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Existing Rules Outdated

In his remarks at AARP, Obama called the rules governing retirement investments written over 40 years ago “outdated,” filled with “legal loopholes,” and just “fine print,” needing an overhaul.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

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Paula Deen and Forgiveness

Published in the Pawtucket Times, June 28, 2013

This week nobody could escape the 24 hour news cycle reporting how American Celebrity Chef, Paula Deen, a product of her Southern upbringing, admitted that she had spoken a racially charged “N-word” decades ago. Once the dust settles, the nation will get to see if one of Savannah, Georgia’s most prominent residents can rehabilitate herself. Will she personally and professionally survive the swift backlash of the racial slur-controversy, or will the pubic respond to her tearful pleas for forgiveness and give her one last chance for redemption?

The Ugly “N-Word”

Deen now joins actors Mil Gibson, Charlie Sheen, Michael Richards (a.k.a., Kramer), reality TV stars, Dog the Bounty Hunter and hotel heiress Paris Hilton, along with musicians John Lennon and Yoko Ono, Jennifer Lopez, John Mayers, Eminem, even radio show host Dr. Laura Schlessinger who all stirred up the public’s wrath by uttering the “N-word.”

The 66-year-old former Food Network host, restaurateur, writer of cook books, actress and Emmy Award winning television personality, now suddenly finds her career unraveling, like many who have used the racially charged “N-word,” one of the most offensive words in the English language, a word that invokes ugly racial stereotypes.

The media reporting details of a May 17 deposition, resulting from a $1.2 million lawsuit filed by a former restaurant manager at the Uncle Bubba’s Oyster House, a Savannah, Georgia-based restaurant owned by Deen and her brother, created a public firestorm over her use of a very ugly word. Deen stated that she had used the “N-word” at times, decades ago, even detailing her plans to dress waiters at a 2007 wedding as slaves, “wearing long sleeve white shirts, black shorts and black bow ties.”

The Food Network quickly responded to news reports about announcing the dropping of her show, “Paula’s Home Cooking,” then announcing Deen’s contract would not be renewed next month. Later the Smithfield Foods, Inc., retail giant Wal-Mart, and Caesars Entertainment followed suit, severing ties with Paula Deen Entertainment.

Many of her business partners and sponsors, including Shopping Network CVC, which sells a line of her cookware, and Random House, publisher of her cook books, are monitoring the situation closely to determine their actions.

Trying to take control of an issue spiraling out of control, a teary Deen created two YouTube apology videos to offer her mea culpa for using racial slurs last week, also making a 13-minute appearance on Today with Matt Lauer on June 16 to address this controversy.

Public relations experts give mixed reviews as to how effective she was in reducing the negative impact on her brand and celebrity image using racial slurs. Deen’s salvation may well rest on the public’s short attention span and their desire to forgive, say the experts.

Circling the Wagons

Although Deen can not shake the financial impact of being politically incorrect, her fans are rallying behind her.

This week, thousands of irate Deen’s fans are rallying to support her by leaving their comments on the Food Network’s Face book page, to support the besieged celebrity chef, saying that the network moved too fast to oust her, even overreacting. Many viewed her sacking as political correctness run amuck, calling for her to be given a pass for the use of the “N-word.”

Just two days ago, a newly created “We Support Paula Deen” Face book page already has 418,452 Likes, with many loyal fan comments urging Deen’s sponsors to give her a second chance. Many noted that people make mistakes in life and who hasn’t told an inappropriate or off-color joke or used inappropriate words in private or with family.

Also, according to The Associated Press, civil rights leader Rev. Jesse Jackson has agreed to help Deen try to make amends for her past use of the “N-word,” saying she shouldn’t become a “sacrificial lamb” over the issue of racial intolerance. Dean had called him to seek his guidance as to how to recover, noted the news wire.

Bravo for Rev. Jackson, who says in this press report that if Deen is willing to acknowledge mistakes and make changes, “she should be reclaimed rather than destroyed.”

The Baptist minister who was a candidate for the Democratic presidential nomination in 1984 and 1988 and served as a shadow U.S. Senator for the District of Columbia from 1991 to 1997 says he’s more troubled by racial disparities in jobs, lending, health care, business opportunities and the criminal justice system.

Anne Rice, author of gothic fiction and Christian literature and erotic, best known for her popular and influential series of novels The Vampire Chronicles, joins Rev. Jackson in defending Deen.

On her Face Book Page, Rice says what is happening to Deen is “unjust,” comparing it to a “High Tech Execution,” a witch hunt and public burning that is a “horrible thing to witness.”

Furthermore, best-selling author, Rice, who has written 33 books, all novels except one personal memoir, quips, “It is all too easy to ‘hate’ a witch and join in the “fun” of a public execution, and to feel smug and superior and righteous for doing it. And that is what we are seeing now with Paula Deen. Pure ugliness. This is the very opposite of respect for the dignity of all persons.”

Finally, liberal Bill Maher even goes to bat for Deen on Real Time with Bill Maher in a recent episode on HBO.

The Power of Forgiveness

For those, like Deen, who have made terrible mistakes through their misjudgments and use of inappropriate slur words (like the “N-word”) many rarely survive the backlash of political correctness, even when they plead for forgiveness, as their lives are destroyed.

Deen’s racial controversy can positively impact our society by allowing more dialogue about and to confront both personal and institutional racism. Rather then allowing a single mistake to ruin a person’s life, give the individual an opportunity to take responsibility and learn from their inappropriate behavior and actions. Give them a second chance. What a great celebrity spokesperson Deen could become to bring the races together.

It is so important for individuals to learn to forgive their family and friends who have hurt or disappointed them. So, too must a society do this. Former South African President Nelson Mandela is an international role model as to how forgiveness can become the perfect way to way to heal the nation’s racist tendencies. At press time, the former President remains in critical condition in a hospital in Pretoria, South Africa, kept on life support, where he is being treated for a lung infection.

Writer Simon Kent, in a June 10, 2013 post on the Toronto Sun’s web site, states that the frail 94-year-old leader’s legacy to the world is teaching us “forgiveness.”

When Mandela’s National African party won the election that would end apartheid in South Africa, he forgave his white political foes, says Kent, noting that the power of forgiveness kept the black majority ruling party from seeking revenge.

Kent said: “He didn’t hate the political system that had barred him from voting.

Mandela didn’t hate the rest of the world that for years had turned its back on non-white South Africans.”

Mandela just “offered mercy both to his tormentors and his foes and urged fellow South Africans to do the same” added Kent. Yes, forgiveness.

According to Kent, at his 1994 inauguration, Prisoner 46664 — Nelson Mandela — had kept a seat set aside for a very special guest he wanted to witness his swearing-in as President, the highest office in the land. This person, one of his former jailers from Robben Island, where he was held for 18 years of hard labor, he said.

If Mandela can easily forgive his former jailor and a white society that kept his black brothers and sisters enslaved for centuries, why can’t we just forgive Paula Deen, for saying the “N-word” decades ago. Simply put, it just seems like the right thing to do.

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