Will iI be able to access my fund at the point of Retirement-Odunze Reginald C

 

 Image credited to ambafrance

Retirement can come in different ways what we may refer as the 4Rs of pension, namely resignation, retirement , retrenchment or rightsizing.

Which way it comes, it boils down to one thing , you are out of job.

what comes down to the minds of the contributors are we I be able to access my fund.

In all the presentations , I have done in pension related matters , numbering about 3000, spanning over a period of Eight years in the following sates  Zamfara,  Nasarawa, Abuja , Enugu, Imo , Kwara,  Osun, Lagos etc  in both private and public sectors, the most re occurring question is how safe is my contribution.

The safety of any fund is the basic criteria in setting up the fund, when a fund has no safety; it is of no use in setting it up.

In an article by Odunze which appeared in 2011, titled “The Task of managing and safeguarding the pension fund” Odunze opined that  “With the call in Europe and America for an extension of the retirement age due to the failure of the pension schemes as a result of the last global financial crises, it becomes pertinent for the pension fund administrators, the pension fund custodian and the National pension commission . PenCom to embark on stringent financial and investment strategies to put the schemes on sound footings. This becomes necessary to safeguard the pension fund”

The failures of the National Provident Fund Act of 1973, The Pension Act of 1990 and the NSITF Act of 1993 are all fresh in our memories. The business environment is becoming more and more complicated, so also is the human nature and behavior. They all fail because of several reasons, which included corruption, not maintaining a good data base, not proper oversight function, non challant attitude of the officials involved.

The Pension Reform Act 2004 clearly pointed the provisions of Pension fund custodian, pension fund Administrator and the National pension commission have careful delineated duties that has serves as check and balances to the establishment, administration and running of the schemes to make it safe and profitable to both the contributors, retirees, and return on assets to the administrators and other stakeholders in the scheme.

The recent amendment of the 2004 Pension Reform Act, which resulted in its repeal and the subsequent provisions of the Pension Reform Act 2014 will positively consolidate more on the pension assets as the relevant portions of the law has increased the coverage to states, local governments, and employers with minimum of three employees.

 There is also the consolidation of the pension reform act as aptly captioned by the highlights of the pension reform act 2014, it should be noted that   “The Pension Reform Act 2014 has consolidated earlier amendments to the 2004 Act, which were passed by the National Assembly. These include the Pension Reform (Amendment) Act 2011 which exempts the personnel of the Military and the Security Agencies from the CPS as well as the Universities (Miscellaneous) Provisions Act 2012, which reviewed the retirement age and benefits of University Professors. Furthermore, the 2014 Act has incorporated the Third Alteration Act, which amended the 1999 Constitution by vesting jurisdiction on pension matters in the National Industrial Court. 

Punishment for defaulting employers : the pension reform act  in Section 11 (6) of the Act provides that an employer who fails to deduct or remit the contributions of its employees within 7 working days from the date salary is paid, in addition to making the remittance already due, will be liable to a penalty to be stipulated by the Commission.

Furthermore, Section 105 (1& 2) on offenses under the Act empowers the National Pension Commission (Pen Com), subject to the fiat of the Attorney General of the Federation (AGF), to institute criminal proceedings against employers who persistently fail to deduct and/or remit pension contributions of their employees.

With all these provisions, the scheme has the necessary provision to ensure compliance and safety of the fund as pension fund custodians are expected to have an indemnity of three times the value of their fund, in the case of custodian going bankrupt.

Odunze Reginald a, Retirement and financial planning specialist is the Lead Consultant, Chareg Consulting, a management and marketing  consultant  a social media and social marketing consultant , you can visit our twitter anchor @regydunze, find us on Facebook @ Reginald odunze and reginaldodunze.com, at google+ @ Reginald Odunze and at Linkedin@reginald odunze.

Retirees Get Relief from Medicare Sticker Shock - By Gail Buckner

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 (Reuters)

Although the recently-enacted 2016 budget act took away some popular Social Security claiming strategies, it gave seniors something else: a reprieve from as much as a 50% increase in their Medicare Part B premiums next year.
The unprecedented premium increase came about because, due to low inflation, there will be no cost-of-living adjustment, or COLA, applied to Social Security benefits.  Retirees will receive the same monthly amount they are getting this year.  However, based upon projected costs, Medicare determined that it needs to raise Part B premiums. (1)
The net result is that, after the higher Medicare premium is deducted from their monthly Social Security check, the average senior would see their income decline.  To prevent this from happening, years ago Congress passed a “hold-harmless” provision, which prohibits Medicare from increasing a senior’s Part B premium if it would reduce their Social Security benefit.

