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Cypen & Cypen
March 26, 2020

Stephen H. Cypen, Esq., Editor

Yes, I know, I am just as keen to write about other topics than the public pension funding woes, as readers are to read about them, but I nonetheless find myself revisiting an article I wrote back in January, “Six Key Charts That Prove Why There Is No Alternative To Pension Reform In Illinois.” In that article, I shared the results of my calculations demonstrating that the projections of 90% funding in 2045 were shaky, and that only small differences in modeling assumptions would have a dramatic effect on this objective. At the time, I put together several scenarios that seemed moderate to me, using the data in the Teachers’ Retirement System actuarial valuation: assuming that assets only return 6% rather than 7% over time, assuming that assets return 6.5% but in recognition of this the valuation interest rate is likewise changed, and assuming there’s a 33% asset crash before resuming the same 7% asset growth/liability discounting — all possibilities that seemed reasonably likely.
What I did not do was model a worst-case scenario, that is, combining the two. In light of the dramatic market drops in the past several days, I’ve updated my calculations in the following four charts, which add a further scenario, that of an immediate 33% asset crash followed by an asset return/liability discounting of 6.5% rather than resuming a 7% assumption.  And readers of that prior article will recall there were two ways of calculating these outcomes: first, using the contributions already scheduled to achieve the 90% 2045 funding level; and, second, an alternate contributions that would be sufficient to reach a 70% funding level, based on some statements that Gov. Pritzker has made that suggest he’s considering an existing proposal to scale back the funding target (again, the context is in the original article).
So here are the results of these new calculations.  First, with contributions corresponding to a 90% funded status target, and a 33% asset crash and ongoing 6.5% discount rate, the funded status never manages to improve beyond the upper 20%s.  Second, with contributions corresponding a 70% funded status target, the actual funded status persistently declines to not much more than 10%.  In terms of unfunded liability, following the schedule dictated by the 90% contribution goal but with the unfavorable circumstances, the unfunded liability continues to climb rather than ever declining.  And, not surprisingly, the numbers are even worse if following contributions based on a 70% target.
Now, the good news, if you can call it that, is that the public comments of the folks at the TRS system claim that they are well-insulated from these risks. The folks at Capital Fax.com cite Dave Urbanek of TRS:  “We started 2020 with $54 billion in assets – which is a record high for TRS. And for the last several years, the Board of Trustees and the investment staff have structured the portfolio in a ‘defensive posture’ because of our low funded status.  We have recognized that any severe economic downturn could be bad for us – we have no ‘reserves’ to fall back on. So when deciding how to invest assets, we’ve regularly performed ‘stress tests’ on the portfolio – ‘what will things look like if X happens’ – to help us form the defensive posture. The over-arching goal has been to preserve assets and lower risk as much as possible while making as much money as we can. For instance, we only have 36 percent of the portfolio in stocks, both in the U.S. and internationally. We have 27 percent in bonds, 15 percent in real estate, 11 percent in private equity and about 10 percent in hedge funds and other ‘diversifying strategies.’”
Has the system truly managed to invest in such a manner as to protect them from market crashes? That seems too good to be true. It’s simply a given that diversifying investments to provide such protection inevitably comes at the cost of lower returns than otherwise, and, in fact, in 2018, Crain’s Chicago Business reported that the opposite was true:  “Illinois Teachers’ Retirement System, the state’s biggest pension fund, is relying heavily on risky, expensive investments as it tries to claw its way out of a quicksand of unfunded pension liabilities.  The pension fund, which has only enough money to cover 40 percent of its future obligations, has steadily increased allocations to private-equity funds and only recently reversed course on investing with hedge funds despite lackluster results for both.”And all of this neglects the further likelihood that in the case of a serious recession, even the existing contribution schedule would be thrown out the window.
Finally, for avoidance of doubt, I do not find any pleasure in some prospect that these grim numbers might force the state to face the reality of its pension underfunding. Rather, it angers me to see the outcome of a longstanding failure to fund, as if we would forever be protected from unforeseeable rainy days rather than anticipating them.  Elizabeth Bauer, Forbes, March 13, 2020.
Only 1 in 5 families have liquid savings of more than three months of their income.  EBRI looks at employers’ motives and goals for addressing the issue.
EBRI Classified a Subset of “Emergency-Fund-Focused Employers” Among All 2019 Financial Wellbeing Survey Respondents  more than 4 in 10 employers with an interest in offering financial wellness programs said they offer or plan to offer an emergency fund/employee hardship assistance.  Retirement preparedness factored strongly into top issues emergency-fund-focused employers hope to address with financial wellness initiatives. Preparing for unexpected expenses was nearly twice as commonly cited by such employers vs. all survey respondents.
Notably, there is often a disconnect between reasons given for offering financial wellness initiatives and approaches to measuring their success for both Emergency-Fund-Focused Respondents (EFF) and all respondents. Improved overall worker satisfaction was cited as a reason for offering financial wellness initiatives far more often by EFF and all employers versus as a success measure. However, while improved work force management was equally cited as a reason and as a success measure by all employers, it was twice as commonly cited as a success measure versus a reason by EFF employers.  Lori Lucas, EBRI, March 19, 2020.
Contributions to large pension plans plunged in 2019, nearly matching their lowest point in the past 15 years, according to Russell Investments’ tracking of a group of 20 publicly listed U.S. corporations with pension liabilities in excess of $20 billion.
Dubbed the $20 billion club, these large plans saw contributions in 2019 similar to 2008, amid the global financial crisis.  Sources that keep track of defined benefit (DB) plan funded status found that, despite strong equity returns during 2019, most DB plan sponsors likely saw only a small improvement to their plan’s funded status over the year. The funded status of the nation’s largest corporate pension plans edged up slightly in 2019 as historically low interest rate levels mostly offset the strongest investments gains witnessed by plan sponsors since 2003, according to an analysis by Willis Towers Watson.

