Political Party Drives Savings Approach

Transition Boomers—those less than 10 years from retirement—agree that rising health care costs will have the greatest effect on their retirement outlook.

According to the 2012 Retirement & Politics Survey from Allianz Life Insurance Company of North America, 67% of all Transition Boomers, regardless of party affiliation, listed health care expenses as their top concern, with Republicans at 64%, Democrats at 69% and Independents at 66%. Social Security ranked second at 53% for all Transition Boomers, followed by tax payment changes (31%), rising national debt (26%), unemployment (19%) and education (4%).   

When it comes to overall retirement savings philosophy, 59% of Republican Transition Boomers identified themselves as being conservative or moderately conservative compared with 36% of Democrats. However, Democrat Transition Boomers were more likely to be balanced in their retirement savings approach, with 29% identifying themselves as balanced versus 18% for Republican Transition Boomers.   

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Regarding the effect the election will have on their approach to retirement savings, 29% of Republican Transition Boomers were likely to become more aggressive if Mitt Romney wins while 30% of Democrats would become more conservative. If President Barack Obama is re-elected, 81% of Democrat Transition Boomers anticipate no changes to their retirement approach while 42% of Republicans said they would become more conservative.

 

(Cont’d…)

Thirty-nine percent of Independents and 29% of those with no preference identified themselves as conservative or moderately conservative, while 30% of Independents and 34% with no preference identified themselves as balanced in their retirement savings approach.   

The majority of this group of Transition Boomers also said the outcome of the election would not trigger a change in their retirement savings strategy. Specifically, if President Obama is re-elected, 64% of Independents and 75% of no preference Transition Boomers said they would keep the same retirement savings strategy. If Romney wins, 61% of Independents and 73% of no preference Transition Boomers said they would keep the same retirement savings strategy.  

Retirement planning is clearly important to all Transition Boomers. Seventy-two percent began saving for retirement in their 40s or earlier, and 28% started in their 30s. More Republican Transition Boomers (79%) than Democrats (69%), Independents (71%), or Transition Boomers without political party preference (67%) said they have started saving for retirement prior to age 50.   

In total, 17% of Transition Boomers indicated they haven’t begun saving for retirement yet. Only 12% of Republicans,19% of Democrats, 19% of Independents and 23% of those with no party preference said they have not yet begun saving for retirement.  

The Allianz Life 2012 Retirement & Politics Survey was commissioned by Allianz Life Insurance Company of North America and conducted September 17 to 20, 2012, among a random sample of online panelists by Ipsos. The results included 1,209 respondents ages 55 to 65.

 

Informal Inquiry Protected Under ERISA

A court ruled that an informal inquiry by a plan participant about mismanagement of plan assets is protected activity under the Employee Retirement Income Security Act (ERISA).

The 7th U.S. Circuit Court of Appeals found that the wording in Section 510 of ERISA is vague—particularly the definition of “inquiry”—and that when dealing with ambiguous anti-retaliation provisions, it is supposed to favor the protection of employees. ERISA Section 510 prohibits retaliation “against any person because he has given information or has testified or is about to testify in any inquiry or proceeding relating to this [Act].”

The appellate court dismissed a district court’s opinion in favor of Junior Achievement of Central Indiana Inc. and sent it back for further proceedings. Junior Achievement argued that former vice president Victor George could not make a Section 510 claim because Section 510 only protects testimony in formal proceedings and formal inquiries by the employer of the participant, and not by the participant of the employer. 

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The appellate court found that the best reading of Section 510 is one that divides the world into the informal sphere of giving information in or in response to inquiries and the formal sphere of testifying in proceedings. It determined that George’s complaints constituted an “inquiry” because Junior Achievement responded to them rather than ignoring them.

 

(Cont’d…)

The court also cited a 9th U.S. Circuit Court of Appeals opinion that said reporting misconduct is a necessary step in the start of any formal inquiry and that if informal beginnings are not covered in this section, employers would then be inclined to dismiss employees as soon as they complained. The 7th Circuit also disagreed that the inquiry must be asked of the employee rather than the employer, finding that the statute does not specify who asks the question or initiates the inquiry.

In the summer of 2009, George discovered that money withheld from his pay was not being deposited into his retirement account and health savings account. He lodged complaints with Junior Achievement’s accountants and executives, including Jennifer Burk, its president and chief investment officer. He contacted the U.S. Department of Labor but declined to file a written complaint. In October, George addressed the company’s board. That month he received checks for around $2,600 to compensate him for the missed deposits plus interest.

George had an employment agreement until June 30, 2010, but in late 2009, he discussed with Burk and others retiring in April 2010. On January 4, 2010, Burk told George not to come to work the next day. George claims Junior Achievement terminated his employment because he questioned executives about the missing money from his accounts.

The 7th Circuit’s opinion is here.

 

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