However, this only applies to 70% of retirees.   The remaining 30% would bear the full cost.  This group includes Medicare beneficiaries who do not receive Social Security (such as retired state or municipal employees), those just starting Social Security next year, and “wealthier” retirees, some of whom would see their monthly Part B premium rise from $337.70 to $509.90/month.
That’s not going to happen.
Spreading Out the Cost
As part of the 2016 budget deal worked out between Congress and the White House, the maximum increase a retiree will see in their Medicare Part B premium next year is 16%, according to Tricia Neuman, a senior vice president of the Kaiser Family Foundation and director of its program on Medicare Policy.
That’s because the Treasury is going to lend Medicare $7.4 billion to cover the rest of the money it needs.
Don’t worry.  Seniors will eventually pay this back over time thanks to the addition of a month surcharge.  The chart below illustrates what someone’s Medicare Part B premium will be in 2016 based upon their income:

Notice that the 70% of retirees who fall into the “hold harmless’ category for 2016 will see no premium increase at all. They will continue to pay $104.90.  They are also exempt from the surcharge.
The remaining 30% of retirees will see their premiums go up 16% plus a surcharge of $3.00-$9.60 per month.
According to Neuman, if there is a Social Security cost-of-living adjustment in 2017 and fewer people are affected by the hold-harmless provision, then more people will pay the surcharge.  The net effect is that the cost of this year’s big jump in the Part B premium “will be spread over a larger group of people over a longer period of time.”
She stresses that, “It’s not a permanent surcharge.  Payment continues until the loan from the Treasury has been paid back.”   Politically, this approach conveniently makes this provision “revenue neutral,” meaning it does not technically increase the federal deficit.
Surprise! Good News About Medicare
Despite the headlines about fraudulent billing and higher outlays, Neuman maintains that “if you look at the near-term, Medicare has had an extraordinary couple of years, growing slower than private insurance on a per person basis.”  She points out that “Medicare spending in 2014 was $1200 less than the [Congressional Budget Office] had projected in 2010…Medicare is fully funded through 2030.”
Like Social Security, Medicare’s challenge is our country’s changing demographics. Americans are living longer than ever and the national birthrate has declined slightly, meaning fewer individuals will be entering the workforce in the future and paying into the system.   Thus, even though Medicare spending has grown more slowly than the economy, the cost is still going up.
According to Neuman, “The question is how the country will finance healthcare for our aging population.”
1. The premiums paid by retirees cover 25% of the cost of doctor and office visits; the federal government’s share is 75%.
Culled  from fox business

Americans over 30 are more miserable than they’ve ever been - By Catey Hill

It all goes downhill after 30 — at least when it comes to happiness.

“Adults over 30 are less happy than their predecessors,” concludes a study published online Thursday in the journal Social Psychology and Personality Science, which examined happiness data from more than 50,000 adults, gleaned from the General Social Survey, carried out by NORC at the University of Chicago, a nonpartisan, independent research organization, which has collected information about American adults since 1972.
From 2010 to 2014, adults over 30 had an average happiness score of just 2.18, compared with 2.24 a decade ago. That’s significant considering happiness scores were measured on a tiny scale from just 1 to 3, with 1 being “not too happy” and 3 being “very happy.” (The data used five-year cohort periods so that single year fluctuations were smoothed out.)
What’s perhaps even more interesting is that, for the first time ever, adults ages 18 to 29 were happier than adults over 30. “The happiness advantage of mature adults over adolescents has dwindled,” write the authors of the study, entitled “More Happiness for Young People and Less for Mature Adults: Time Period Differences in Subjective Well-Being in the United States, 1972 - 2014.”
While the authors don’t know for sure why younger adults are happier than older ones for the first time in at least 40 years, they do have some theories. First, rising inequality may have more of an impact on the well-being of older adults than on younger ones, who are more apt to think they can overcome such things given that they have more time. And older adults may be more disappointed by the “increasingly unrealistic expectations for educational attainment, jobs, material goods and relationships,” the authors write, while younger adults still have hope for these things.
That said, there are plenty of studies that show we get happier as we get older (including a study published in 2011 in the journal Psychology and Aging, which revealed that “emotional experience improves with age”).

In general, women are slightly happier than men, the authors found — a finding that’s backed up by other research, including a worldwide survey by Gallup, which found that 40% of women were very happy, compared with only 34% of men. Researchers aren’t quite sure why this is, but the differences between the genders in terms of happiness tend to be fairly small.

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Culled from MarketWatch

How Divorce Affects Social Security Benefits By Barbara E. Weltman

Divorce has no impact on a person who collects retiree benefits based on her or his own earnings record. The worker simply applies for benefits when eligible (e.g., becoming disabled or being age 62 or older). And the worker’s current spouse can receive benefits based on the worker’s earnings record. However, if you are an ex-spouse you may be able to claim benefits based on your former partner’s earnings record. This is called spousal benefits.