Russell Investments’ annual analysis of the $20 billion club, which represents nearly 40% of all pension and liability assets of U.S. listed corporations, also shows discount rates plunged due to a combination of Treasury rates declining and spreads tightening. Total liabilities on the $20 billion club’s collective balance sheet increased again in 2019 to $981 billion, up from a previous peak in 2017 of $975 billion. It also found investment returns achieved the highest dollar return in investments since the $20 billion club analysis began, achieving $125 billion for the group in 2019.  Yet contributions dropped drastically from $28 billion in 2018 to $12 billion in 2019, following a two-year boom motivated by U.S. federal tax reform. “With funding relief reducing or eliminating contribution requirements for many plan sponsors, they find little motivation to contribute more than required,” says Justin Owens, director, Investment Strategy & Solutions at Russell Investments. “The net effect of all of this is that funded status stayed roughly the same for the $20 billion club, likely frustrating sponsors who saw assets increase without a corresponding increase in funded position.”
In his February Pension Finance Update, Brian Donohue, partner at October Three Consulting, says, “Pension funding relief has reduced required plan funding since 2012, but under current law, this relief will gradually sunset. Given the current level of market interest rates, it is possible that relief reduces the funding burden through 2028, but the rates used to measure liabilities will move significantly lower over the next few years, increasing funding requirements for pension sponsors that have only made required contributions.”  Rebecca Moore, Plansponsor, March 11, 2020.
Estate planners and attorneys see a growing trend of ‘gray divorce’ affecting couples in their pre-retirement years, though the challenges of divorce impact workers of all ages.
The rise of “gray divorce” is dramatically affecting some couples’ retirement and estate planning efforts, according to a survey recently conducted by TD Wealth Management Services.  The report is based on an in-person survey conducted during the annual Heckerling Institute on Estate Planning event. As detailed by TD Wealth analysts, this year’s survey of estate planners and attorneys explored the increasing rate of divorce for those over 50. In addition to finding that divorce is challenging more couples in their pre-retirement years, the survey also cites challenges tied to prolonged life expectancy and rising health care costs.
“This upward trend around couples divorcing over the age of 50 has created a recent swirl among the estate planning industry,” says Ray Radigan, head of private trust at TD Wealth. “Gray divorce is adding another layer of complexity to the estate planning process that already arises with blended families, designation of heirs and the ever-changing domestic structures.”  Radigan says these factors mean it is more important than ever for financial professionals to proactively review and discuss the estate plans and retirement ambitions of clients and their families—and to do so on an ongoing basis. This suggestion is also buoyed by the fact that the recently enacted Setting Every Community Up for Retirement Enhancement (SECURE) Act also made important changes to the treatment of certain trust arrangements that may feature into clients’ estate plans.
