Protecting Retirement Savings Should Be a Priority

Published on March 7, 2015 in the Pawtucket Times

Last month, President Obama used his presidential bully pulpit to publicly support a proposed U.S. Department of Labor (DOL) rule, endorsed by a coalition of aging, labor and consumer groups, that reportedly limits conflicts of interest, increases accountability, and strengthens protection for Americans receiving retirement investment advice.

At the February 23 press conference held at the Washington, D.C.-based AARP headquarters, attended by Obama, Save Our Retirement Coalition members and lawmakers, the President called for the issuing of the proposed rule, still awaiting Office of Management and Budget (OMB) review and final DOL action. The updating of DOL rules and requirements would require higher standards for financial advisors, requiring them to act solely in their client’s best interest when giving financial advice, said Obama.

The Save Our Retirement Coalition says that the final rule is “needed to help protect Americans’ hard earned retirement savings from advisers who recommend investments based on their own interest – such as those that pay generous commissions – not because they serve their clients’ best interest.”

Existing Rules Outdated

In his remarks at AARP, Obama called the rules governing retirement investments written over 40 years ago “outdated,” filled with “legal loopholes,” and just “fine print,” needing an overhaul. The existing rules governing retirement investments were written “at a time when most workers with a retirement plan had traditional pensions, and IRAs were brand new, and 401ks didn’t even exist,” the President explained.

At the event, Secretary of Labor Thomas E. Perez., claimed that his agency has substantially reached out to “a wide range of stakeholders,” to craft the proposed rule that was sent to OMB. “The input we have received to date has been invaluable, but we’re not even close to being done. We have a lot more listening to do, and once the Notice of Proposed Rule Making is published in the coming months, I look forward to hearing from as many stakeholders as I can. We’re going to get this right, because the strength of the middle class depends on a secure retirement,” he says.

“We know the people we represent have worked hard to save for retirement, and we believe that they deserve to have financial advisers who work just as hard to protect what they’ve earned,” said AARP CEO Jo Ann Jenkins, in her remarks. AARP is a member of the Save Our Retirement Coalition.

“AARP, a major consumer advocate, has been fought for this consumer regulation for over five years to ensure that Americans of all ages get the best financial advice when planning for their retirement,” says Jenkins. “Recently AARP also found that 9 out of 10 employers who sponsor retirement savings plans support holding advice to such a ‘best interest’ standard,” she adds. .

“In today’s world, it’s hard enough to save for retirement and achieve your financial goals” added Jenkins. “We don’t need to make it more difficult by allowing some on Wall Street to take advantage of hard-working Americans. Bad financial advice is just wrong,” she says.

According to Save Our Retirement Coalition, “the need for the proposed rule was made starkly apparent in a White House report released showing that conflicts of interest are costing middle class families and billions of dollars annually. The 30 page report, released last month, details the current regulatory environment for financial planners, providing evidence on the negative financial impact of conflicted professional investment advice draining older American’s retirement saving accounts.

The White House report, issued by Council of Economic Advisors, cited evidence pulled from the literature, showing that “conflicted advice reduces investment returns by roughly 1 percentage point for savers receiving that advice” The report also found that “a retiree who receives conflicted advice when rolling over a 401 (k) balance to an IRA at retirement will lose an estimated 12 percent of the value of his or her savings if drawn down over 30 years. For those receiving conflicted advice “takes withdrawals at the rate possible absent conflicted advice, his or her savings would run out more than 5 years earlier.”

Holding Wall Street Accountable

“Many investment professionals do what’s right,” said AARP Rhode Island State Director Kathleen Connell. ”But loopholes in the law are allowing some on Wall Street to take advantage of hard-working Americans, recommending investments with higher fees, riskier investments, and lower returns to make even higher profits for themselves. Last year alone, hidden fees, unfair risk and bad investment advice robbed Americans of as much as $17 billion,” she states.

“AARP agrees that financial professionals of all types serve a valuable role in building the wealth and security of the investing public,” added Connell. “We simply want to achieve some consistency in the standards across the industry. Here is Rhode Island, many retirees are very concerned about their investment savings and they deserve protection. Our position is that retirement accounts managed by a broker should receive the same protections as regular investment accounts held with an advisor,” she says.

