Tag Archives for Jr.

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Existing Rules Outdated

In his remarks at AARP, Obama called the rules governing retirement investments written over 40 years ago “outdated,” filled with “legal loopholes,” and just “fine print,” needing an overhaul.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.

Collette’s Employees Key to Soaring Profits

Published in Pawtucket Times, July 17, 2014

During one of the most devastating economic downturns since the Great Depression, companies throughout the nation put hiring decisions on hold, even slashing employee benefits and compensation. But, savvy CEOs create employee benefits and compensation, to retain their good workers and grow their businesses. Yes, they know that employees play a key role in positively impacting their bottom-line, even ensuring their organizations financial survival in really bad times.

Just listening to talk radio and you will continually hear how the high cost of doing business in the Ocean State, fueled by taxes and regulation, drives businesses out-of-state in droves. But, business is booming at Pawtucket-based Collette and its CEO and President Dan Sullivan, Jr., can easily tell you why – his 544 employees.

With Rhode Island and Nevada tied for having the highest unemployment rate in the nation, Collette, one of the oldest tour operators in the nation, is looking to fill jobs. “We are doing everything we can to improve the employment statistics in Rhode Island,” said Sullivan. “Right now, Collette is focused on growth and acquiring great talent right in our own backyard and increasing job opportunities.”

Back in 1918, when founder Jack Collette established the travel company, World War I had just ended. The Boston Red Sox had won the World Series and porterhouse steak was 54 cents pre-pound. The company’s first tour left Boston for Florida, taking their customers on a three-week adventure for just $61.50. Today, Collette offers more than 150 tours to destinations across seven continents.

Company Values Employee Longevity

According to Sullivan, Collette, now a third generation family owned company, has been honored seven times as the Best Places to Work in Rhode Island. “It’s not just a job; the people love what they do,” observes Sullivan. Whenever Collette hires someone, the company wants the employee to be there for a long time. “We value longevity. We take care of our employees like family,” touts Sullivan.

Although Collette annually offers a performance-based incentive based on the company’s overall performance to its workforce, just two weeks ago every full-time employee who was hired before a designated date received an additional whopping $1,000 bonus at a company celebration held at the Rhode Island Convention Center.
Not bad when Rhode Island companies are slashing benefits and employee compensation.

At this celebration, most of Collette’s 544 employees including others joining them from the company’s offices near Toronto, Ontario, Canada, Vancouver, British Columbia, Canada and London, England, came to get a big thank you from Dan Sullivan Jr., along with his family and other top corporate executives. At a random drawing held that evening, 10 lucky full-time employees each received a $10,000 prize.

“This is to celebrate the success the team had this year,” says Sullivan. “In 2013, the company experienced a second consecutive year of record-breaking revenue and double-digit growth. With a 95-year track record, this is a major accomplishment. It’s our heartfelt ‘thank you’ to every employee for all they do to drive the company forward.”

The tradition of incentivizing Collette’s employees based on the performance of the company dates back several decades, notes Sullivan, who says that he wants all of Collette’s employees to “act as if they own the business and to reward them based on the performance of the company.”

Sullivan pointed out that the $1,000, which was on top of the company’s annual performance base incentive, was a result (77 percent of the employees received it) of one of the most profitable years in its long history. Collette is currently up over 37% in advanced reservations for 2014, too.

According to Sullivan, 82-year old Betty Sullivan, sister of the late Dan Sullivan, former President and CEO of Collette, was honored for her 50 years of service to the company. In recognizing her years of service, Collette gave her a new car.

To improve the health and quality of its employees’ lives, which in turn will enhance their productivity and competitiveness, last July Collette also built a 4,620 square foot Wellness Center that offers two levels of exercise areas and amenities for use by its employees and their families. It also includes one group exercise room, full facilities for men and women (locker room with showers, bathroom, etc.), towel service and more.

