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News of interest to ARCRA members

  • 05/07/2017 5:24 PM | Anonymous member (Administrator)

    by Al Rettig

    You've probably seen the words "fiduciary rule" in the news and may have wondered what all the fuss is about. Answer: it's about us--America's retirees and future retirees--and the investment advice we're counting on to keep our nest eggs safe and growing.

    A fiduciary is a person who is bound to act for another's benefit. Sounds simple, but in the world of finance it can be complicated. Those of us with retirement savings in IRAs, 403(b)s, 401(k)s and other tax-sheltered accounts have usually selected these investments on the advice of someone. Maybe it was a stockbroker at one of the well known brokerage houses; maybe it was a banker; or maybe it was an independent financial advisor. We assume that all these people are acting in our interest when they recommend an investment. But are they?

    Again, it's complicated. In the money management world true fiduciaries are legally pledged to act in your best interest and can be held to a very high standard in this regard. For example, if they recommend investments that are unsuitable for you, or that carry very high sales charges compared to similar investments, you have the right to take them to task, and even take them to court. On the other hand, money managers who are not fiduciaries are only pledged to recommend investments that are "roughly suitable" for you. They are free to steer you to funds that will pay them high commissions or that might not be the absolute best for you. And they're not required to consider the widest choice of investment options in making their recommendations. In other words, their loyalties can be conflicted. Yes, of course they want happy customers, but they often have their own financial interest in mind as well when they suggest an investment.

    After eight years of development, a new "Fiduciary Duty Rule," was originally set to take effect on April 10. To be administered by the Labor Department, the rule says that anyone who sells tax-deferred retirement accounts must meet the standard of a fiduciary, recommending investments that are in solely in the client's best interest. Predictably, everyone from Wall Street to the banks to the Chamber of Commerce hates this rule and has lobbied hard to scuttle it. They claim the rule would be unduly burdensome on them and would cost too much to implement. The current administration seems to agree, and a February executive order demanded the rule be completely reviewed before implementation. But such a review has proven difficult, in part because the original nominee for Secretary of Labor withdrew from consideration and it took until late April for a new candidate, Alexander Acosta, to win Senate approval. Many top positions at the Labor Department remain vacant. Nevertheless, on May 24 Acosta announced that the rule will take effect on June 9. He said that after careful review, the Labor Department has “found no principled legal basis [for further delay] while we seek public input,” and that “respect for the rule of law leads us to the conclusion that this date cannot be postponed.”

    However, Acosta also said that even though the rule will take effect in early June it will not be enforced until the new year, and that public comments will continue to be reviewed as the executive order demanded. This means that while the rule will technically be in force as of June 9, its future is still uncertain.

    So where does that leave us? It leaves us where we've always been: deciding whether to insist that our financial advisors adhere to fiduciary standards is completely up to us. With or without a new rule we're free to choose the people who manage our money. If you don't know whether your banker, broker or advisor operates as a fiduciary, just ask. They're required to tell you. Typically, bankers and representatives at your neighborhood stock brokerage branch are not fiduciaries, while independent financial advisors often are. That's because independent advisors are generally compensated by fees you pay directly to them, plus they're not under pressure to sell investments in which their company has a direct interest. And because independent advisors are usually fee-based, they're much more likely to work with you closely to choose investments for your 401(k) and 403(b) accounts, even though they typically won't receive commissions from them.

    Does this mean that bankers and brokers are "bad" and that independent advisors are "good?" No, not at all. Many investment managers who are not fiduciaries do a fine job for their clients, recommending perfectly appropriate investments. But understanding the fiduciary relationship--or the absence of it--is a crucial part of financial literacy. It is important to know precisely where your interests stand vis a vis your advisor's interests, and to ask lots of questions if you notice that you're paying very high fees for your funds or that your advisor is recommending frequent changes to your portfolio. These can be red flags. No matter who manages our money the key thing to remember is that we are buying, they are selling, and we must conduct ourselves accordingly.

  • 04/14/2017 9:40 AM | Anonymous member (Administrator)

    by David Therkelsen, Immediate Past President, Chair of the Nominations and Advocacy & Education Committee

    One of the Retiree Association’s most vital benefits may also be its least visible.

    We advocate on behalf of retirees. We advocate especially with the senior leadership of American Red Cross. We meet annually with President and CEO Gail McGovern, and we have more frequent interactions with those who make decisions about pension and health care benefits, and who are in charge of the systems we depend on, such as the Benefits Service Center. We make sure that when decisions are made on any of these topics, the interests of Red Cross retirees are represented.

