Pensions and Bankruptcy Claimants

The tug of war continues between pension plan participants and outside creditors. As a result, doing business with troubled municipalities may end up costing creditors time, money and headaches. Just a few days ago, Judge Christopher Klein with the United States Bankruptcy Court for the Eastern District of California ruled against Franklin Templeton Investments. By doing so, this asset manager will not be able to recoup the $32 million it sought from the City of Stockton as the municipality seeks to exit bankruptcy. Instead, as Reuters journalist Robin Respaut writes in "Holdout creditor in Stockton bankruptcy denied higher claim" (December 10, 2014) the city's plan would give Franklin "just over $4 million of the $36 million it said it is owed." This follows an October thumbs-up from the Court to reduce the payout to bond investors in order to maintain retirement and health care benefits and thereby (hopefully) prevent an exodus of badly needed city workers. 

A topic not actively discussed but critically important to ignore is that once-burnt lenders are unlikely to come knocking again. If they do, they will charge a higher cost of capital and demand tighter collateral safeguards to reflect the bigger risk associated with exposure to struggling borrowers. After all, lenders are accountable to their customers. As Bond Buyer's Keeley Webster describes, investors in Franklin California High Yield Municipal Fund and Franklin High Yield Tax-Free Income Fund will suffer as the result of a low recovery rate in the neighborhood of twelve percent for loans made to Stockton. 

As Attorney B. Summer Chandler discusses in "Is It 'Fair' to Discriminate in Favor of Pensioners in a chapter 9 Plan?" (American Bankruptcy Institute Journal, December 2014) putting pensioners ahead of other unsecured creditors may not seem right to some but could be supported by "limited case law assessing chapter 9 plans..." taking into account "the unique nature of a municipality, its relationship to its citizens (including pensioners and current employees) and the purposes of chapter 9..."

To reiterate, customer risk is real for organizations such as Franklin Templeton. Unless its higher costs can be passed along to customers, expect some lenders and suppliers to say "never mind" and look elsewhere for business. This would logically reduce the supply of capital and services and could mean higher costs for all municipalities, not just those seeking bankruptcy protection. As my co-authors and I discuss in "Muni Bonds, Pension Liabilities and Investment Due Diligence" by Dr. Susan Mangiero, Dr. Israel Shaked and Mr. Brad Orelowitz (American Bankruptcy Institute Journal, July 2014), the evolution of decision-making can reduce uncertainty. We add that "...legal, economic and political skirmishes associated with municipal bond distress now being played out are helping to set the stage for future clarity." We assert that future bond buyers may still lend to a municipality if they "are comfortable in their belief that large unfunded post-employment obligations can be compromised as part of a distressed-debt workout..." and that "fresh capital can be a lifeline for a municipality that has fallen on hard times, even if it comes with a higher service cost.'

The best outcome is that pension-plagued municipalities seeking to exit from bankruptcy get their financial house in order as quickly as possible. While retirement plan participants have received a reprieve in some situations such as what happened with Stockton, the overall funding crisis is likely to reverberate in ways that could lead to future skirmishes. Witness what is happening right now, courtesy of the U.S. Congress. According to "Pension Bill Seen as Model for Further Cuts" (December 14, 2014), Wall Street Journal reporter John D. McKinnon portends future diminutions in employee benefit payouts if such action is deemed to prevent the "failure of just a few" plans being able to destroy "the federal pension safety net" (i.e. the Pension Benefit Guaranty Corporation). While the focus of lawmakers right now is on corporate union plans, it is not much of a stretch to imagine certain reductions being allowed throughout the United States and in other countries, postured as protection for the "greater good."

Taxpayer Bailout of Underfunded Pension Plans

Over dinner last night with friends, my husband told a joke about Kim Kardashian and Paris Hilton (or whomever you want to designate as fact-challenged individuals). The hotel heiress asks "Which is closer to us - Florida or the moon?" The reality star replies - "Hello, can you see Florida from here?" Unfortunately, this type of silliness has reared its head often over the years with regard to the topic of promising too much and funding too little. The math just does not work. To the logical observer, this flight of fantasy was always destined to self-destruct. It was more a question as to how long the downward spiral would take for impacted U.S. and non-U.S. government plans.

On July 27, 2006, I wrote "Tea Party Redux: State Pensions in Turmoil." It was blatantly clear that trouble was heading our way. Since then, headlines about retirement plan gaps continue to dominate the news.