Life Long Learning

“Part of our long-term strategy is to rely on learning and critical skills development for growth and performance [of its employees],” said John Galvin, Chief Financial Officer for Collette. “Our goal is to develop and maintain a culture of learning in the organization – this is from the top down. Even the Executives are required to pursue continued learning. We want our entire team committed to continuous learning because this will make all of us more successful in the long run.”

Galvin says, “We offer classroom training for our in-house employees as well as newly hired members of the sales team. In 2013, we provided over 11,000 combined hours of training. Training will be made even more accessible to our outside offices with the use of our new video conferencing software.”

Tuition assistance is available to full-time employees who have worked here for six months, adds Galvin, noting that courses, up to two courses per semester, must be taken through an accredited program that’s job related. He notes that all courses have to be approved by an employee’s supervisor or manager and also by Human Resources Department. Once a grade is verified the employee’s tuition reimbursement will be processed.

Currently, there are 14 Collette employees enrolled in school for advanced degrees, and 215 employees are participating in multiple online training programs through the company’s innovative Learning Management System. In 2013 alone, Galvin states, “14 of our employees completed the Bryant Certificate program and four others completed degree programs earning a master’s, bachelor’s degree, and two earned associate’s degrees.”

As an employee perk, Collette even offers discounted tours to employees and FAM, or “Familiarization,” time off,” adds Jeni Wilson, Collette’s Vice President of Human Resources. “It gives employees a chance to become familiar with the products Collette sells without them having to tap into vacation time, and it is certainly a nice perk for employees and their families,” she notes.

Giving Back to Your Community

A sense of community even drives its charitable endeavors, says Sullivan, who notes that since 1997, his company has given more than $7 million to local and worldwide projects. Through employee-led initiatives, 20,000 children have received enhanced education; balanced nutrition; and clean water.

Sullivan says that Collette employees have the opportunity to designate four work hours each month to volunteer, too. In 2013, the Collette employee volunteers gave 2,263 hours to its communities.

“I feel like I get so much joy out of life that it is only fitting for me to try and give back,” said Chris Cahill, Collette’s Applications Developer. More specifically, the company allows its employees to travel worldwide and experience new cultures and Collette’s volunteer program gives them an opportunity to “give back to the communities they visit. An 11 year Collette employee, Cahill volunteers at Pawtucket Proud Day, the Rhode Island Food Bank and Tourism Cares event.

Collette has received kudos for its spirit of volunteerism. The company recently won a World Travel Market Global Award in recognition of its global philanthropic work over the past 12 months. Locally, Sullivan noted that his company was one of the local companies honored with The Ernie Marot Humanitarian Award Dinner by the Pawtucket Soup Kitchen. The award honored some of the kitchen’s most committed supporters.

Employees Are Assets

In Rhode Island or across the nation, successful companies view their employees and customers as their most valuable assets, says Edward M. Mazze former Dean of the College of Business Administration (from 1998 to 2006) at the University of Rhode Island. “To remain in business you must have the type of employee who is going to be loyal to your company and at the same time be customer-oriented,” he says.

Compensation and Benefit programs, like Collette, offers, will allow you to both motivate and compensate the best people, keeping them from going over to your competitor, says Mazze.

But it just makes good business sense to retain your employees rather then starting a job search to hire employees to fill vacant positions. “Giving a person a thousand dollar bonus is much cheaper than having to go into the market and fill the position,” adds Mazze.

Collette, like many over savvy companies, puts its dollars in its employees’ pockets, even supporting a myriad of worthy nonprofit causes both locally and globally. Collette is a perfect case study for other CEOs to look at – being penny-wise and pound foolish can be hazardous to your company’s bottom-line. Recognizing the importance of your employees’ role in meeting your business objectives will come back a thousand fold. Just ask Dan Sullivan, Jr.

For more information about Collette, visit http://www.gocollette.com.