    Advocacy goes both ways. We also convey the viewpoints of American Red Cross to our members. We don’t do so mindlessly. We are separate from American Red Cross, and protect our independence. From time to time we will disagree with ARC. But most of us know from our own experience as employees, that most of the time Red Cross does the right thing for the right reasons. Especially when Red Cross finds itself in controversy, we make sure our members know the Red Cross side of the story.  And not just because we support the mission of the American Red Cross and our former co-workers, but also because a strong American Red Cross can better support its retirees!

    Another area of high importance is educating out members about any topic that matters to retired people – health care, tax planning, money-saving opportunities, and more.

    We’ve been at this in an organized fashion for a while. But in this and future issues of our eNewsletter we’ll have an “In Your Corner” column that especially calls out our advocacy or educational activities.

    By the way, we have an energetic committee doing this work. But we could use a couple more members. If you’d like to be part of this effort, send a note to our administrator, Christie Phillips (admin@arcretireeassoc.org) and we’ll take it from there.

  • 04/14/2017 9:29 AM | Anonymous member (Administrator)

    If you haven’t signed up to PerkSpot you are missing out on discounts made available through Red Cross.  Some are “Red Cross Exclusives” and other discounts change frequently.  A weekly email provides a listing of all the new discount options.  So, depending on what you are looking for you might find a great deal on exactly what you need.  Follow the instructions below to set up your account.

    • Google “PerkSpot” or enter www.perkspot.com in your browser
    • Choose “Log-In”
    • Choose “Create an Account”
    • Don’t have an Account? Search for and select “American Red Cross”
    • Create your account by providing email address and creating a password
    • Provide profile information
    • Recommend selecting “Subscribe to Weekly Perks”.
  • 02/24/2017 10:41 AM | Deleted user

    Tax time is fast approaching.  In addition to talking with your tax preparer and finanancial planner, there are a variety of free tax information and tax preparation resources available including:

    AARP Foundation Online Tax FAQs Check the online list of frequently asked tax questions.  You can also submit questions that will be answered by IRS certified volunteers.

    AARP Foundation Tax-Aide  The nation's largest volunteer-run tax assistance and preparation service available to taxpayers with low and moderate income, with special attention to those age 60 and older.

    IRS: Free Tax Return Preparation for You by Volunteers  The IRS Volunteer Income Tax Assistance Program (VITA) and the Tax Counseling for the Elderly (TCE) Programs offer free tax help for taxpayers who qualify.

    IRS: Seniors & Retirees  Tips for Seniors in Preparing their Taxes. Check here for tips on common pitfalls for seniors to watch for when preparing their individual tax returns.

  • 02/24/2017 10:34 AM | Deleted user

    By Jim Bowling

    If you are the beneficiary of a Red Cross retiree who passes away, what steps should you take?   

    To ensure that your beneficiary is prepared when you pass away Jim Bowling, long-time ARCRA member and leader, who lives in the St. Louis area, put together this checklist:

      1. Contact the Red Cross Service Center at 1-877-860-7526 to report the retiree’s death. Have on hand the retiree’s full name, date of birth and last four digits of social security number. You will be assigned an Advocate to help assist with the process, answer any questions and the transitioning of any remaining benefits; pension, medical, dental and life insurance, if applicable.
      2. Once the Red Cross has this information, they will notify the various Red Cross insurance carriers.
      3. In addition to Red Cross, you need to contact holders of other assets: banks; bonds, stocks and certificates of deposit; other dividend income; IRAs.
      4. Make a complete list of these items, with account numbers, and name and phone numbers of individuals who manage these accounts.
      5. Property in your name, including real estate and vehicles, should also be on the list.
      6. If there are burial policies and a guardian has been appointed, notify them.
      7. Notify your financial adviser and lawyer.

      Note: First things first…for any of us, it’s a good idea to put these lists of assets, accounts, property, and contact information  together ourselves, while we are living, and make sure to give copies to our beneficiaries, personal representatives or executors, and financial advisers.  Also keep a copy of Red Cross Service Center information with your other financial papers.

      You will find this information and other helpful resources on the new retiree resources page on the web site.  You can access the page by clicking here.

    1. 02/21/2017 10:37 AM | Deleted user

      by Jenelle Eli

      To ARCRA members: Jenelle Eli, of American Red Cross International Services, spent more than three weeks on an International Federation vessel, that was transporting immigrants out of Libya. We encourage your attention to Ms. Eli's article and accompanying photos; they are especially compelling in light of current controversies surrounding immigration.

