Month: April 2024

News You Should Know: Majority of Workers Say Benefits Influence Job Choices

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Employers Risk Facing Turnover Without Comprehensive Benefits Offerings | PLANSPONSOR

In a new survey, workers overwhelmingly said benefits are a key factor in determining where to work, with 70% of respondents saying they would be willing to switch jobs to gain better benefits. The survey found younger workers value education and training benefits, while 87% of older workers said retirement benefits are a top priority.

DOL Releases Final fiduciary Rule | ThinkAdvisor

The U.S. Department of Labor has released the final version of a new rule that clarifies who is considered a fiduciary when providing investment advice. Experts say the new rule adds protections for consumers, who can be more confident they’re receiving good financial advice that’s in their best interests.

Colorado Wants to Lower Prescription Costs. Why Are Patients Opposed? | The Colorado Sun

Three years ago, Colorado created the Prescription Drug Affordability Board to review drug prices and potentially place limits on how much manufacturers can charge for medications. Drugmakers have pushed back against the board’s authority, and some patient advocates have now joined the opposition out of fear that price caps could lead to manufacturers pulling their life-saving drugs from Colorado pharmacies.

What Do Women Think About Retirement? | National Institute on Retirement Security

There’s long been a gender gap in retirement, with women generally having less money saved due to lower wages and other factors. According to a recent survey of working women, more than 75% of women think retirement is only getting harder, and 82% say every worker should have access to a pension for retirement security.

News You Should Know is a digest of news from publications around the nation about finance, investing, and retirement.

News You Should Know: Insurers Warn Medicare Advantage Rate Cut Could Lead to Higher Premiums

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Federal Government Finalizes Modest Cut to 2025 Medicare Advantage Rates | Healthcare Dive

The Centers for Medicare and Medicaid Services (CMS) finalized the rates it will pay to insurers who run Medicare Advantage plans in 2025, and it’s a slight decrease from the current base rate. The federal government insists insurers will still come out ahead under the new rates, but insurance companies say lower rates could force them to cut benefits and raise premiums.

Vermont Plans to Partner with Colorado on State Auto-IRA Retirement Plan | PLANSPONSOR

Vermont is the latest state to team up with Colorado to administer its new state-run automatic individual retirement account (IRA) program for people who don’t have access to a retirement plan at work. Colorado’s plan, known as SecureSavings, has also helped auto-IRA programs in Maine and Delaware get off the ground.

Americans Think They Need Almost $1.5 Million to Retire. Experts Say to Focus on Another Number Instead | CNBC

For workers who rely on defined contribution accounts like 401(k)s for retirement, knowing how much to save can be a challenge. According to a recent survey, people think they’ll need about $1.46 million to retire comfortably. But experts say workers should be more focused on saving for their individual needs and goals rather than any particular dollar amount.

Writing a Will is Becoming Less Popular. Why Americans are Opting Out | USA Today

At the height of the COVID-19 pandemic, people saw the need to have a will on file, and estate planners saw a spike in people needing their services. Since then, the percentage of Americans adult who say they have a will had been steadily increasing. The most recent survey, conducted at the end of 2023, showed a reversal in that trend and marked the first decrease since 2020.

News You Should Know is a digest of news from publications around the nation about finance, investing, and retirement.

Lawmakers Pass Bill to Refresh Study on Value of PERA’s Defined Benefit Plan

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The Colorado Legislature this month approved a bill that directs the Office of the State Auditor to commission an updated study comparing the value of PERA’s hybrid defined benefit (DB) plan to other plan designs.

House Bill 1427 calls for the State Auditor, in cooperation with PERA, to enlist an independent actuarial firm experienced with public pensions to conduct a comprehensive study comparing the cost and effectiveness of the PERA DB Plan to alternative plan designs, as well as providing an analysis of certain aspects of PERA’s current defined benefit and defined contribution plans.

The study will be similar in scope and purpose to a study that took place following similar legislation in 2014. That study compared various facets of the PERA DB Plan—such as cost per member, contribution rates, income replacement ratio, and portability—to other public and private sector plan types, including Social Security. The study concluded that PERA’s plan provides a better benefit at a lower cost than other plans, making it the best option for providing retirement benefits to the state’s public employees.

READ MORE: Key PERA Features Make Colorado’s Largest Retirement Plan Efficient and Effective (from 2015)

As Colorado’s public workforce evolves, it’s important that Colorado PERA remain flexible enough to meet the membership’s changing needs. This study will help policymakers assess PERA’s continued value in recruiting and retaining a highly qualified public workforce in the years ahead.