In what could be a bellwether situation, the State of Illinois wants to address a shortfall that is referred to as "the biggest in the U.S" and is fighting the court system to be empowered to do so. See "Illinois Fights Court Block of $111 Billion Deficit Fix" by Andrew Harris (Bloomberg, November 27, 2014). In "Why Illinois pension reform may be constitutional" (Crain's Chicago Business, December 6, 2014), Joe Cahill explains that "important state interests" may justify the limiting of pension contracts that are deemed constitutional and therefore inviolable. He references Felt v. Board of Trustees. Those who disagree that reform is legally possible suggest that taxpayer hikes and/or reduced overall municipal spending are inevitable.

Now it appears that U.S. lawmakers may have their sights set on private pension plans too. In "Congress could soon allow pension plans to cut benefits for current retirees" (December 4, 2014), Washington Post journalist Michael A. Fletcher describes a move that, if enacted, would see lower payouts for plan participants of multi-employer plans in distress. The alternative is to have the Pension Benefit Guaranty Corporation ("PBGC") take over any failed plans. As stated in "Solutions not Bailouts" (February 2013), Randy G. Defrehn and Joshua Shapiro write that benefits would be lowered anyhow in the event of a PBGC assumption of plans deemed as insolvent. In "The lame-duck Congress plots to undermine retiree pensions," Los Angeles Times reporter Michael Hiltzik urges readers to stay tuned as the December 11, 2014 vote on an omnibus spending bill may contain language that, if passed into law, would snip dollars from union retirement arrangements. He quotes advocates of defined benefit plans as pushing for careful deliberation instead of rushing ahead.

Expect lots of changes in 2015 and thereafter. The pension crisis (at least for some sponsors and their employees) is not going away anytime soon. In the meantime, smart cookies are invited to the negotiations table. The worst thing that could happen is to ignore reality. Leave that to Kim and Paris. 

Longevity Trends and Pension Costs

When it comes to estimating defined benefit ("DB") plan costs, it is critical to use inputs and assumptions that make sense. Longevity is one such important factor that demands attention. Getting good answers to questions about life span differences among age, income and health cohorts is necessary for decision-makers. The assessment of how to redesign a plan, transfer risk and/or modify investment strategy depends on knowing what variables determine the size of the liability.

Studies such as the one just released by the National Association of Pension Funds ("NAPF") and Club Vita (a Hymans Robertson Company) can be helpful to the extent that they shed light about how long participant groups are expected to live. In a November 27, 2014 joint announcement, its "unique" research is described as likely to result in companies having to report higher pension liabilities. Based on an assessment of data about 2.5 million pensioners and one million deaths, authors conclude that "the pace of longevity increases varies significantly within DB schemes and for different groups of DB pension scheme members." One inference is that the life span gap between men and women in the "hard pressed" economic category versus those who are "comfortable" is narrowing. A second finding is that a typical defined benefit plan liability is likely to rise by one percent.

As the researchers correctly point out, access to granular details about the sensitivity of the cost-demographic lever can be utilized by DB plan trustees when deciding if and how to restructure via a buy-out, liability-driven investing strategy or something else. Click to read "The NAPF Longevity Model" (November 2014).

ERISA Whistle Blowers

In the aftermath of the November 17, 2014 Strafford CLE webinar entitled ERISA Plan Investment Committee Governance, I asked several attorneys for their thoughts about whistle blower protection.

Attorney Stephen P. Wilkes, Of Counsel to The Wagner Law Group, took time out of a busy schedule to share his thoughts about a hypothetical scenario. He wrote the following:

Person X, a corporate officer, is a member of the Investment Committee for the corporate retirement plan ("Plan"). Person X determines that a specific course of action is in the best interest of the Plan (e.g. remove employer securities as an investment option or replace Bank Y with Bank Z as trustee). However, the Chief Financial Officer ("CFO") of this made-up company inappropriately steers the decision to one that serves the corporate interest and not the Plan interest (e.g. maintain employer securities as an investment option or continue to use Bank Y as trustee because it is providing corporate finance services to the company at below-market prices).What is Person X to do? He or she has a duty to serve the company and its shareholders, yet as an ERISA fiduciary, is there is a duty owed in this instance to the Plan and its participants? Person X complains to the U.S. Department of Labor ("DOL"). Five months later, Person X is terminated from employment by the CFO for "performance issues."

