You may recall that back in April, the world’s largest retailer faced the prospect of a class action lawsuit with an estimated 1.5 million plaintiffs. Women workers at Walmart were claiming gender discrimination as a result, they said, of few promotions and lower wages than their male counterparts. The 9th Circuit Court of Appeals gave the thumbs up on the suit although the number of plaintiffs was reportedly reduced by nearly two-thirds.
Last week, Walmart asked the U.S. Supreme Court to overturn that lower court’s ruling. The company claims the 9th Circuit’s ruling is at odds with previous rulings by the high court. Walmart attorneys, of course, say if the Court of Appeals ruling is allowed to stand, it will have huge implications for other businesses. Not promoting or paying women equally with their male counterparts? Yeah…I’d say we’re all interested in that. The Supreme Court should decide whether they’ll hear the case later this year. Hang in there, gals! Until next time, here’s to good planning!
You probably don’t have to worry about whether or not the money you contribute to your 401(k) gets into your account. You may have to be thinking about the fees you’re paying (I discussed that last time). But there have been increasing numbers of employers who have pilfered employee money before it’s gotten invested. I know times are tough, but do these people think they won’t be caught or that the employees aren’t eventually going to notice?
The federal agency responsible for monitoring this activity is the U.S. Labor Department’s Employee Benefit Security Administration. They’ve really had their hands full in the last few years. One recent case involved Eric C. Mitchell & Associates, Inc. in Bedford, New Hampshire. Seems the plan’s trustee, Eric C. Mitchell, directed more than $20,000 of employee contributions into the company’s accounts for regular business operations. Then there is Explore General which snatched $70,000 in employee contributions and $100,000 in employer matches.
To protect yourself, monitor your account statements (on paper and online) to guarantee that your dough is getting to your account. If you think your employer is having money trouble, be especially vigilant in your review. Companies have 7 days to deposit the employee contributions. If they seem to be consistently late, don’t hesitate to call the Labor Department: 1-866-444-3272. Until next time, heres to good planning!
That probably seems like an odd question. But if you contribute to a 401(k) plan at work, then you’re going to want to know about the new regulations issued recently by the U.S. Department of Labor. In a move that’s good news for employees, these new rules will require 401(k) service providers to disclose all the fees that are deducted from a participant’s account. In addition, service providers that are paid $1,000 or more must document the direct and indirect compensation they receive. You may be surprised at what you see.
Direct compensation is paid directly from the 401(k) plan; indirect compensation comes from sources other than the plan sponsor (your employer) and goes to the 401(k) record-keeper, investment manager, etc., for things like sales charges, redemption fees, surrender charges, etc. There are a number of moving parts to every 401(k). Each gets its cut. More than 50 million Americans are saving for retirement in a 401(k) plan. These plans vastly outnumber the number of pension plans (defined benefit).
And that 1%? The Government Accountability Office reports that a 1% difference in 401(k) fees can cut your retirement assets by almost 20%. Fees do matter. And on July 16, 2011, you’ll be able to see just how much your employer’s plan costs. In the meantime, find out what the expenses are for the funds you’re currently holding in your account. If it’s not on your statement, call the fund company and ask for a prospectus. That’ll tell you everything you need to know. Good luck. Until next time, here’s to good planning!
So a friend emailed me last week about how to get copies of her credit report. It’s been a while since I’ve blogged about this (and a while since I’ve gotten my own reports from the three credit reporting agencies) so I thought I’d mention it again. Just something to take care of before Labor Day as everybody gears up for the fall.
· You can do it online at www.annualcreditreport.com/cra/index.jsp . This site is run by the Federal Trade Commission (FTC)
· You can call: 1-877-322-8228
· You can get a request form at the web site above and mail it to: Annual Credit Report Request Service, P. O. Box 105281, Atlanta, GA 30348-5281
Don’t wait for an unpleasant surprise. Know what on your credit report and stay in control of your finances. Until next time, here’s to good planning!
So, it was a U.S. District Court judge last week that ruled against what he said were “unfair and deceptive business practices”. We’ve heard this about many other businesses in the last few years and it is getting pretty old. But when a judge accuses a big corporation of “profiteering”, then it’s definitely something I’m going to blog about. And, you didn’t think there could be more negative news about a big bank? Enter Wells Fargo & Co.
They’ve been ordered to pay customers $203 million, to reimburse them for multiple overdraft fees. If you were a Wells Fargo customer, your online checking account would show your checks coming into your account in chronological order. But, in reality, the bank had changed it policies to process checks, debit card transactions and bill payments from the highest dollar amount to the lowest. That meant, if you had a modest balance in your account, you would be much more likely to bounce checks. In many cases, some customers would have overdraft fees amounting to hundreds of dollars in one day. Now, of course, the best way to avoid overdraft fees is to have enough dough in your account. But during tough times, a lot of people are on the edge. Bank records reportedly showed that nearly 40% of the bank’s overdraft revenue was coming from four percent of its customers.
Judge William Alsup has ordered Wells Fargo to reverse overdraft fees charged to customers from November 15, 2004 through June 30, 2008. The bank changed it’s policy earlier this year, but is appealing the decision (because they want more bad publicity). Until next time, here’s to good planning!