Against this backdrop, the TD Wealth report finds, 39% of survey respondents identified “retirement planning and funding” as a “highly impacted” estate planning factor for those divorcing over the age of 50. Later-in-life divorce is also having an impact on determining who will be responsible for enacting power of attorney, the survey shows, and on determining appropriate Social Security claiming strategies and the drafting wills. All of these are areas where financial advisers’ expertise can be helpful.  Divorce is very costly for individuals and, in most cases, reduces people’s retirement readiness, according to the Center for Retirement Research at Boston College. The center’s National Retirement Risk Index (NRRI) in 2019 found that 53% of households that have gone through a divorce are at financial risk in retirement, compared with 48% of households that have not experienced a divorce.
Further, the net financial wealth of non-divorced households is $132,000, about 30% higher than the $101,000 held by divorced households. The center says that, overall, divorce raises the possibility of being at risk by 7 percentage points. For couples with a previously divorced spouse, the risk is raised by 9 percentage points.  Other costly effects of a divorce, the center says, include short-term legal fees. Divorce also frequently results in the sale of the house, which not only involves transaction costs but also can occur at a suboptimal time in the housing market.
Often, divorce requires that financial and retirement wealth be divided between two new households. If financial assets can be divided without being sold, divorce may not reduce total wealth. But if assets are sold, the timing may be bad and sales can involve transaction costs.  Divorce also increases daily living expenses because the divorced couple now occupy two households. They also lose the federal income tax break that married couples receive. In addition, divorced women often have children to look after, which can impede their ability to earn a living. And divorced men often are required to provide financial support to their ex-spouse while also paying the bills for a new family.  Among the findings reported in Allianz Life’s 2019 Women, Money and Power Study is the fact that financial confidence is actually on the rise for divorced women, who say they are feeling more financially secure (65% in 2019 versus 50% in 2016).  Interestingly, divorced women report feeling “increasingly on track financially” the longer they have been divorced. As such, women who have been divorced for more than 10 years say they have a better understanding of financial products they own, are better about setting and achieving financial goals, and are better about saving for long-term goals compared with women who have been divorced for less time.
Overall, only a quarter of women in the study say they currently have a financial professional, which is down from 30% in a similar 2016 study. Of those who are working with one, over half (60%) say their financial professional treats their spouse/partner as the lead decision maker, which may cause women to feel less independent (81% in 2019 versus 87% in 2016) or confident (83% in 2019 versus 91% in 2016) as a result of working with a financial professional.  “Women need to be empowered in all aspects of their lives, especially when it comes to finances,” says Lynn Johnson, vice president of financial planning strategies at Allianz Life. “They can start this process by working to educate themselves more on financial topics and products, by not being afraid to broach the oft-thought taboo topic of money, and seeking out a financial professional who understands some of the unique financial challenges that women face today.”  John Manganaro, Planadviser, March 12, 2020.
The Internal Revenue Service reminded taxpayers to remain vigilant with their personal information by securing computers and mobile phones. Proper cybersecurity protection and scam recognition can reduce the threat of identity theft inside and outside the tax system.  This news release is part of a series called the Tax Time Guide, a resource to help taxpayers file an accurate tax return. Additional help is available in Publication 17, Your Federal Income Tax.

