Data & Research April 24, 2012

Older Workers Want to Work

More than three-quarters of middle-income Americans (76%) between the ages of 50 and 69 say they are sticking with their jobs because they want to.
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 In addition, one in four workers in this age group (27%) says this is the happiest time of their working career, and another one in ten (11%) believes the best is yet to come, according to the Older Workers and Money Survey released by Charles Schwab & Co.   

Older workers generally start their workdays in a positive frame of mind, feeling engaged, respected, valued and happy. Women are even more likely than men to stay with their jobs because they like what they do (63% vs. 56%).   

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The majority of workers age 50 to 69 say they like what they do (59%) and the people they work with (49%). More than two-thirds (67%) consider themselves ahead of the game when it comes to job skills and report being “intellectually stimulated,” “still learning” and “working to [their] full potential” at their jobs.   

However, there are some differences between people in their 50s and those in their 60s when it comes to contentment in the workplace. More people in their 60s than in their 50s say they don’t plan to stop working (34% vs. 25%, respectively). Nearly twice as many workers in their 60s as 50s say they just don’t want to retire (32% vs. 19%).   

People in their 60s are more likely to work part-time and enjoy the flexibility of doing so, like the people they work with, feel they would be bored if they were not working, and not feel ready to retire or simply not want to, the study shows.   

Conversely, people in their 50s more often feel stuck in their jobs than do people in their 60s, perceiving greater barriers to changing jobs. They say they are sticking with their current employer because they need the money (64% vs. 55%), because they feel it would be tough to switch jobs in this economy (52% vs. 29%) or because they do not want to start over and lose seniority (29% vs. 17%).

 

(Cont...)

Tapping Into Older Workers’ Experience  

Older workers tend to serve as mentors to their younger colleagues, with more than two-thirds (68%) providing advice on a range of topics, including how their younger colleagues can do their jobs better, how to handle professional issues and how to navigate around the organization. Some even provide advice on how to make the most of workplace benefits (26%). Because their single greatest piece of financial advice to a 30-year-old is to "live within a budget," followed by "maximize your 401(k), IRA or retirement account," there may be an opportunity for employers to tap into the wisdom of this group of workers to help promote financial fitness in the workplace.   

A majority of older workers express confidence that they will have enough income to be comfortable in retirement (62%), even though their personal finances may not support that. Nearly half (47%) have less than $100,000 in investable assets. More workers in their 50s than 60s say they will rely a lot on 401(k) income during retirement.   

Older workers are interested in and receptive to learning about how to improve their financial lives. The top three choices of topic that might make the biggest impact on their lives, if given the choice of a personal finance workshop, were “investing [their] money for growth and income," "planning for income in retirement" and "living within a reasonable budget."  

To see the full survey results, visit schwabmoneywise.com/2012survey.

 

Compliance April 24, 2012

JPMorgan Cleared of Charges for Lehman Investments

JPMorgan Chase did not breach its fiduciary duties to a pension plan by investing the plan's assets in Lehman Brothers notes through JPMC's securities lending program.
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In dismissing the charges against JPMorgan Chase (JPMC), U.S. District Judge Barbara S. Jones of the U.S. District Court for the Southern District of New York pointed out that the fiduciary duty to act prudently under the circumstances at the time of the decision precludes any judgment of a fiduciary’s actions “from the vantage point of hindsight.” Even if references to news articles and basic financial modeling were sufficient to make it “theoretically conceivable” that JPMC should have known about Lehman’s weakening financial condition, such speculation is not enough to defeat a motion to dismiss, Jones said.  

Jones did agree that JPMC’s actions in 2008—demanding additional collateral and taking advantage of Lehman’s weak negotiating position—suggest that JPMC harbored some concerns about Lehman’s creditworthiness, but she found that does not indicate JPMC knew that maintaining the plan’s investments in Lehman was unduly risky.  

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The court also found the board of trustees of the Operating Engineers Pension Trust failed to provide facts to support its assertion that JPMC violated its duty to monitor the investments. “Plaintiff alleges only in the vaguest terms that JPMC failed to conduct a proper investigation into the Lehman investments and that JPMC did not exercise independent judgment in deciding to keep the plan invested in the Lehman notes,” Jones wrote in her opinion.  

Finally, the court rejected the pension plan’s assertion that a conflict of interest arising out of the fee arrangement between the plan and JPMC motivated JPMC’s breach of fiduciary duty. Jones concluded the plan entered into the securities lending arrangement freely and after arms-length negotiations; it cannot now claim the fee arrangement to which it agreed creates a conflict of interest to JPMC’s unfair advantage.  

The court opinion is here.  

 

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