      What I heard in the middle of the Mediterranean in the middle of the night


      Post by Jenelle Eli,American Red Cross, aboard the Responder on behalf of the International Federation of Red Cross and Red Crescent Societies

      Migrants don’t launch off the Libyan coast during the day. It’s more like midnight. When the waves are low and winds are gentle, smugglers crowd 100,

      Over the next hours, the moon dominates. Silence. Then, panic. This isn’t what any of them envisioned when they left Nigeria, Bangladesh, Syria, Mali. Some people will end up dying in the Mediterranean Sea (more than 3,600 so far this year). Others will be rescued. For the crew aboard the Responder rescue vessel — where I just lived for three and a half weeks — every hope and fear of the passengers is illuminated by a single search light. Once safely aboard the Responder, here are some of the things they told me: 200, 300 souls into wooden boats or rubber dinghies. Due north.

      "We are the lucky ones."

      There’s no dependable estimate for how many migrants perish in the Sahara Desert on their way to the Libyan coast, but that crossing may be even more dangerous than the Mediterranean. Many told me of starvation, dehydration, violence, and sexual assault in the desert. Once in Libya, nearly everyone I spoke with had been kidnapped and their families extorted for money. It’s practically a miracle they made it to the Libyan coast alive.

      Read the full article by clicking here:

    2. 02/21/2017 10:30 AM | Deleted user

      by Michael Carroll, President

      ARCRA President Michael Carroll convened the ARCRA via conference call on January 25, 2017.  The meeting began with the welcoming new Directors Ann Byrnes, Jack Campbell, Carolyn Kean and Armond Mascelli. We also welcomed Phil Hansen to the board.  He will serve as Field Unit Manager, keeping the board abreast of Red Cross activities.

      Carroll conveyed his optimism that in 2017 ARCRA will continue to grow, become more efficient, and, most importantly, enhance the benefits that we provide to our members.

      Board Activities:

      The Board approved the 2017 budget as presented by Treasurer Jack Campbell and membership initiatives aimed at current and prospective members proposed by Membership Chair Jim Hamilton.

      Reports were received from key committee chairs including Bob Howard(Communications), Dave Therkelsen(Advocacy and Education), and Judy Hull(Technology).

      Stan Robertswill report on his efforts to promote volunteering by ARCRA members with the ARC at the April meeting; Programs and Services ChairArmond Mascelliwill also report on his committee’s review of theRetiree Connectionhotline and other programs/services we offer to members.

      It is our goal to share important information about committee activities in the monthly eNewsletters and on the ARCRA website.

    3. 01/19/2017 10:24 PM | Anonymous member (Administrator)

      from ARCRA Advocacy and Education Committee

      Here are two recent articles about Medicare. The first, from the New York Times, points out that some nursing homes are, inappropriately, denying Medicare benefits because individuals are not "improving." The second, from AARP, is a comprehensive discussion of the potential effects on current Medicare recipients as the new Congress and Administration begin to act on their stated intention to repeal the Affordable Care Act. By way of disclaimer, AARP is, of course, an advocacy organization, and ARCRA does not endorse their positions. or those of any other entity. But we do recommend the article to you for its thorough coverage of what could happen in the months and years ahead.

      http://www.nytimes.com/2016/09/13/health/medicare-coverage-denial-improvement.html?emc=edit_th_20160913&nl=todaysheadlines&nlid=26245797&_r=0

      http://www.aarp.org/content/dam/aarp/health/medicare_insurance/2016/12/download-why-medicare-matters.pdf


    4. 01/17/2017 11:46 PM | Anonymous member (Administrator)

      By Betty Wagner

      Retiree Connection volunteers offer important services to Red Cross retirees. They help renew relationships or contacts with former Red Cross colleagues, help take advantage of services and products and other benefits, and advocate in negotiating the system and resolving retirement-related problems.

      Formed about 12 years ago by a small group of retirees from Southern and Northern California, Oregon and Washington State, the Retiree Connection has developed and expanded.

      Today, while every so often a “connection” is requested, most of the work done by the volunteer group manning the phone messages is related to information and referral for retiree benefits, untangling frustrating breakdowns in communication about these benefits, and once in a while, assisting an elderly retiree through a confusing time in their lives.  As the years have passed, problems related to working through electronic tools such as websites, emails, etc., have lessened as our retiree population becomes more used to dealing with these tools. In addition an excellent ARCRA website is becoming more and more used by the retirees.  But there are still occasional issues that we are called upon to address, and retirees who still aren’t skilled at these electronic tools.

