Building Wealth on the Foundation of Employment Portfolio Series

[Excerpt] The vision of the U.S. Department of Labor (USDOL) is to advance the economic futures of workers, including those with disabilities. The unique mission of the Office of Disability Employment Policy (ODEP) within USDOL is to promote the involvement, cooperation, and collaboration of multiple federal, state, and local agencies with the private sector, to increase participation of individuals with disabilities in the workforce and economic mainstream. No single program, policy, funding stream, or strategy is a universal solution for the multiple challenges encountered by individuals with disabilities who want become economically self-sufficient. Yet, across the federal government, there are tools and strategies now being implemented to help lift low-income wage earners—including individuals with disabilities—out of poverty and empower them through employment and expanded economic opportunities. This portfolio series introduces asset development concepts, tools, and activities that individuals with disabilities, their families, and the workforce development professionals who support them can use to build wealth on the foundation of successful employment

Nordic welfare financiers made global portfolio investors : institutional change in pension fund governance in Sweden and Finland

Pension funds have lately emerged as an essential field of study in various disciplines within social sciences. Political economists, economic geographers and some social policy researchers have studied the role of pension funds very broadly for instance in context of labour market relations, economic development and financial systems. Yet comparative studies in social and public policy have for long studied pension funding mostly in respect to its role in pension systems and reforms, and to the effects of investment returns to the development of retirement income benefits. Whereas the comparative studies have mostly focused on the savings and ‘liability side’ (e.g. pension benefits) of pension funds, in this paper, we conduct a comparative analysis on the politics of ‘the asset side’. It is argued that the economic and social consequences of the usage of pension capital need to be understood as intrinsic parts of pension regimes that cannot be left outside classification of these regimes in social sciences. Our comparative analysis studies the historical regulative institutional development paths of pension fund investment governance in Finnish (TEL/TyEL) and Swedish (ATP/AP, PPM) first pillar, second tier pension systems. The time period of the analysis is from the establishment of these systems in late 1950s and early 1960s to the recent reforms of last few years. Both systems have developed so that the role of financier of national economy has decreased and the role of more global portfolio investor increased over time. We argue, however, that there have been very significant differences between the institutional development paths leading to the new investor roles. The Swedish model has included more paradigmatic qualitative changes in the whole pension regime whereas the changes in Finnish pension fund governance have been rather parametric and quantitative. The financial crisis of 2007–08 has also illustrated some essential differences between the current systems

Intraportfolio Litigation Essay

The modern trend is for investors to diversify. Shareholders who own one S&P 500 firm tend to own many of the others as well. This trend casts doubt on the traditional compensation and deterrence rationales for legal rules that hold corporations liable for the acts of their agents. Today, when A Corp sues B Corp (for breach of contract, theft of trade secrets, or any other legal wrong), many of the same shareholders own both the plaintiff and the defendant. For these shareholders, damages just shift money from one pocket to another, minus of course lawyer fees. We offer here a new rationale for corporate liability in such cases of “intraportfolio litigation.” Although corporae managers are typically rewarded for maximizing firm profits, what shareholders really care about is overall portfolio value. Firm-on-firm lawsuits can reduce principal-agent conflict by assigning intraportfolio costs to the managers responsible for them. Firm-specific financial data thus become a better tool for diversified shareholders to use in motivating and evaluating managers. Not all intraportfolio litigation can be justified on informational grounds, however. For example, securities fraud class actions against corporations lack informational value because the damages awards overstate the intraportfolio harm. Our theory thus provides lawmakers with a framework for distinguishing between value-creating and value-destroying lawsuits among diversified shareholders

The major supervisory initiatives post-FDICIA: Are they based on the goals of PCA? Should they be?

The prompt corrective action provisions in FDICIA 1991 provide the supervisors with an unambiguous goal: "to resolve the problems of insured depository institutions at the least possible long-term cost to the deposit insurance fund." Yet performance of the regulators in achieving this goal has been lacking in that substantial losses continue to be imposed on the insurance funds when banks fail. Is PCA misguided, or are there incentive defects in the law and how the requirements are being administered? This paper analyzes these issues in the context of recent proposals to reform the deposit insurance system.Federal Deposit Insurance Corporation Improvement Act of 1991 ; Financial institutions ; Deposit insurance ; Bank supervision