There is an inherent conflict of interest when corporate officers serve in an ERISA fiduciary capacity. The DOL and the U.S. Supreme Court have each determined that one can wear dual hats (sometimes an ERISA fiduciary, other times not an ERISA fiduciary),

In this hypothetical situation, Person X is clearly wearing the ERISA fiduciary hat when engaged in Plan Investment Committee work and owes the corresponding duty at that time to the Plan and its participants and beneficiaries.

The very purpose of the whistleblower statutes (such as ERISA Section 510 or Sarbanes-Oxley Section 1514A) is to root out problems and protect the reporting individual (the "whistleblower") from retaliation in this sort of scenario.The legal mechanism is in place to protect whistleblowers.There are some legal distinctions yet to be fully resolved about whether or not a particular retaliation is unlawful or not. They turn on whether an employee "has given information or has testified or is about to testify in any inquiry or proceeding." In other words, there are some open legal issues about whether unsolicited grievances are protected (as compared to whistle-blowing about ERISA violations during an active or ongoing investigation).

The question as to whether the presence of senior management who serve alongside mid-level or junior-level employees at the ERISA fiduciary table creates a "chilling" effect is a good one. Though the answer ultimately turns on the compliance culture of each company, potential problems can be mitigated well in advance with solid corporate governance and ERISA fiduciary training, as well as having appropriate policies and procedures in place with regard to risk management.

On behalf of the readers of Pension Risk Matters, thank you Attorney Wilkes.Your insights are much appreciated.

ERISA Plan Investment Committee Governance

In case you missed "ERISA Plan Investment Committee Governance: Avoiding Breach of Fiduciary Duty Claims" with Dr. Susan Mangiero (Fiduciary Leadership, LLC), Ms. Rhonda Prussack (Berkshire Hathaway Specialty Insurance) and Attorney Richard Siegel (Alston & Bird), click to download the November 17, 2014 presentation or visit the Strafford CLE website to obtain the audio recording.

Given the importance of the investment committee governance topic and emerging market trends in the area of outsourcing, my comments focused on committee structure, guiding documents, training and implications when third parties sign on as fiduciaries. Points I made during the webinar include, but are not limited to, the following:

  • The ERISA Advisory Counsel, in its 2014 Issue Statement about outsourcing employee benefit plan services, cites a desire to understand how vendor contracts address provisions such as termination rights, indemnification, liability caps and service level agreements.
  • An evaluation of the outsourcing business model is not surprising given a service provider push to serve as an Outsourced Chief Investment Officer or Fiduciary Risk Manager. (An Asset International publication refers to the OCIO movement as a fast-growing segment of investment consulting.)
  • Once an investment committee has been authorized by the sponsor's board of directors, a core set of qualifications and experience needs can be assembled. Plan counsel can play a vital role in explaining fiduciary obligations.
  • Beyond that core base, facts and circumstances such as plan design, company size, industry structure and investment strategy should be taken into account as part of determining requisite training and experience.
  • Regular meetings are encouraged with frequency being determined in part by what has to be done by the investment committee and related time sensitivity of completing a task(s).
  • Notwithstanding the voluntary nature of having an Investment Policy Statement ("IPS") in place, an ERISA plan investment committee should establish one nevertheless that makes sense for a particular plan. Some organizations have been questioned after creating an IPS but not following it.
  • Creating (and following) an appropriate Risk Management Policy can likewise be useful, especially for ERISA plans that utilize derivative instruments and/or allocate money to more complex products or strategies.
  • Training is another mission-critical area. (According to "DOL Investigators Quiz Plan Sponsors On Training of Fiduciary, Attorneys Say" by Bloomberg BNA contributor Joe Lustig, fiduciaries are being asked by regulators whether training programs exist.)
  • Continuing education is beneficial since regulations, market conditions and plan-related objectives and strategies can change over time.

Someone from the audience asked whether it made sense for an investment committee to consist of a senior corporate executive such as a Chief Financial Officer and her direct reports. The point is that each fiduciary is equal at the investment committee "table" but otherwise unequal. This can present a big problem if any or all of the investment committee members disagree with the Chief Financial Officer. Worse yet, a subordinate (in corporate organization terms) may be reluctant to whistle blow about an imprudent decision made by the CFO while wearing her hat as ERISA fiduciary. I will leave the question as to legal protection to attorneys. However, in doing some research, it turns out that U.S. federal pension law does address whistle blower protections. Interested persons can click to read "ERISA Has a Whistleblower Provision? Yep." by Seyfarth Shaw attorneys Ada Dolph and Robert Szyba (June 19, 2014).