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

Susan Sweet Takes the Reins of AARP’s Community Educational Initiative

Published in Pawtucket Times, July 11, 2013 

            Accepting the challenge offered by organizers of Rhode Island AARP’s “You’ve Earned a Say”, veteran advocate and organizer, Susan L. Sweet, has come out of semi-retirement, stepping to the plate to coordinate a series of “community conversations”  to continue efforts of promoting dialogue throughout the OceanState on the future of Social Security and Medicare.

             After years of paying into Medicare and Social Security, AARP, a Washington, D.C.-based group representing 40 million Americans, believes that age 50 plus aging baby boomers and older persons deserve a voice in the Inside the Beltway debates that impacts their future retirement years.  “You’ve Earned a Say” is a AARP-led national conversation committed to providing people with critical information about the domestic policy proposals being debated in Congress — simply put without the political jargon and spin.

             Regional events to be held in Warwick, Pawtucket and elsewhere – free and open to all — will be scheduled throughout the summer into the fall as Congress and  President Barack Obama begin to weigh in on policy changes for these critical domestic programs.

             “Susan has a remarkable knack for encouraging people to become actively engaged in matters that deserve public attention and involvement,” said AARP State Director Kathleen Connell. “We are fortunate that she has agreed to take this on. She will bring great energy to AARP’s ‘You’ve Earned a Say’ outreach and engagement efforts. The fate of Social Security and Medicare is important to all Rhode Islanders and we hope many will take part in our forums. Working with our staff and other AARP volunteers, Susan will be a tremendous asset. She is a force of nature.”   After seeing her in action for over 18 years this columnist agrees.

             A veteran of the 1960s civil rights movement and the War on Poverty, Sweet joined the state Department of Community Affairs (DCA) in 1972, where she founded and led numerous Rhode Island Division of Women’s programs.  She worked with the General Assembly to secure the first state funding for Domestic Violence Shelters.  While at the DCA, she also wrote a grant, funded by federal dollars, to establish community health centers throughout the state.

             In the late ‘80s and ‘90s, Sweet was Associate Director of the R. I. Department of Elderly Affairs (DEA), creating and developing a number of award winning programs, including the RI Pharmaceutical Assistance to the Elderly Program, popularly known as RIPAE.  She initiated a first in the nation statewide Elder Housing Security program and various legislative and programmatic initiatives to assist elders in the state.

             Sweet, a Rumford resident, earned the monikor as the mother of RIPAE by initiating, planning, organizing, managing and finally directing the state program that would ultimately assist 32,000 Rhode Island  limited income seniors with state co-payment assistance for prescription drugs. After leaving the DEA, three attempts were made by sitting governors (both Independent and Republican) to eliminate the program and the advocate led all three successful efforts to restore RIPAE funding in the state budget.

             After retiring as DEA’s Associate Director in 2000, Sweet has been a consultant and lobbyist on Smith Hill for nonprofit agencies and an advocate for vulnerable populations and issues such as immigrants, domestic violence, homeless and seniors. Her clients have included the Senior Centers Directors Association, the Alliance for Better Long Term Care, International Institute, the Coalition Against Domestic Violence and others.

             On a personal note, Sweet, 72, cares for five adopted cats, all abandoned or abused, putters in her large backyard garden, spends time with two children and two grandchildren.  Being an expert on Roman history she reads many tomes on that era, and on world archeology and history.

Social Security on the Chopping Block

               Democratic President Obama and a Democrat-controlled Senate and a GOP House of Representatives are trying to reach a budget deal in the coming months. President Obama has proposed a change that would slash $127 billion from Social Security benefits over the next ten years, hurting many older beneficiaries who are already living on very tight budgets stretched far to thin by costly prescriptions, rising utilities, and increased health care costs. AARP and other aging groups are pushing hard against these cuts, mobilizing their troops to oppose. 

             Social Security is a self-financed program, not a piggy bank for deficit reduction, noting that aging baby boomers and seniors have paid into this pension program their entire working lives.  According to AARP polls, older Americans expect their elected representatives in Washington to fiscally secure Social Security for future generations and keep the promise Congress made 78 years ago: that this retirement program would provide a financial safety network in their later years.