A goal-oriented requirements modelling language for enterprise architecture

Methods for enterprise architecture, such as TOGAF, acknowledge the importance of requirements engineering in the development of enterprise architectures. Modelling support is needed to specify, document, communicate and reason about goals and requirements. Current modelling techniques for enterprise architecture focus on the products, services, processes and applications of an enterprise. In addition, techniques may be provided to describe structured requirements lists and use cases. Little support is available however for modelling the underlying motivation of enterprise architectures in terms of stakeholder concerns and the high-level goals that address these concerns. This paper describes a language that supports the modelling of this motivation. The definition of the language is based on existing work on high-level goal and requirements modelling and is aligned with an existing standard for enterprise modelling: the ArchiMate language. Furthermore, the paper illustrates how enterprise architecture can benefit from analysis techniques in the requirements domain

Regulating private pension funds’ structure, performance and investments: cross-country evidence

A number of countries have introduced individual, privately managed defined-contribution accounts, where the value of the pension benefit will depend on accumulated contributions and investment returns. These schemes expose workers’ future pension benefits to a number of different risks. To try to mitigate these risks, reforming governments have often strictly regulated the pension fund management industry’s structure, performance, and asset allocation. Structural regulations often force workers to choose only one manager and one fund. So, workers are unable to diversify investments across funds, exposing them to aberrant behaviour by fund managers, and preventing portfolio adjustments according to the individual’s age, household characteristics, career profile and attitude to risk. Strict asset-allocation rules and relative performance criteria mean that pension funds often invest and perform almost identically, removing any substantive choice for workers over the allocation of their pension fund’s assets and the portfolio’s risk and returns. Concentration in the pension fund management industry is found to be higher in the new pension systems of Latin America and Eastern Europe than in most OECD countries. Concentration might be because the new pension markets are smaller than in countries with more established funded pension systems, but it could also be because of restrictions on industry structure. In Latin America, asset allocation and performance is nearly identical across pension funds. So-called ‘herding’ behaviour is almost a defining characteristics of these pension regimes. Again, this reflects, at least in part, asset allocation restrictions and strict performance regulation. There is also evidence that pension funds have often under-performed simple portfolios composed of market indices of stocks and bonds. All the rules imposed in the new systems of Latin American and Eastern Europe seem to be more stringent than in the OECD, with one exception: portfolio limits. Some OECD countries have a tighter investment regime than countries such as Argentina, Chile, Colombia, Peru and Poland. But OECD countries tend to have fewer barriers to entry and impose fewer constraints on performance than Latin American and Eastern European countries

The Center for Medicare and Medicaid Innovation: Activity on Many Fronts

Provides an overview of the Innovation Center's organization, differences from CMS's traditional demonstration authority, payment and delivery reform initiatives, and first-year efforts to solicit and promote new ideas and collaborate with other payers

Cool Response: The SEC & Corporate Climate Change Reporting

Climate change and its regulation pose significant risks and opportunities to investors and corporations. The nearly 30 billion in insured losses from Hurricane Sandy alone dramatically underscore this reality. New climate-related federal and state regulations in recent years also present risks and opportunities to companies in the electric power, coal, oil & gas,transportation and insurance sectors. Investors seek greater transparency and disclosure on the business risks of climate change as a means to protect and increase shareholder value.The key regulator that leads federal efforts to provide investors with information about corporaterisks and opportunities is the U.S. Securities and Exchange Commission (SEC). At the heart of the SEC's mission is the protection of investors through meaningful corporate reporting:The laws and rules that govern the securities industry in the United States derive from a simpleand straightforward concept: all investors, whether large institutions or private individuals,should have access to certain basic facts about an investment prior to buying it, and so longas they hold it. To achieve this, the SEC requires public companies to disclose meaningfu lfinancial and other information to the public. Only through the steady flow of timely,comprehensive, and accurate information can people make sound investment decisions. The SEC recognized the financial impacts of climate change when it issued Interpretive Guidance on climate disclosure in February 2010, responding to over 100 institutional investors representing 7 trillion who supported the Guidance. The Guidance outlines expectations from companies in reporting on "material" regulatory, physical, and indirect risks and opportunities related to climate change.This report examines the state of such corporate reporting and associated SEC comment letters on climate change. It also provides recommendations for the SEC and companies on improving the quality of reporting. The report examines (1) the state of S&P 500 reporting onclimate disclosure and (2) SEC comment letters addressing climate disclosure from 2010 to the end of 2013

Private Equity and the SEC after Dodd-Frank

A new report by Senior Economist Eileen Appelbaum of the Center for Economic and Policy Research (CEPR) shows just how much the recnt SEC investigations of private equity funds has revealed and why it remains important to continue to regulate the industry. The report reviews the widespread practices in the industry that have unfairly enriched some private equity firms at the expense of pension funds and other investors in their funds