The Internal Revenue Service (IRS) announced last week that’s it’s going to stop releasing information about back taxes, child support or delinquent federal student loans owed by taxpayers. Referred to as “debt indicators”, this information has been sent in the past to tax preparers by the IRS as an acknowledgement after a tax return was filed electronically. The Agency, apparently, letting the preparer (and the taxpayer) know the client’s refund may be redirected to pay these debts. These indicators have been used by larger tax prep. companies to provide refund anticipation loans. Those loans have been heavily criticized by consumer groups because they generally come with high fees and interest rates. They are frequently offered to lower income taxpayers who need their refunds ASAP.
So, why’s the IRS dropping the debt indicator? Since refunds can be direct deposited into a taxpayer’s bank account fairly quickly, the Agency figures it can still withhold a refund if back taxes are owed, and the Feds can move the money quickly…sometimes within ten days. It may also reduce the number of refund anticipation loans, which would be a good thing, Martha. I’m old fashioned. I mail in my returns…and will continue to do so until it’s no longer an option. Until next time, here’s to good planning!
It’s official. The Bay State is having another weekend where the state’s 6.25% sales tax will not be added to most purchases under $2,500. It’s this coming weekend, August 14-15. Not that I want you to run out and spend wildly. But if you’ve had something on your list for a while, or you’ve got a long list of school supplies to get, this might be the best weekend to get things purchased, including beer, wine and alcohol.
The MA Department of Revenue estimates consumers may save between $20 and $23 million. That’s certainly a chunk of money I’m sure the state could use, but tax revenues are bound to be significantly higher through the increased economic activity that’s bound to be generated. The state has done this for several years and it’s always a popular move. It’s especially popular with the Retailers Association of Massachusetts which has hailed the move as an important stimulus in this tough economy. 19 states are having a sales tax holiday this year according to the Federation of Tax Administrators.
So, make a list of the bigger ticket items that you need….and happy shopping! Until next time, here’s to good planning!
I’m pretty tired of hearing about the end of the world that’s on its way because of the new health law. I’d prefer to see how everything plays out once it starts kicking in. But I did notice an article last week on CNNMoney.com about how employers may start having dependent eligibility audits done in an effort to weed out those who shouldn’t be part of an employee’s family coverage. Eligibility audits typically boot 10% of listed dependents. Of course, the new health insurance law will allow parents to keep their kids (up to age 26) on their health plan.
Some employers will be moving toward the “spousal carve out” plan. If your spouse can get coverage through his/her employer, then your employer may deem him/her ineligible or add a surcharge to your coverage. Actually, I’ve seen that already for domestic partners coverage. Eliminating ineligible dependents can save companies between 4% and 6% of their annual health care premiums. That’s not chicken feed.
So, going forward, you may see a request for a copy of your marriage license…or divorce decree. Apparently, some employees continue to claim their ex-spouse on their health coverage, even though the divorce paperwork says otherwise. Some divorces require continued coverage for the ex. Bottom line, don’t try to fudge coverage for someone. If your company has a code of conduct, you might end up losing your job. Is it worth losing your job just to cover your daughter-in-law? Until next time, here’s to good planning!
The economy, consumer spending, unemployment. All pieces of the overall financial puzzle that are clawing their way back from the Great Recession. But that’s not what I’m referring to this morning as I blog about the “clawback” lawsuits that must be filed by December of this year. Irving Picard is the court-appointed trustee charged with recovering as much money as possible in the Ponzi scheme run by Bernard L. Madoff Investment Securities. These suits will be aimed at the Madoff investors who withdrew more money than they’d originally invested. In an article in one of last week’s Wall Street Journal Picard calls these folks “net winners” even though, like everyone else, they knew nothing of the Ponzi scheme. They withdrew money for the usual reasons: required minimum distributions, income taxes, charitable donations, etc.
There are roughly 2,000 net winners in the Madoff scam. Picard says about half of them could wind up getting sued. They, of course, aren’t jumping at the chance to give up what they believe was their money so that it can be turned over to those who kept their funds with Madoff until the ship sank. Even though Picard’s impending suits have been approved by a bankruptcy judge, some of the net winners have appealed that judge’s decision.
More than $1.5 billion has been recovered thus far and another $15 billion is being pursued from Bernie’s brother, sons and a number of those “feeder funds” that funneled dough into the scam. Picard says he will exempt those who can prove that returning some of the money will create a hardship. It’s a tough situation. Until next time, here’s to good planning!
I just saw a report from Fairmark Press about a policy that’s been instituted by Google, THE online search engine. Now, they aren’t the first company to do this, but they’re certainly the most well-known. Thousands of companies offer the same health benefits to their gay and lesbian couples that they provide for their heterosexual married employees. But the non-het folks get taxed on the value of the partner/spouse’s premium. It’s called imputed income. Google recently announced that it’ll cover the added cost of the imputed income…not in the employee’s paycheck, but rather in a separate check. Google honchos view the added tax as being discriminatory. Since health insurance generally gets more expensive as one ages, gay Baby Boomers nearing retirement are shelling out a pretty penny for the additional tax…something their heterosexual co-workers don’t have to bother with.
Google is doing this to continue attracting the best talent. And it does make it a tad more expensive for them to hire lesbian and gay workers. That’s a luxury a smaller company may not be able to afford. It would be much more efficient to eliminate the Defense of Marriage Act and change the tax code to get rid of imputed income. But, until that happens, Google’s doing the right thing. It’s progress. Until next time, here’s to good planning!
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