The IRS doesn't initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information. People should be alert to scammers posing as the IRS to steal personal information. There are ways to know if it's really the IRS calling or knocking on someone's door.
The IRS also works with the Security Summit, a partnership with state tax agencies and the private-sector tax industry, to help protect taxpayer information and defend against identity theft. Taxpayers and tax professionals can take steps to help in this effort.
Below are a few tips to help minimize exposure to fraud and identity theft:

  • Protect personal information. Treat personal information like cash – don't hand it out to just anyone. Social Security numbers, credit card numbers, bank and even utility account numbers can be used to help steal a person's money or open new accounts.
  • Avoid phishing scams. The easiest way for criminals to steal sensitive data is simply to ask for it. IRS urges people to learn to recognize phishing emails, calls or texts that pose as familiar organizations such as banks, credit card companies or even the IRS. Keep sensitive data safe and:
    • Be aware that an unsolicited email with a request to download an attachment or click on a URL could appear to come from someone that you know like a friend, work colleague or tax professional if their email has been spoofed or compromised.
    • Don't assume internet advertisements, pop-up ads or emails are from reputable companies. If an ad or offer looks too good to be true, take a moment to check out the company behind it.
    • Never download "security" software from a pop-up ad. A pervasive ploy is a pop-up ad that indicates it has detected a virus on the computer. Don't fall for it. The download most likely will install some type of malware. Reputable security software companies do not advertise in this manner.
  • Safeguard personal data. Provide a Social Security number, for example, only when necessary. Only offer personal information or conduct financial transactions on sites that have been verified as reputable, encrypted websites.
  • Use strong passwords. The longer the password, the tougher it is to crack. Use at least 10 characters; 12 is ideal for most home users. Mix letters, numbers and special characters. Try to be unpredictable – don't use names, birthdates or common words. Don't use the same password for many accounts and avoid sharing them. Keep passwords in a secure place or use password management software.  Set password and encryption protections for wireless networks. If a home or business Wi-Fi is unsecured, it allows any computer within range to access the wireless network and potentially steal information from connected devices. Whenever it is an option for a password-protected account, users also should opt for a multi-factor authentication process.
  • Use security software. An anti-virus program should provide protection from viruses, Trojans, spyware and adware. The IRS urges people, especially tax professionals, to use an anti-virus program and always keep it up to date.  Set security software to update automatically so it can be updated as threats emerge. Educate children and those with less online experience about the threats of opening suspicious web pages, emails or documents.
  • Back up files. No system is completely secure. Copy important files, including federal and state tax returns, onto removable discs or back-up drives and cloud storage. Store discs, drives and any paper copies in secure, locked locations.

Taxpayers can find answers to questions, forms and instructions and easy-to-use tools online at IRS.gov. They can use these resources to get help when it's needed at home, at work or on the go.  IRS Tax Time Guide, IR-2020-56, March 13, 2020.
Teleworking during the Coronavirus outbreak? While working from home can help slow the spread of the virus, it brings new challenges: juggling work while kids are home from school; learning new software and conferencing programs; and managing paper files at home. As you’re getting your work-at-home systems set up, here are some tips for protecting your devices and personal information.

  • Start with cybersecurity basics. Keep your security software up to date. Use passwords on all your devices and apps. Make sure the passwords are long, strong and unique: at least 12 characters that are a mix of numbers, symbols and capital and lowercase letters.  
  • Secure your home network. Start with your router. Turn on encryption (WPA2 or WPA3). Encryption scrambles information sent over your network so outsiders can’t read it. WPA2 and WPA3 are the most up-to-date encryption standards to protect information sent over a wireless network. No WPA3 or WPA2 options on your router? Try updating your router software, then check again to see if WPA2 or WPA3 are available. If not, consider replacing your router. For more guidance, read Securing Your Wireless Network and Secure Remote Access.  
  • Keep an eye on your laptop. If you’re using a laptop, make sure it is password-protected, locked and secure. Never leave it unattended – like in a vehicle or at a public charging station.  
  • Securely store sensitive files. When there’s a legitimate business need to transfer confidential information from office to home, keep it out of sight and under lock and key. If you don’t have a file cabinet at home, use a locked room. For more tips, read about physical security.  
  • Dispose of sensitive data securely. Don’t just throw it in the trash or recycling bin. Shred it. Paperwork you no longer need can be treasure to identity thieves if it includes personal information about customers or employees.  
  • Follow your employer’s security practices. Your home is now an extension of your office. So, follow the protocols that your employer has implemented.  