There is a lot more to say on the topic of investment committee governance, notably because ERISA lawsuits that are adverse to a plan sponsor tend to include all investment committee members as defendants. An effective infrastructure and good governance policies and procedures can help to mitigate fiduciary personal and professional liability and position the investment committee to better serve participants.

Susan Mangiero of Fiduciary Leadership, LLC Earns the "Professional Plan Consultant" (PPC) Credential

Trumbull, CT (November 6, 2014) – Dr. Susan Mangiero is pleased to announce her designation by Financial Service Standards, a division of fi360, Inc. (Pittsburgh, PA) in the area of retirement plan consulting.  She is the recipient of this specialized designation known as the Professional Plan Consultant or PPC.

Recent regulatory changes to the qualified retirement plan industry have sparked an urgency to ensure that retirement plan service professionals have specialized training and resources to help sponsors meet their fiduciary obligations and a means of documenting that prudent practices are being followed in the management of an employer-sponsored plan.  Those professionals that help retirement plan fiduciaries and their counsel are seeking accreditation and certification to demonstrate a high level of knowledge and the ability to provide sponsors with the tools necessary to manage their plan effectively.

The Professional Plan Consultant™ designation was developed by Financial Service Standards with a goal of helping professionals that work with employer-sponsored retirement plans specialize in this increasingly regulated niche of the financial industry.  Program graduates must sit for either a two-day training class or complete the equivalent web-based training program, pass a comprehensive final exam, sign off on the FSS Code of Ethics, and commit to ongoing training in retirement plan management. 

Susan Mangiero is a Managing Director with Fiduciary Leadership, LLC. She is a CFA charterholder, certified Financial Risk Manager and Accredited Investment Fiduciary AnalystTM. Dr. Mangiero has been working within the investment management industry for over twenty years. She provides a variety of investment risk governance and valuation services to attorneys, regulators, asset managers, investment committees and other types of fiduciaries. Services include board training, business intelligence surveys, calculation of damages for dispute resolution purposes, expert witness testimony, investment best practices research, white papers, financial model reviews and procedural prudence assessments. She is the author of Risk Management for Pensions, Endowments and Foundations and the lead contributor to the award-winning blog, www.pensionriskmatters.com.

According to Dr. Mangiero, she is proud and excited to have received this distinguished designation. "It requires industry experience and reflects my dedication to raising the service standards in the retirement plan industry, whether for 401(k) plans, defined benefit ("pension") plans, Employee Stock Ownership Plans ("ESOP"s) or other types of employee benefit arrangements. This designation is an indicator that a professional has added to her knowledge and can access unique tools and resources that can help plan sponsors meet certain industry requirements."

Sharon Pivirotto, Founder & Managing Director of Financial Service Standards of Pittsburgh congratulates Dr. Mangiero on this achievement and "applauds her initiative to help customers plan, build and maintain a successful and compliant company-sponsored retirement plan. This kind of commitment and service approach ultimately means better retirements for many employees."

The 40lk Service Training Program, sponsored by Financial Service Standards, has been accepted for 12.5 continuing education credits by the Certified Financial Planner Board of Standards Inc. The PPC designation is listed on the FINRA website.

Fiduciary Leadership, LLC is an investment risk governance and forensic economic analysis consulting company. Clients include asset managers, transactional attorneys, litigation attorneys, regulators and institutional investors.

Love What You Do and Do What You Love

We are movie aficionados in our family and try to see a variety of celluloid offerings, as time permits. We recently had the pleasure of seeing an uplifting motion picture entitled St. Vincent. Bill Murray plays a grumpy man who, at first glance, seems unlikely to warm any hearts. Over time, however, the audience learns that he is a good guy, a war hero and a kind person. He befriends the little boy who moves in next door and, no surprise, inspires smiles all around. At the end of the film, as the credits roll, there is a scene where Bill Murray is enjoying a quiet moment in his modest backyard, singing along to Bob Dylan's "Shelter From The Storm." Maybe because the song is lyrical or people were curious about the scene, they stayed and listened.

Although Bob Dylan was a musician from an earlier generation, he remains an admired talent and is recognized for his vast body of work. According to an October 2014 Rolling Stone article, Dylan is so prolific that The Lyrics: Since 1962 includes nearly one thousand pages and weighs "approximately 13 and a half pounds." In his early 70's, he is still giving live concerts.