“Rhode Islanders have who have worked hard for their money and deserve a new standard that holds Wall Street genuinely accountable for helping them choose the best investments for themselves, their family and their future,” she adds.

Security Trade Group Concern

The Securities Industry and Financial Markets Association (SIFMA), a trade group representing securities firms, banks and asset management companies, is waiting to see the details of the proposed rule. SIFMA CEO Kenneth E. Bentsen, Jr., stated: “While we cannot comment on a proposal we have not yet seen, we have ongoing concerns that the DOL regulation could adversely affect retirement savers, particularly middle class workers. The new regulation could limit investor choice, cause inconsistencies as different regulators would apply different standards to the same regulatory accounts, prohibit guidance, and raise the costs of savings for retirement.”

But, both Obama and the Save Our Retirement Coalition strongly disagree with SIFMA’s assessment of the potential impact of DOL’s proposed rule, which has not yet been issued and is ultimately subject to change after the public comment period.

A large majority of financial planners put their clients first when giving them investment advice. But, as you know a few bad apples can truly spoil the barrel. If trade groups representing financial planners fail to act to rein in financial planners who give conflicted advice to pad their pockets, than federal regulations can quickly do that job by applying “simple, commonsense standards.”

It makes practical and political sense to me.

Here is a linked to President Obama’s comments at the AARP Press Conference: http://www.whitehouse.gov/photos-and-video/video/2015/02/23/president-obama-speaks-aarp.

Herb Weiss, LRI ’12 is a Pawtucket-based writer who covers aging, health care and medical issues. He can be reached at hweissri@aol.com . Or call 401/ 742-5372.

President’s Budget Addresses Issues of Interest to Seniors

Published in Pawtucket Times on February 27, 2015
President Obama released his 141 page ‘policy and wish list” when he unveiled his politically ambitious FY 2016 budget on Feb 2, not having to worry about running for president in the upcoming 2016 presidential election cycle.

Yes, even inside the Washington Beltway a picture is truly worth a thousand words. Gone is the budget’s plain blue cover replaced by a black and white photo of the Tappan Zee Bridge in New York, an image that projects one of the President’s spending priorities of rebuilding the nation’s infrastructure to create jobs and improve the transportation system.

The $4 trillion presidential budget, a political campaign document outlaying his policies and priorities, would cancel automatic sequestration cuts to domestic and military programs over a 10 year period. According to the New York Times, Obama’s budget proposal would add $6 trillion to the national debt, and the single-year deficit would rise to $687 billion by 2025.

Obama’s FY 2016 budget puts more funding into education, rebuilding the nation’s infrastructure, increased defense spending, along with providing tax relief for America’s middle class while increasing the taxes for corporate America and the wealthy. Political insiders say that Obama’s budget, one that gives to the middle class and assesses higher taxes from corporate America and the wealthy, sets the issues to be surely debated in the upcoming presidential election. .

A Look at Aging Priorities

On her Feb. 3 blog post, Nora Super, executive director of the upcoming White House Conference on Aging, details how the recently released budget proposal will “ensure that older Americans enjoy not only longer but healthier lives.”

As to retirement security, Super notes that the Obama Administration strongly opposes any legislative measures that would privatize the nation’s Social Security program, or slash benefits for future generations or reduce basic benefits to current beneficiaries. Super says that half the nation’s workforce, that’s about 78 million, does not have a retirement savings plan at work. “Fewer than 10 percent of those without plans at work contribute to a plan of their own. The President’s FY 2016 Budget expands retirement opportunities for all Americans to help families save and give them better choices to reach a secure retirement,” she says.

According to Super, Obama’s Budget proposal supports healthy aging by strengthening the Medicare program by “aligning payments with the costs of providing care, along with encouraging health care providers to deliver better care and better outcomes for their patients, and improving access to care for beneficiaries.”