Lisa Weintraub Schifferle, Attorney, FTC, Division of Consumer & Business Education, March 18, 2020
Five Democratic senators sent disturbing missives to three Trump administration officials about secret forces transforming the US courts and about one very powerful American lawyer in particular, Leonard Leo.  You may know Leo’s name if you’re steeped in the dramas of politics and law or were paying attention to the Supreme Court nominations of Neil Gorsuch and Brett Kavanaugh, which he helped orchestrate. He is co-chair of the conservative and libertarian legal advocacy group known as the Federalist Society, an organization recently described in the New York Times as “a juggernaut for propelling the courts to the right.”  And it is Leo’s involvement in the judge-and-justice-picking process that prompted the senators’ letters.
Attorney general Bill Barr, Office of Personnel Management director Dale Cabaniss, and White House counsel Pat Cipollone all got mail. Senators Sheldon Whitehouse, Richard Durbin, Sherrod Brown, Richard Blumenthal, and Mazie Hirono signed on, saying Leo’s involvement in nominating jurists while likely profiting from related fundraising activities raises concerns about conflicts of interest.  They want to see governmental communications with Leo while considering new legislation on this topic.
Leo is at the center of a complex network of nonprofits and shell entities funded largely by anonymous donors, which the senators say is problematic. That network collected $250 million in donations between 2014 and 2017, much of which funded ads promoting judicial nominations. He appears to also have a financial interest in these advocacy efforts yet won’t disclose those earnings.  If Leo had been a federal government employee, officially, consulting with the president about judicial nominees, he would have been subject to disclosure rules that could have illuminated potential conflicts. They also believe that if Leo didn’t qualify as an employee, his services most likely exceeded what the federal government can accept voluntarily, and may have violated restrictions on access to non-public records, too.
Still, Leo is just one guy, albeit one with considerable pull in politics and on pursestrings. To understand why his activities matter so much—why they represent a threat to the “bedrock American principle of equal justice under the law” as the senators claim—we must travel back to the last century, when the Federalist Society was a mere contrarian idea, just a twinkle in the eyes of right-inclined law students.  In its own words, the Federalist Society was created in 1982 by three aspiring lawyers to counter the “orthodox liberal ideology which advocates a centralized and uniform society” and “strongly” dominated the legal profession and law schools. Now, the group boasts 70,000 members and is arguably the most powerful force in American jurisprudence.  Still, it hasn’t abandoned the tone of a scrappy minority fighting a progressive orthodoxy. “While some members of the academic community have dissented from these [liberal] views, by and large they are taught simultaneously with (and indeed as if they were) the law,” the society’s website complains.
This characterization is too humble, however, and woefully incomplete. It ignores the society’s actual enormous influence.  Five of nine high court justices are members, after all. Four of them—chief justice John Roberts, Samuel Alito, Gorsuch and Kavanaugh—benefited from Leo’s advocacy on their behalf, as his bio notes. Clarence Thomas, Roberts, Gorsuch, and Kavanaugh have all spoken at recent Federalist Society events.  The organization’s sway can’t be overstated. The society advances an approach to legal interpretation known as textualism or originalism. Basically, textualists promote a strict reading of the law adhering to the original writers’ intent, as opposed to a take that considers social change. This literal approach has influenced lawyering across ideologies, and in 2015 progressive Supreme Court justice Elena Kagan credited Federalist Society hero, her colleague the now deceased Antonin Scalia, with turning everyone into a textualist, more or less.