There is something magical about being excited about music, friends, work and play. Famed author Ray Bradbury who died a few years ago at age 91 was quoted as saying "Love what you do and do what you love."

I certainly enjoy the challenges of providing forensic economic analyses and investment risk governance consulting. Colleagues and attorneys I know (some of whom are clients) often say that they are proud to be making a difference. That purpose and excitement about time well spent applies to others I know who are far removed from law or business. One friend (now sadly deceased) used to find great pleasure in selling office supplies and being able to interact with her customers.

Though it did not generate box office mojo, "Hector and the Search for Happiness" made the point that the pursuit of happiness may be trumped by the happiness of pursuit. Inspired by a book with the same title and authored by Francois Lelord, a French psychiatrist, the film referenced the mind-brain link of living a life with joy. It turns out that anyone with access to a computer can now take "The Science of Happiness," courtesy of the University of California - Berkeley and professors from the Greater Good Science Center.

Whether you are heading towards retirement or solidly part of the workforce, keep Bobby McFerrin's words in mind. "Don't worry, be happy." It's a good way to live life.

Retail Investors and Derivatives Trading

During a catch-up conversation, a now-retired colleague told me how much money he was making by trading options. Based on several recent articles, it seems that he is not alone in looking to Wall Street instruments in hopes of an income boost or a way to hedge uncertainty. In "Retail Investors Flock to Derivatives for Income and Safety" (TheStreet.com, October 31, 2014), senior reporter Dan Freed describes a growing trend in trading options and futures, with growth rates that exceed the level of purchases and sales of stock. On November 3, 2014, the Options Clearing Corporation reported a 22.32 percent rise in total equity and index option volume in October 2014 from one year earlier, "the second highest monthly volume on record behind the August 2011 record volume of 554,842,463 contracts" or a year-to-date volume of 3,673,768,194 contracts.

Reuters journalist Chris Taylor describes the average options trader as 53 years of age, citing Options Industry Council statistics that put nearly thirty percent of those who trade options at between "the ages of 55 and 64." However, in "New baby boomer hobby: trading options" (July 9, 2013), even retirees with a high net worth are cautioned to educate themselves about the downside of leverage. Mary Savoie, Executive Director of the Options Education Program, talks about the free resources made available by the Options Industry Council.

Critics counter that formal training cannot replace experience and that retirement assets should be invested with a long-term goal in mind, especially for those individuals with a low net worth. What they may not realize is that numerous retirement plans are chockablock with exposure to derivatives in the form of investment funds that trade swaps, options and futures. In mid-September of this year, Bloomberg reporters Miles Weiss and Susanne Walker wrote that then PIMCO senior executive and co-founder of the Pacific Investment Management Company Bill Gross "sold most of the $48 billion of U.S. Treasuries held by his $221.6 billion Pimco Total Return Fund (PTTRX) in the second quarter, replacing them with about $45 billion of futures. In "SEC Preps Mutual Fund Rules," Wall Street Journal reporter Andrew Ackerman (September 7, 2014) cites a concern on the part of the U.S. Securities and Exchange Commission about the use of derivatives by certain mutual funds and could seek "to limit the use of derivatives in mutual funds sold to small investors, including both alternative funds and certain 'leveraged' exchange-traded funds, volatile investments that use derivatives to double or even triple the daily performances of the indexes they track..." 

Over the years, I have traded derivatives, valued derivatives, reviewed financial models, created hedges and stress tested deals for compliance purposes. Throughout that time, the global markets continue to grow, attesting to their popularity. Earlier this summer, the Bank for International Settlements measured the over-the-counter derivatives market as having expanded to outstanding contracts with a value of $710 trillion at yearend 2013, up from $633 trillion in a single year.

Whether singular derivative transactions are appropriate for any one individual plan participant depends on a number of factors. Suffice it to say, derivative instruments are here to stay. It would be incorrect to underestimate the ubiquitous nature of derivatives. Besides asset managers who use derivatives, there are plenty of structured products that layer in derivatives with traditional equity or fixed income securities.