Eligibility for Spousal Benefits

As an ex-spouse you may receive benefits based on your ex-spouse’s earnings record, even if he or she has remarried, if all of the following conditions are met:

• You are entitled to benefits due to age or disability.
  
• The marriage lasted 10 years or longer.
  
• You are unmarried when applying for benefits. If you had remarried but are currently single due to death, divorce or annulment, then you are treated as unmarried for this purpose.
  
• Your ex-spouse is at least 62 years old.
  
• Your own benefits are less than what can be received based on the ex-spouse’s earnings record.
  

If your ex-spouse has not applied for benefits but could qualify (e.g., he or she is at least 62 years old), as an ex-spouse you can still receive benefits based on your ex-spouse’s earnings record if you have been divorced for at least two years.
If you’ve been divorced from more than one spouse and each marriage lasted at least 10 years, you do not get to double dip on benefits. If you collect a spousal benefit, it is based on the earnings record of the ex-spouse with the greater earnings record.
If you remarry after beginning to collect spousal benefits, the benefits will stop.
To prove eligibility, be prepared to present a lot of paperwork. You need to show a marriage license and divorce decree (and a death certificate if the former spouse has died). It is not necessary for a former spouse to consent to your collecting benefits based on his or her earnings record (your former spouse likely will not even know you are collecting on his or her earnings record). It is not necessary for a divorce decree to provide for this option.

Amount of Benefits

The benefits that you receive as an ex-spouse depend on your age and earnings record, whether you are currently working, and the amount that can be received based on your ex-spouse’s earnings record. Obviously, if your own earnings record generates greater benefits than a spousal benefit, you collect your own benefits. But if the benefits are not greater, then your options depend on your age when you apply for benefits.
If you have not attained full retirement age (currently 66). (See How Are Social Security Benefits Estimated & Taxed? for chart to determine what your retirement age will be.) You can collect the higher of your own or spousal benefits. Spousal benefits are 50% of the worker’s benefits at full retirement age. If your former spouse continues to work past full retirement age in order to obtain delayed retirement credits, this does not increase your spousal benefits.
If you commence spousal benefits before you have reached full retirement age, you are not permitted to switch to collecting personal benefits when you do attain full retirement age. Thus, this option should be used only if you’re confident that your personal benefits will ultimately be smaller than 50% of your former spouse’s benefits.
If your former spouse is younger than you, you can commence personal benefits if you are at least 62 years old and then switch to spousal benefits when your spouse reaches age 62. This assumes that the switch to spousal benefits would produce a greater benefit than your personal benefit.
When collecting benefits (your own or spousal benefits), if you continue to work, your benefits may be reduced. You lose $1 for each $2 of benefits if you are under the full retirement age and your earnings exceed a set amount. For 2015, the earnings limit is $1,310 per month ($15,720 per year). Thus, if you earn $2,000 in October, your benefits are reduced by $345 ([$2,000 - $1,310] ÷ 2).
If you have attained full retirement age and have an earnings record. You can receive the divorced spousal benefit now and delay receiving your personal benefits until a later date in order to accrue delayed retirement credits. This choice maximizes your Social Security benefits.
Regardless of your age, your Social Security benefits may be reduced if you also collect a benefit from the Federal Employees’ Retirement System at the same time. (e.g., your ex-spouse was a federal civil servant). Under the Windfall Elimination Provision, non–Social Security benefits are reduced by a complicated formula that can result in a reduction of about 32%. The formula is intended to optimize benefits paid to lower-paid individuals.

If the Worker Dies

If your former spouse dies, you may collect benefits as a widow(er) as long as the marriage lasted at least 10 years. Survivor benefits are 100%, rather than 50%, of the former spouse’s benefits. As a survivor, your retiree benefits can begin when you attain age 60; you do not have to be age 62 or older. What’s more, even if you remarry, this does not affect eligibility for survivor benefits as long as you are at least 60 years old (or 50 years old if disabled).
The 10-year marriage rule does not apply if there is a natural or adopted child of your ex-spouse spouse in your care. The child must be under age 16 or disabled and receiving benefits on your ex-spouse’s earnings record.

The Bottom Line

You can get an estimate of spousal benefits if you know your former spouse’s Social Security number and approximate earnings history by using a Social Security benefits estimator. However, because of the varying options for collecting benefits if you are divorced, it is best to discuss in person or by telephone your eligibility and benefit options with the Social Security Administration. Be aware that your former spouse will not know that you’ve applied for benefits based on his or her earnings record if you go this route. And if your former spouse collects spousal benefits based on your earnings record, this will not impact your personal benefits in any way.

source Investopaedia