To put the brakes to rising prescription drug costs, Super notes that the President’s Budget proposes to close the Medicare Part D donut hole for brand drugs by 2017, rather than 2020, by increasing discounts from the pharmaceutical industry. The Budget proposal also gives the Secretary of Health and Human Services new authority to negotiate with drug manufacturers on prices for high cost drugs and biologics covered under the Part D program.

Linking nutrition to healthy aging, Super says that Obama’s Budget provides “over $874 million for Nutrition Services programs, a $60 million increase over the 2015 enacted level, allowing States to provide 208 million meals to over 2 million older Americans nation-wide, helping to halt the decline in service levels for the first time since 2010.” Also, Obama’s budget ratchets up funding for supportive housing for very low-income elderly households, including frail elderly, to give these individuals access to human services, she adds. .

Protecting older persons from elder abuse, neglect and financial exploitation, Super blogs that the President’s budget proposal includes $25 million in discretionary resources for Elder Justice Act programs authorized under the Affordable Care Act. “Funding will “improve detection and reporting of elder abuse; grants to States to pilot a new reporting system; and funding to support a coordinated Federal research portfolio to better understand and prevent the abuse and exploitation of vulnerable adults,” she says.

Here’s Super’s take on the Obama budgetary blueprint: “Taken together, these and other initiatives in the Budget will help to change the aging landscape in America to reflect new realities and new opportunities for older Americans, and they will support the dignity, independence, and quality of life of older Americans at a time when we’re seeing a huge surge in the number of older adults.”

In a released statement, AARP Executive Vice President Nancy LeaMond gives thumbs to the president’s efforts to “lower the cost of prescription drugs, promote better care, reward improved outcomes and make health care programs more efficient and less wasteful.” She also expresses her nonprofit group’s support for the President’s budgetary priorities to “create opportunities for the middle class” and his goal “to make saving for retirement easier.”

But, LeaMond expresses concerns that higher premiums, deductibles and copays might shift costs to older Americans. “As the federal deficit continues shrinking, we must find responsible solutions for strengthening critical programs and improving the retirement and overall economic security of current and future generations. We must also look for savings throughout the entire health care system, as the rising cost of health care threatens people of all ages,” she says.

In his statement, President/CEO Max Richtman, of the Washington, DC-based National Committee to Preserve Social Security and Medicare, agrees with LeaMond’s concerns of higher premiums, deductible’s and co pays, too. “While some tout increasing means testing in Medicare as a way to insure ‘rich’ seniors pay their share, the truth is, the middle-class will take this hit as well,” he predicts.

Political pundits say that Obama’s 2016 budget was dead-on arrival at Capitol Hill the day it was released at the beginning of February. In the shadow of the upcoming 50th Anniversary of Medicare, Medicaid, and the Older Americans Act, as well as the 80th Anniversary of Social Security, GOP leadership in both chambers of Congress must work with the Democratic President to hammer out a bipartisan compromise. Putting budgetary proposals that strengthens the nation’s programs and services for older Americans on the chopping block for purely political reasons is not acceptable, especially to a nation that opposes political gridlock.

Herb Weiss, LRI ’12, is a Pawtucket-based writer covering aging, health care and medical issues. He can be reached at hweissri@aol.com.

Leonard Hits High Notes

Published February 27, 2015 in Senior Digest

Before even cutting his first record, little did Pawtucket’s George Leonard realize that he would help set legal precedents for student dress codes as well as ultimately make it into the rock ‘n’ roll history books and now, in 2015, into the Rhode Island Music Hall of Fame (RIMHOF).

When Leonard’s family relocated to nearby Attleboro in 1964, the young high school student was tossed out on the first day of school for having a “Beatle-length” haircut. Already an established professional musician, Leonard filed a freedom of expression lawsuit against the School Department, which dragged on through several appeals and wound up in the Massachusetts Supreme Court. Although the court finally sided with the School Department, it was too late.

“This was a landmark case. Students all over the country, following George’s example, began demanding their right to freedom of expression as guaranteed by the U.S. Constitution. Long hair became the order of the day,” said Rick Bellaire, RIMHOF vice chair and archive director.