Stay tuned for more from the regulators about the usage of derivatives and asset management. In the aftermath of the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act, rules about derivatives trading and clearing are changing the operational and technology landscape. Fund directors not already in the know are being urged to pay attention to the economic impact on fund activity when derivatives are used. Click here to download a good risk management checklist. It is part of a November 8, 2007 speech by Gene Gohlke, then Associate Director, Office of Compliance Inspection and Examinations, SEC. Entitled "If I Were a Director of a Fund Investing in Derivatives - Key Areas of Risk on Which I Would Focus," Attorney Gohlke addresses the panoply of due diligence considerations such as custody, pricing and valuation, legal, contractual, settlement, tax, performance calculations, disclosure, investor reporting and compliance. These are important knowledge areas for investors too.

Pension Risk Matters Cited As Newsletter That 401k Advisors Should Read

As I have stated many times, this blog was created more than seven years as a labor of love (excuse the pun). Objectives include the following: (a) encouraging conversations about the importance of investment risk governance for U.S. and non-U.S. retirement plans (b) sharing educational surveys and research papers and (c) describing and interpreting important trends in the industry. Our readership continues to grow and it is my pleasure to dedicate time to the care and feeding of PensionRiskMatters.com as the primary contributor.

Accolades about the website are appreciated, especially from individuals who themselves dedicate considerable time to the topics of fiduciary education and best practices. I am proud to learn that Ms. Sharon Pivirotto lists PensionRiskMatters.com as one of "12 Newsletters All 401k Advisors Should Read" (Linkedin.com, October 24, 2014), referring to our site as "a very robust blog with articles covering regulatory, risk, and practice management topics for pension professionals."

Thank you for the recognition Sharon. As co-founder of Financial Service Standards (now part of the fi360 family), your opinion counts.

Thanks too for the individuals who have generously provided time and energy since this pension blog launched in 2006. Readers tell us that they value the chance to read interviews with industry thought leaders and have access to various studies and insights about critical retirement industry topics.

To our readers, please accept our gratitude for your interest and helpful comments.

Pension De-Risking Gets Political

I have long maintained that retirement plan issues receive considerable attention whenever politicians enter the fray. Certainly that is the case with the U.S. debate about fiduciary standard rules among lawmakers, industry and regulators. Now it seems that de-risking is the next topic du jour for Congress.

According to "2 senators call for derisking rules" by Hazel Bradford (Pensions & Investments, October 23, 2014), U.S. Senate Finance Committee Chairman Ron Wyden (a Democrat from Oregon) and the Chairman of the Health, Education, Labor and Pensions Committee, Tom Harkin (a Democrat from Iowa) have asked government officials at various agencies to "consider developing guidance on procedures and the fiduciary duties of plan sponsors." The article describes their letter to the U.S. Department of Labor, the U.S. Department of Treasury, the Pension Benefit Guaranty Corporation ("PBGC") and the Consumer Financial Protection Bureau as emphasizing the involvement of insurance companies for lump-sum and risk transfer transactions.

Nick Thornton wrote in "Lawmakers urge clearer rules for de-risking" (Benefits Pro, October 23, 2014) that said letter cited concerns such as the following:

  • Loss of PBGC protection in the event of a plan takeover;
  • Risk of persons "self-directing their retirement savings over the course of their retirement";
  • Possible reduced rights for spouses when a lump sum settlement is involved; and/or
  • Loss of ERISA's protection.

There is nothing wrong with clarifying legal and economic rights but one worries that past may be prologue when it comes to imposing mandates. Too many times, overly simplistic regulation induces a perverse outcome. (Read "Unintended Consequences" by Rob Norton (Library of Economics and Liberty) for a discussion of this concept.) Given the often complex array of facts and circumstances for every ERISA plan and its sponsor, a "one size fits all" is ill-advised.

A silver lining is that national conversations can (hopefully) generate changes that encourage further saving for retirement. In "Combating a Flood of Early 401(k) Withdrawals" (New York Times, October 24, 2014), Ron Lieber paints a bleak picture. He points out that a recent announcement by the Internal Revenue Service that allows more money to be set aside as an official contribution will be of little consequence to non-savers. He describes a large number of workers who "pulled out $60 billion" of the $294 billion in employee contributions and employer matches that went into the accounts." Statistics show that about forty percent of persons in flux "took out part or all of the money in their workplace retirement plans when leaving a job in 2013."

Speaking of planning ahead, visit the Art of Saving website to learn more about an effort to make November 5 a U.S. National Savings Day. The Consumer Federation of America is promoting thrift as part of its America Saves National Savings Forum on May 20, 2015 in Washington, DC.

Get out the balloons for satisfied piggybanks.