How large a sum must Melanie Inc. accumulate by the end of year 21 to provide the 30-year, $60,000 annuity? [3 marks] c) How large must Melanie Inc.’s equal annual end-of-year deposits into the account be over the 20-year accumulation period to fund fully Mr. Miles’s retirement annuity? [5 marks] d) How much would Melanie Inc. have to deposit annually during the accumulation...
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...A Person in the Next Decade Student’s Name Institutional Affiliation A Person in the Next Decade INTRODUCTION As a young person, I am tasked with coming up to terms with the inevitability of change. It remains extremely impossible to remain fearless about the future. A lot of effort and courage remains a great requirement for having a purpose driven life because it’s not always easy. Life seems unpredictable in most cases and, as a result, all young people approach the future as blind nomads. In life, most people tend to believe that they will remain the same as they seem now in the next decade. Regardless of the age of an individual, they always tend to act in a way that suggests that history shaped them to the people they become. One thing remains certain, personalities and values keep changing. I will experience a lot of differences in 2025 as compared to now 2015. In a decade all human beings experience great changes in terms of their personality and their lives. A COMPARISON OF RELATIONSHIP DEVELOPMENT IN A DECADE There exists a great difference in the relationship status of an individual between a lifespan of 2015 and 2025.I am a single 38-year-old man currently studying and working. I am looking forward to studying network administration, marrying and having children. I wish to become an entrepreneur in the future and open my networking firm. The future seems so near when I have a lot of activities in the plan. Currently, in my case there seems a less sense of...
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...pension plans as a benefit for most US employees and certain employees in foreign locations. The pension benefit amounts depend of the length of service, job difficulty and salary. Alcoa provides a defined contribution plan to their US employees. In a defined contribution plan a company makes a contribution, but does not promise the future benefit to the employees. In this type of pension benefit the employees take on the risk instead of the company. U.S. employees hired before March 1, 2016 participate in a defined benefit plan. In a defined benefit pension plan employees know the terms of the benefit that they will earn when they retire and the company is liable to provide the employees with that benefit. Alcoa also maintains health care and life insurance postretirement benefit plans....
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...Ryan Murphy MKT 410 2/1/12 Assignment #1 1. The Spending Potential Index is used to analyze household spending on any particular product or service type. The Spending Potential Index (SPI) can be calculated by dividing the local average expenditure of a certain product by the United States average expenditure on that same product. The equation looks like this: SPI = [Local Average Expenditure ÷ U.S. Average Expenditure] x 100 The average value of the SPI is 100, though it is not abnormal for an SPI of a particular product to be somewhat higher or lower than the average. By inserting relevant data, one can see whether or not their local economy spends more or less than the national average on a certain product or service. A score below 100 indicates that there is less spending than average, while a score above 100 indicates spending higher than the national average. 2. The Spending Potential Index can be a valuable asset to marketing managers in the sense that it indicates the products and services that the people of a certain geographical region desire the most. For example, a marketing manager for a retirement plan company could use the SPI to find an area to find potential customers. Boulder has an SPI of 150 in this specific industry, which is considered to be extremely high. If there is an opportunity for this marketing manager to expand into Boulder, he/she would likely be able to find many clients, as the Boulder population clearly has a tendency to spend...
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...in Europe, a stretch in which it's lost more than $16 billion. 2. Solving pension issues. Evidence: The automaker hopes to reduce its $134 billion long-term global pension obligations by $26 billion, a problem that has been a noose around GM’s neck for years. Chosen problem: Solve pension issues.it accounts for a greater amounts of money.Secondly, Pension is a never ending issue till the company survives B. Alternative course of action to address the problem- -Lump-sum pension to ease obligation, reduce its long-term pension liabilities for salaried workers. -Offer 42,000 white-collar retirees in the U.S. a lump-sum payment in lieu of their monthly pension check and will transfer pension responsibility for 76,000 others to a group annuity plan managed by Prudential Insurance. -reduce its $134 billion long-term global pension obligations by $26 billion. - The company’s global pension plans are underfunded by $25 billion - A buyout program for G.M.’s union retirees would further reduce long-term obligations. The company has more than 400,000 blue-collar retirees and surviving spouses Pros for GM - Significantly reducing GM’s ongoing pension liabilities. - It’ll help strengthen its balance sheet Pros of lump-sum pension plan for retirees - Control of the assets .. -Lump sums offer broader, more flexible legacy planning options Cons of lump-sum plan for retirees Investment risk. http://www.forbes.com/sites/joannmuller/2012/08/16/leadership-not-another-bailout-will-fix-general-motors/ ...
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...with the firm for over 30 years. For the past 12 years he had served as Gazelle’s training and development manager and felt that he had been doing a good job. This belief was supported by the fact that during the last five years he had received excellent performance reports from his boss, LaConya Caesar, HR director. Six months before Les’s birthday, he and LaConya were enjoying a cup of coffee together. “Les,” said LaConya, “I know that you’re pleased with the progress our T&D section has made under your leadership. We’re really going to miss you when you retire this year. You’ll certainly live the good life because you’ll receive the maximum retirement benefits. If I can be of any assistance to you in developing the paperwork for your retirement, please let me know.” “Gee, LaConya,” said Les. “I really appreciate the good words, but I’ve never felt better in my life, and although our retirement plan is excellent, I figure that I have at least five more good years. There are many other things I would like to do for the department before I retire. I have some excellent employees, and we can get many things done within the next five years.” After finishing their coffee, both returned to their work. As LaConya left, she was thinking, “My gosh, I had no idea that character intended to hang on. The only reason I gave him those good performance appraisals was to make him feel better before he retired. He was actually only an average worker and I was anxious to move a more aggressive...