Practically, as the society’s intellectual influence has grown, so has its fundraising network, along with its political power. Now, Trump, with the aid of Senate majority leader Mitch McConnell, has appointed an unprecedented number of federal judges, nearly 200. Most of them—85% of his appellate court nominees—are Federalist Society members.  As the president himself noted at last month’s state of the union address, the most impressive of these gets are his high court picks, Gorsuch and Kavanaugh. Both participated in the Federalist Society’s 2019 lawyers’ convention in November, with Kavanaugh headlining the opening event and Gorsuch closing the conference.  Before Kavanaugh gave his address, McConnell celebrated the Republican court-packing project to standing ovations from a sea of thousands of conservative attorneys. Former White House counsel Don McGahn, a member as well, also spoke.
In other words, the Federalist Society is no joke. Its membership roll boasts the most powerful lawyers in American politics and beyond. It has allies in all the highest places.  That would not be a problem if it was just a group of conservative nerds into close reading. But that’s not all they are, according to Whitehouse, and others.  “The American people ought to know who’s influencing their courts,” the senator told Quartz in an email. “There is a dark money campaign by partisan donor interests to capture our judiciary.”  Leo and the Federalist Society play a key role in that shady project, court commentators argue. Whitehouse and colleagues have been trying to shine a light on these “unprecedented and weird” developments, as he puts it, with limited success.  Last year, for example, the senator—along with Hirono, Durbin, Blumenthal, and Kirsten Gillibrand—filed an amicus brief in a controversial New York gun rights case before the high court. It caused a stir but in no way deterred conservatives.  “The Federalist Society’s Executive Vice President, Leonard Leo, has been linked to a million-dollar contribution to the NRA’s lobbying arm, and to a $250 million network largely funded by anonymous donors to promote right-wing causes and judicial nominees,” the lawmakers wrote.
They urged the justices to drop the divisive Second Amendment matter, which a change in local legislation arguably rendered moot anyway. Otherwise they risked eroding the public’s trust in judicial impartiality. The senators warned the court that deciding the case unnecessarily would turn the tribunal into a conservative tool, with the justices acting as puppets for groups that promised donors that their new guys, Gorsuch and Kavanaugh, would deliver the desired decisions on highly polarizing issues.
The Wall Street Journal editorial board was outraged by the lawmakers’ filing, calling it an “enemy of the court” brief. It defended the Federalist Society as a “network of bookish conservative-leaning students and lawyers” that couldn’t possibly influence politics.  “The Federalist Society doesn’t file amicus briefs. Its efforts are devoted to educational events and debates on public policy and law, and they aren’t secret. Liberals are welcome. If Mr. Whitehouse were interested in learning about opposing views, he might be too,” the board protested.  McConnell and Republican senators also joined the fray, sending the justices a strange letter reassuring them that they were safe from threatening Democrats. The justices, of course, did not respond to any of the brouhaha, at least not directly.  They didn’t drop the case and are expected to issue a decision in the hotly-debated matter by term’s end in late June. And their docket is packed with controversies—like last week’s arguments about abortion restrictions—that the left says have been designed specifically for review by the new conservative bench to overturn precedent.  So Whitehouse isn’t moved by the society’s defenders. Sure, some members are just intellectuals advancing a certain preferred legal philosophy. “That’s all fine, but it’s not the whole story,” he contends.  Leo’s central role in an anonymous fundraising network designed to influence the courts, Trump’s acknowledgment that the Federalist Society “picked” his judges, and McGahn’s admission that he sees the group as “in-sourced” to the White House to handle judicial selection, all show there’s more to the organization than spirited legal debate. Whitehouse suspects undue and untoward influence that he says undermines the rule of law itself.