             According to Sweet, the proposed chained CPI is a flawed policy that will hit Social Security beneficiaries in their pocketbook. Each year the Social Security Administration (SSA) makes the determination, based on market prices, whether to adjust the Social Security payment to beneficiaries and, if so, by how much.  The chained CPI is a formula that assumes that people will simply buy cheaper products.  “But that is not the case for seniors, whose greatest expenses are health care, utilities and other costs that can’t often be replaced,” So, the chained CPI is just a term that means that the average senior will lose more than $2,000 in the next 10 years and even more after that.  It also means that people reaching retirement age and/or planning for retirement will have even more of a reduction.

             Furthermore, Sweet finds it extremely disappointing that a Democrat President would offer, as an opening gambit in the budget process, a reduction in Social Security benefits by using a new and inappropriate method for computing Cost Of Living Adjustments (COLAs).  In fact, Social Security, a program that pays for itself and has never run a deficit, should not be used to offset deficits in other programs. We should be talking about how to strengthen the program, not reducing it, she states.

 State Pension Changes Hits Retirees, Too

             But, with Social Security COLA cuts looming if Congress takes legislative action to endorse chained CPIs, aging baby boomers in the OceanState who will shortly retire or those already receiving their municipal or state pension checks will see less retirement income because of actions of the Rhode Island General Assembly.

                 “Any additional loss of retirement income is certainly a concern for public employees who, as a result of the 2011 slashes in their promised retirement income,” said AARP’s Connell. “Lawmakers need to understand that there are earned benefits. People plan their retirement based on what they are told they can count on – whether it is a public or private pension, or Social Security. As we have said for the past two years, Congress and the President should not address the deficit by pursuing harmful cuts to Social Security and Medicare.” 

             Sweet agrees stating that “Rhode Island was at the very front of the attack on older folks with an extraordinary coup which stripped public service retirees and workers of hard earned compensation for their work. They called it “pension reform”, but that is not what it was.  Everyone knows that it is not fair to change the rules in the middle of the game and certainly not after the game is over.  But that is what is happening around the country, in private and public employment.”

             Social Security and other pensions are not “entitlement programs” but more like insurance programs that you pay into with the promise and expectation of a certain coverage, notes Sweet. The aging advocate asks: “Should the insurance company be allowed to change the benefits upon payout? Should government (state or federal) cut benefits to retirees absent the most pressing of circumstances?”

             But, certainly in the case of Social Security, there is no emergency, but rather a timely need to insure that the program can continue to fulfill its mission, she says.

             Robert A. Walsh, Jr., Executive Director of NEA, National Education Association Rhode Island, representing 12,000 members in education and in city and state government, refers to the recalculation of COLAs by using chained CPIs as “voodoo economics.”  While supporters of this recalculation policy note it reins in Social Security costs, they should at least be honest about the fact that it personally hits the retiree financially, right in their checks, he says.  “If you’re going to cut people’s COLAs, just be honest about it,” he says.

             Many of Walsh’s union members only receive their city or state pension as they are not eligible for Social Security benefits. People retired with certain expectations [as to what retirement income they had] and to make pension changes after they retire is patently unfair, says Walsh, noting they had no opportunity to plan for the decreased income.

             Throughout the nation there is a growing movement of aging baby boomers and seniors, fueled by AARP’s educational efforts, who tell Congress to simply  “Leave Social Security Alone”.  Strengthen it for future generations, they say.

             Sweet and millions of others tell Washington politicians that “Social Security is not a cookie jar to fund other programs.”   Sweet says you can make this known to Rhode Island’s Congressional Delegation, Senators Reed and Whitehouse, Representatives Cicciline and Langevin, by attending the upcoming “community conversations.”  Support their position opposing the change in the COLA and urge them to support Social Security by leaving it out of any budget deal, she urges. 

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