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...National Social Security Authority of Zimbabwe (NSSA) Established in terms of the NSSA Act of 1989, Chapter 17: 04. At the moment NSSA is administering two schemes But the groundwork for the introduction of more schemes is underway. National Pension Scheme (NPS) Established, and is administered, in terms statutory Instrument 393 of 1993 and introduced in 1994. This scheme is based on a 50/50 contribution from the employers and the emplyees. The members of the scheme are entitled to the benefits after a minimum contribution period and have met the qualifying condition of each of the benefits. Every Zimbabwean above 16 years old and under the age of 65 who is in permanent, seasonal, contract or temporary employment are able to be a member of the scheme. And all the Zimbabwean that meet this criteria are obliged by law to become a member contribute to the scheme. Once an employee attains the age of 65, deduction of contributions in respect of the employee should cease even if he/she continues to work. This not includes domestic workers and the informal sector yet. Membership to the scheme is compulsory regardless of whether the employee is covered by a private scheme. The Authority are informed of any changes or developments in the business of the employers, so NSSA can adjust the insurance premiums and records accordingly, in line with any changes as and when they occur. The contribution is made by an equal monthly amount of 4% of the employee’s monthly salary by both employers...
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...A Person in the Next Decade Student’s Name Institutional Affiliation A Person in the Next Decade INTRODUCTION As a young person, I am tasked with coming up to terms with the inevitability of change. It remains extremely impossible to remain fearless about the future. A lot of effort and courage remains a great requirement for having a purpose driven life because it’s not always easy. Life seems unpredictable in most cases and, as a result, all young people approach the future as blind nomads. In life, most people tend to believe that they will remain the same as they seem now in the next decade. Regardless of the age of an individual, they always tend to act in a way that suggests that history shaped them to the people they become. One thing remains certain, personalities and values keep changing. I will experience a lot of differences in 2025 as compared to now 2015. In a decade all human beings experience great changes in terms of their personality and their lives. A COMPARISON OF RELATIONSHIP DEVELOPMENT IN A DECADE There exists a great difference in the relationship status of an individual between a lifespan of 2015 and 2025.I am a single 38-year-old man currently studying and working. I am looking forward to studying network administration, marrying and having children. I wish to become an entrepreneur in the future and open my networking firm. The future seems so near when I have a lot of activities in the plan. Currently, in my case there seems a less sense of...
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...college recruiters, and 20 additional face books, I calculated that the profit for adding 32 more teams to the tournament would be close to $13,000. I also determined that renting additional fields will be avoided if two days are added onto the tournament. Two days for the middle-school brackets, and two days for the high school brackets. This may increase the cost for hotels for the college recruiter’s. I believe, however, that they will be more inclined to attend the high school tournaments and not the middle-school tournaments. If this is the case, the result would be the same two night stay with the only increase being in the 15... 1 Solution for Craddock Cup Case Study Chapter 5 1- You want to find the time value of the annuity below at end of year 3 (t=3)....
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...when the funds are finally withdrawn. 4. Vested benefits are not forfeitable for any reason other than death. If you are fired, or you quit, but in either situation you still retain the right to receive all the vested retirement benefits. ERISA requires all employees to a retirement plan that must immediately best. Under the cliff vesting none of the employer contributions are bested until certain years of service are accumulated after which contributions are one hundred percent vested. Graded vesting gradually vests contributions over several years. 10. Fixed annuities can only be increased where as the variable annuity can move both up and down. The interest rate is guaranteed for a short period of time like a year. After the initial period, the interest rate can be changed at the discretion of the insurance company. So as long as it doesn't fall below that minimal interest rate, like three percent. Variable annuities are...
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...Renee Kelly Week 3 Assignment OUTLINE Topic: “In the United States, we do not need to plan for retirement. Social Security will cover our needs when we are retired.” Thesis: Retirement is a time to break away from a hectic schedule and enjoy life. Retirement also can be a time of change and unexpected challenges. Planning for retirement with a solid financial investment is the key to providing financial security for life’s “golden years.” Relying solely on Social Security benefits to fund your retirement will place your financial security at risk. Organization: Order of importance. Purpose and audience: To show a solid financial plan for retirement is possible at any age, and the importance of not relying on Social Security as a sole means of taking care of day-to-day expenses. This essay is intended for an audience interested in learning how to make wise choices for their retirement, especially those who are planning to rely on Social Security benefits only. I. Relying solely on Social Security to fund for retirement may be a recipe for financial failure. A. Current research states the Social Security fund may be depleted of funds by the time most people are ready to retire in the next ten (10) years. B. Provide government statistics indicating current rate of payouts as opposed to program’s available funds. C. Current economic research showing of increasing...
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...what is the minimum amount of money you must have in your retirement account on your 65th birthday, before you take your first retirement withdrawal of $200,000? 2) Now that you have calculated how much you will need in a retirement account on your 65th birthday you must plan on how you will accumulate the money! Your plan is to begin making deposits into a new retirement account beginning on your 31st birthday, and make the same deposit each year until the final deposit on your 65th birthday. If your retirement account pays a 5% annual return, what is the minimum annual deposit you must make into your retirement account to meet your retirement goal? Question #1 1. Must have $200,000 2. *have to find present value of growing annuity 3. PV= 200,000 x (1/.05-.03) x[ 1- (1.03/1.05)20 ] 4. PV= 200,000 x (1/.02) x .32 5. PV= 200,000 x (.32/.02) 6. PV= $3,200,000 7. *Find present value of $50,000 when he is 65 8. PV= FV/ (1+r)n 9. PV= 50,000/ (1.05)10 10. PV= $30,695.66 11. *Find total amount of money needed by the age of 65 to be able to live off of for a minimum of 20 years 12. $30,695.66 + 3,200,000 + 200,000 = $3,430,695.66 Question #2 1. Fv =PV + (1+r)n 2....
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