If he could follow the money, maybe he could conclusively prove it. So far, however, the senators haven’t heard from administration officials they addressed for records, providing an April 3 deadline, or from the Federalist Society. (The Justice Department didn’t respond to Quartz’s request for comment).  “It’s an obvious problem when an anonymously-funded private organization has this role,” Whitehouse says. “And it’s improbable that this secretive quarter-billion-dollar dark money network would be engaged in these covert activities without ulterior motives.”   Ephrat Livni, Quartz, March 12, 2020.
A U.S. judge said Amazon.com Inc (AMZN.O) is likely to succeed on a key argument of its challenge to the U.S. Department of Defense’s decision to award cloud computing deal worth up to $10 billion to Microsoft Corp. (MSFT.O)  The opinion by U.S. Court of Federal Claims Judge Patricia Campbell-Smith was unsealed on Friday. On Feb. 13, she issued an order blocking work on the contract pending resolution of Amazon’s court challenge.
Amazon contends the contract was awarded to Microsoft because of improper influence by President Donald Trump.  The opinion did not mention Trump or address Amazon’s claims of improper influence, but instead focused on how the Pentagon assessed Microsoft’s data storage in one price scenario.  Campbell-Smith wrote that Amazon “is likely to succeed on the merits of its argument that the DOD improperly evaluated” a Microsoft price scenario. She said Amazon is likely to show that Microsoft’s scenario was not “technically feasible” as the Pentagon assessed.  Microsoft spokesman Frank X. Shaw said in a statement the company believes it will ultimately be able to move forward, noting the decision focused on a “lone technical finding by the Department of Defense about data storage” under one price scenario out of six. Shaw said in the one issue cited by the judge, “The government makes clear that in their view Microsoft’s solution met the technical standards and performed as needed.”
Amazon did not immediately comment on Saturday.  Campbell-Smith said, “In the context of a procurement for cloud computing services, the court considers it quite likely that this failure is material.”  Amazon, which had been seen as a front-runner to win the contract, filed a lawsuit in November just weeks after the contract was awarded to Microsoft. Trump has publicly derided Amazon head Jeff Bezos and repeatedly criticized the giant online retailer.
The Amazon lawsuit said the Defense Department’s decision was full of “egregious errors,” which were a result of “improper pressure from President Donald Trump.”  Bezos also owns the Washington Post, whose coverage has been critical of Trump and which has frequently been a target of barbs by Trump about the news media.
The Pentagon, which had planned to start work on the contract on Feb. 13, has said it was disappointed in the ruling.  As part of the lawsuit, Amazon asked the court to halt the execution of the contract, known as the Joint Enterprise Defense Infrastructure Cloud, or JEDI. The contract is intended to give the military better access to data and technology from remote locations.
Last month, Amazon’s cloud computing unit, Amazon Web Services, said it was seeking to depose Trump in its lawsuit and suggested the president was trying “to screw Amazon” over the contract.  David Shepardson, Reuters, March 7, 2020.
A prominent architect who told authorities he was upset about losing money in the stock market plunge has been arrested for allegedly attacking an Alameda County sheriff's deputy who stopped him in Pleasanton for erratic driving, a sheriff's spokesman said.  The deputy stopped Paul Powers, 58, of Pleasanton on Foothill Boulevard near the Castlewood Country Club in Pleasanton at about 6:10 a.m. on Thursday because of the way Powers was driving, according to sheriff's spokesman Sgt. Ray Kelly.