The teenager deftly capitalized on the intense interest generated by the internationally publicized lawsuit, which brought his band, Georgie Porgie & The Cry Babies, onto the thriving New York City discotheque scene of the mid-1960s.

The popularity of the band led to two national releases for Jubilee Records. After the Cry Babies ran its course, Leonard composed and produced the controversial rock opera, “Bozo.” He later, under his alter-ego, “Commander Video,” became a cable TV pioneer on the blossoming performance art scene in New York City in the 1970s.

Although the 67-year-old musician resides in Bristol, he still strongly feels his connections to Pawtucket. “I only perform for my friends these days,” says Leonard, admitting that he enjoys playing jazz much more than rock ‘n’ roll and blues.

Looking back, Leonard says that passion never pushed him into the music business. Practically speaking, “It was always easy for me to play music and I enjoyed writing songs,” he said.

According to Bellaire, Leonard will be inducted into the RIMHOF with The Schemers/Raindogs, Brenda Bennett, Nelson Eddy, George Masso, George Wein, Duke Belaire, Paco Zimmer, The Others and The Ascots (recognizing the great Rhode Island garage bands of the ‘60s along with Leonard), Bob Petteruti, Marty Ballou and Marty Richards (in the new “MVP sideman award” category).

“The Music Hall of Fame initiative,” says Bellaire, “provides a great opportunity to not only acknowledge Rhode Island’s musical greats and celebrate their achievements, but to finally have an organization whose primary goal is to promote and preserve Rhode Island’s rich musical heritage in all its forms. With actual exhibit space, coupled with our online archive, we have in place the tools to curate and showcase the best of Rhode Island’s musical artistry.”

This year, Bellaire said, there will be two induction ceremonies, and 11 more displays will be unveiled to celebrate inductees. Eventually, the museum will have more than 100 displays as well as memorabilia and interactive components.

The induction of jazz musicians will take place on April 20 at 7 p.m. at Bovi’s Tavern, 287 Taunton Ave., East Providence, before the weekly performance by the John Allmark Jazz Orchestra. George Masso, Bob Petteruti and Duke Belaire, the founder of the Bovi’s big band, will be honored.

On April 26, there will be an induction ceremony and concert at The MET and Hall of Fame within Hope Artiste Village, 999 Main St., Pawtucket. An afternoon event will include the unveiling of the inductee exhibits as well as performances by The Schemers, Raindogs, Brenda Bennett, The Ascots, TheOthers and an all-star jam session led by two of this year’s MVP sideman award winners — Ballou and Richards.

The 2 p.m. unveiling is free, but a ticket will be required for entrance to the 3 p.m. concert in the MET. Tickets are $20 in advance and $25 at the door and can be purchased atwww.RhodeIslandMusicHallofFame.com

Robert Billington, chair of the RIMHOF, said, “This year’s class of inductees is especially amazing due to the variety of music styles and musical periods that we are recognizing. The thousand Saturday nights that these musicians spent on the road throughout their careers will be recognized this April as their colleagues throughout Rhode Island stand to applaud their successes.

“Our induction ceremony … has become the place for a ‘who’s who in Rhode Island music,” he said. “The Rhode Island Music Hall of Fame Induction ceremony and concert is the place to be and be seen at as we continue to showcase the history of Rhode Island’s musical heroes.”

Bellaire noted, “In past years, we’ve been delighted to induct many senior members of Rhode Island’s music community. For instance, last year The Mark II – Wayne Cogswell and Ray Peterson who are both in their 80s — were on hand to accept their awards and perform, and Rhode Island Philharmonic founder Francis Madeira at 97 came all the way down from Maine to accept his award during a philharmonic performance at The Vets.

“This year, we will be honored to have some of the most senior inductees with us,” he continued, “… all of whom are still active participants on the music scene, including drummer/band leader Duke Belaire (83), bassist/educator Bob Petteruti (85), trombonist/educator George Masso (88), and Newport Jazz and Folk festival founder George Wein (89).”

Herb Weiss is a Pawtucket-based writer. Contact him at hweissri@aol.com.