If HB24-1427 is signed into law, the State Auditor and PERA will have until the end of October to select an actuarial firm. When the study is complete, PERA and the State Auditor will provide a report of the study’s findings to the governor, the Joint Budget Committee, the Legislative Audit Committee, and the House and Senate Finance Committees.

In addition to HB24-1427, lawmakers have passed two other PERA-related bills, both of which will expand provisions for PERA members who return to work in retirement. Those bills have been sent to the governor for his signature.

RELATED: 2024 Proposed Legislation Status

News You Should Know: Proposed Budget Includes Pay Raises for State Workers

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Will Pay Raises Be Enough to Stem Colorado’s State Worker Shortage? | The Colorado Sun

The General Assembly is currently considering the proposed 2024-2025 state budget, also known as the Long Bill. The $40.6 billion bill includes pay raises for some of the state’s hardest-to-fill positions, such as health care workers. Officials say the increases will help, but more work is needed to fill shortages that continue to persist in some sectors.

Pharma Targets Colorado Drug Affordability Board | POLITICO

Amgen, maker of the rheumatoid arthritis drug Enbrel, is suing Colorado’s Prescription Drug Affordability Board. The Board, which was created in 2021, declared Enbrel unaffordable in February, setting the stage for Colorado to set a maximum price for the drug. The drugmaker is challenging the Board’s decision and its authority to cap prices.

How a New Rule Could Change the Way Advisers Handle Your Retirement Money | The New York Times

The U.S. Department of Labor is preparing to release a final rule that will expand the number of financial professionals who are required to act as fiduciaries—meaning they must act in the best interest of their clients. The new rule is currently under review at the White House, after which it is expected to be published this spring.

IRS Has 940,000 Unclaimed Tax Refunds About to Expire | The Associated Press

The deadline for filing 2023 tax returns—April 15—is right around the corner. But the IRS says nearly a million people still haven’t filed and claimed their refunds from 2020. The unclaimed refunds amount to over $1 billion, and taxpayers have until May 17 to claim those refunds.

News You Should Know is a digest of news from publications around the nation about finance, investing, and retirement.

America Saves Week: Three Reasons to Save More This Year

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Saving money is always a good idea. Whether it’s for a rainy day or for a major purchase, saving now can help provide flexibility and security when big expenses come down the road.

April 8 through April 12 is America Saves Week, an annual initiative of the Consumer Federation of America, a nonprofit consumer advocacy organization. It promotes the value of saving money and the importance of making a plan to save.

Beyond peace of mind, here are some additional reasons to consider stashing away some more money this year, if you can.

Take advantage of high interest rates

The Federal Reserve started raising its key interest rate in March 2022 in an effort to fight inflation. Increases continued throughout 2023, and so far this year, the Fed is holding rates steady.

While the Federal Reserve rate mostly pertains to financial institutions, many banks have passed on those higher rates to their customers. That means interest rates on many savings accounts and certificates of deposit (CDs) are higher than they’ve been in years.

Some high-yield accounts, especially those offered by online banks, advertise rates of 5% annual percentage yield (APY) or higher. On a $5,000 account balance, 5% APY can result in $250 in interest earnings over the course of a year. That extra cash from interest could help you reach your goals faster or help you pay for an unexpected expense.

You may be eligible for a tax break

If you make pre-tax contributions to a retirement plan such as an IRA, 401(k), or 457 plan, you may already be reducing your taxable income. But you may also qualify for an additional tax break for a portion of your contributions, based on your income.

The Retirement Savings Contributions Credit, also known as the Saver’s Credit, offers a credit between 10% and 50% of eligible retirement plan contributions (for a maximum credit of $1,000 for single filers or $2,000 for joint filers).

For tax year 2023, the maximum income for a single filer to qualify for the Saver’s Credit is $36,500 ($73,000 for joint filers).

Boost your retirement security

PERA members are already setting aside money for retirement with every paycheck. Members in the PERA Defined Benefit Plan can count on PERA to provide monthly retirement income for life, but you’ll never regret having more money available in your golden years.

Whether you’re saving in a traditional savings account, an employer-based plan such as a PERAPlus 401(k) or 457 Plan, or even a health savings account (HSA) if eligible, additional savings can provide the flexibility to cover expenses that are hard to plan for. That could include costs like health care—one of the biggest (and growing) expenses—in retirement, long-term care, family needs, and housing.

Colorado PERA will be sharing more information and tips for America Saves Week on social media, so be sure to join the conversation on Facebook and Instagram.