Powers pulled over in his maroon SUV but when he got out of his car he assaulted the deputy and made threats against him, Kelly said.  Powers and the deputy got into a struggle but the deputy was able to wrestle Powers to the ground and arrest him, according to Kelly.  The deputy suffered a sprained hand in the struggle but is expected to make a full recovery, Kelly said.  Powers suffered minor injuries and was examined at a local hospital but then was booked at the Santa Rita Jail in Dublin on suspicion of felony making threats against an officer and misdemeanor battery on a police officer.  Powers remains in jail in lieu of $30,000 bail and tentatively is scheduled to be arraigned on Monday if prosecutors file charges against him.

Kelly said that after Powers was arrested he told the deputy that he was upset because he had lost $250,000 in the recent stock market plunge and was having trouble at work.  Powers is president and chief executive of the KPA Group, a Pleasanton-based architectural firm, according to the firm's website.  Powers is described on the website as "a highly-skilled architect with more than 30 years of experience including master planning, programming, cost estimating, analyzing existing buildings, space planning, project design, interior design, and construction administration."

The website also said Powers is a nationally-recognized expert in aviation planning.  Powers has led the design, renovation and expansion of more than 35 airport passenger terminals, including projects in San Francisco, Santa Rosa and many other cities, according to the website. SFGate, Bay City News, March 14, 2020.

Discussing the topic of introducing guaranteed lifetime income products in defined contribution (DC) retirement plans, Rob Reiskytl, leader of Aon’s national retirement strategy and design team, says a few statistics his firm discovered in a recent survey should be illuminating.  “Our internal polling shows nearly 75% of employers in 2020 say they feel they should or would like to include lifetime income options in their DC retirement plan,” Reiskytl says. “At the same time, 75% of employees say they want access to some form of guaranteed income solution in their DC plan. So there is a consensus building on both sides of the DC plan—among employers and employees—that lifetime income belongs in defined contribution plans.”

This third statistic is even more important, Reiskytl says: Less than 10% of employers currently offer any type of in-plan lifetime income option.  “What’s the disconnection? As your readers know, it has to do with inertia and the history of fiduciary concern in DC plans,” Reiskytl says. “In my view, the SECURE [Setting Every Community Up for Retirement Enhancement] Act should help lifetime income solutions enter DC plans, but the law won’t completely erase certain challenges.”

In Reiskytl’s opinion, one big challenge and opportunity coming out of the SECURE Act’s passage will be getting the new portability provisions right. “The portability thing is interesting and is more important than perhaps some people have suggested, particularly from the employer perspective,” he explains. “Consider the case in which an employer has selected an annuity provider and keeps that insurance firm’s product on their DC plan menu for some time, say five years. What happens when, down the line, the relationship with that insurer ends? What happens to the participants’ assets? What will be the roles and responsibilities of employers in rolling over those assets to another product?”  Building affordable, effective and portable annuity products that fit the needs of employer-sponsored retirement plans covered by the Employee Retirement Income Security Act (ERISA) will be a significant lift for insurance providers, experts agree.

“For my part, I’m optimistic that the insurer community will find a way—and in fact multiple ways—to rise to this occasion and find solutions that are really attractive to the employer and to the employee,” Reiskytl says. “It is also important to acknowledge that, like with any emerging product class, there will be successes and failures. Some providers may change or drop out or consolidate. It’s going to be very dynamic, with a fair amount of innovation.”  Reiskytl says stand-alone annuity products may make their way into some plan lineups, but more likely, plans will first investigate the idea of building annuities and lifetime income into a well-understood structure such as a target-date fund (TDF) or perhaps a risk-based fund.  “Overall, I expect we will see sizable demand for lifetime income products in DC plans because of the SECURE Act and the market pressures caused by the Baby Boomer generation entering retirement with more DC plan assets,” he adds. “It’s a potentially very large demand and an incredible opportunity if we do this right.”

Moving forward, Reiskytl concludes, it will be very important for those in the industry to be precise in their discussions of annuities and lifetime income.  “We want to be careful to define terms properly,” Reiskytl says, adding with a laugh that he is a former actuary. “For example, what do we mean by ‘annuitization’? Strictly speaking, that term implies the use of an insured lifetime income solution—meaning it has a guarantee purchased in exchange for money. Some of the solutions we see come into the market might not actually involve annuitization as such in order to be a part of the ‘lifetime income’ discussion.”  Other points that should be clarified for clients are the differences between annuity types—particularly between immediate and deferred annuities, and between single life annuities and joint/survivor products. John Manganaro, Planadviser, March 19, 2020.

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