      Retiree Connection volunteers have added some tasks, one of which is to pick up the ARCRA office calls and handle those that fall into our area of expertise, passing on the others to our ARCRA Administrator.  This hasn’t added a large load to the weekly duty, and Retiree Connection volunteers are happy to be able to help out.

      Now, the Retiree Connection is looking into other ways to add services to our retiree population, such as doing mini surveys and forging better partnerships with local Red Cross chapters and area offices.  The Retiree Connection looks at extending the volunteer team from the original San Francisco Bay Area team to a more nationwide group. Meanwhile, the group of six Retiree Connection volunteers, including two from the original group, chaired by Helen DuBois, continues to take the messages left from our fellow retirees, lending them a hand with their problems and concerns. You can reach a Retiree Connection volunteer by calling 1-800-738-2724.

    5. 12/10/2016 4:51 PM | Anonymous member (Administrator)
      by Al Rettig

      The 1954 Broadway musical comedy The Pajama Game centers around labor strife at the Sleep-Tite pajama factory. When the new contract brings a raise of only seven and a half cents an hour, the rank and file are enraged. At the height of their fury, naturally they break into song:

                  Seven and a half cents doesn't buy a hell of a lot;

                  Seven and a half cents doesn't mean a thing.

       But then somebody does the math and realizes that even small increases are meaningful in the long run. Within a few years the tiny raise will turn into folding money:

                  That's enough for me to get

                  An automatic washing machine,

                  A year's supply of gasoline,

                  Carpeting for the living room,

                  A vacuum instead of a blasted broom,

                  Not to mention a forty inch television set!

      Truth in Advertising I: Seven and a half cents in 1954 translates to about seventy cents today, representing a cumulative inflation rate of almost 800%. A lesson in itself.

      Truth in Advertising II: If there were 40 inch television sets in 1954, we don't remember them. 21 inches was pretty much the big screen standard in the mid-century living room. On the other hand, today's models commonly exceed 60 inches with some systems topping 100 inches. That's another form of inflation!

      The Pajama Game paid tribute to the value of money over time. And it's a good perspective to keep in mind as we think about our Red Cross defined benefit pensions--our "pension plan." Sometimes we hear retirees grumble that, to paraphrase the song, a 1% increase doesn't buy a hell of a lot. In the short term that's true. The few extra dollars each month can seem like those seven and a half cents back in 1954. But just like at the pajama plant, there's more to the story. Consider:

      • For most retirees, the Red Cross defined benefit pension has increased by 1% a year every January like clockwork, and we can reasonably hope this practice will continue. By contrast, the increase to our Social Security benefit for 2017 is 0.3%, there was no increase at all in 2016 and in 2015 the increase was 1.7%. Over these three consecutive years Red Cross pension increases add up to 3% while Social Security's come to just 2%. Will this always be the case? Certainly not. Interest rates are likely to rise, and with them inflation will creep upward (moderately, we hope). When that happens, Social Security annual increases, which are based on inflation, will exceed our 1%. But the point here is balance. We see that in times of low inflation our 1% per year can exceed the increases from Social Security. When inflation climbs, Social Security payments will too, and higher interest rates will mean more opportunities for other forms of saving to grow more aggressively. Again, the key factor over time is balance.
      • Our life expectancies are increasing, and those 1% annual jumps look a lot more significant when they're compounded over 20 years--or many more!
      • We are fortunate to have a defined benefit plan. Only a small minority of retirees still has one. The defined contribution plans like 401(k)s that the Red Cross and most other employers have adopted for new hires can work very well, but they only deliver full value when the employee is both a disciplined saver and a knowledgeable investor. It's up to workers and retirees to manage these plans themselves, and they often make serious and sometimes catastrophic mistakes, including contributing too little, balancing their portfolios poorly and withdrawing too much too soon. By contrast, defined benefit plans like ours feature professionally managed portfolios and regular payouts. And remember, we were never required to contribute a penny into the plan during our working years.

      With all that said, should we rely on the combination of Social Security and our Red Cross pension to meet our retirement needs? The answer is no. Recall the "lesson of the three-legged stool" from those pre-retirement seminars. Financial independence, they said, will flow from three sources: your pension, your Social Security, and your personal savings and investments. And they were right.

      If you find that you've neglected that "third leg" over the years, is it too late to do something about it in retirement? Maybe not. For many retirees there are prudent strategies available to generate additional income. The key to finding them is a good, unbiased financial planner who is willing to assume a fiduciary role.

      But that's a subject for another article.

    Go to News Archive for past eNewsletters and print Newsletters

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