Accounting education

As we all know from all of the hoopla, there are some 77 million Baby Boomers headed toward retirement. As a result, every facet of corporate pension plans will now be subject to deep analysis and probably change. Keep in mind that the decline in defined benefit plans and the rise in defined contribution plans, along with increased longevity of one’s life, have started to create a growing risk among employees about their retirement benefits. The Conference Board has just issued a report, Pensions and Retirement Conference, which delved into this topic and noted that as retirement benefits are redesigned for today’s retirees, it’s become unclear whether employer programs can support long-term financial security. “The changing definition of retirement raises controversial questions, especially from a societal point of view. What is the responsibility of the corporation to provide a safe and secure retirement for its employees? The evolving social contact between employees and employers has resulted in many issues that plan sponsors, policymakers, and academics need to resolve.” In short, the report is asking employees, who it believes should be seen as consumers, not investors, to take on significant risks that they haven’t a clue on how to manage. For one, the report sees a pension and retirement dilemma. It notes that many experts disagree over whether the new rules for defined benefit plans (see “Pension Protection Act of 2006”) will help stabilize the system or encourage more companies to curtail their plans. Keep in mind that as more companies discontinue their defined benefit plans, they’ll need to change their overall retirement programs so that they work more effectively for employees. You’ve then got a twofold risk here: (1) Employees could outlive their retirement income and experience a significant decline in their standard of living. Many people simply underestimate their life expectancy and overestimate how much money they can draw from savings. (2) Employees are investing more than they should in equities, due in part to the limited options for their defined contribution monies, inflation, and market volatility. Then, you have to take a gander at redefining retirement along with mitigating risk. Remember, today’s aging Baby Boomers are the best educated, healthiest, and longest-living group to ever entire retirement. According to Anna Rappaport, senior fellow on pensions and retirement for the Board, when surveyed, seven out of 10 people in this population say that they want to continue working in retirement. Given these new parameters, she notes that new definitions and innovative employment options must be created for this phase of life. She calls it the “third age.” Finally, she points out that policymakers, employers, and individuals need to rethink how retirement fits into the way people actually live their lives. For further information or to request a copy of the report, e-mail courter@conference-board.org.

Accounting firm Berkowitz Dick Pollack & Brant said its $50,000 contribution would help provide four-year college scholarships for 30 low-income at-risk children in Florida.

Seymour Mann, co-founder of Mann Frankfort Stein & Lipp Advisors, which later became UHY Advisors TX, has died at the age of 87, only a few weeks after announcing his retirement from the firm he co-founded in 1971.

There are a lot of very good research tools on the market. But what's available for the small practitioner who needs less than high-powered products?

The California Society of CPAs said it would begin an educational initiative to help its 31,000 members cope with International Financial Reporting Standards.

When it comes to financial or retirement planning or wealth management, no two clients are even remotely alike. Each comes with a different level of existing investments or retirement plans; each has different life goals and a different appetite for risk.Sorting out these variables in a basic analysis of the client’s position is the first step toward crafting a cohesive and effective plan. Unfortunately, no single software package or tool kit can easily handle the full range of analysis that may be required, so the planner will generally require several different kinds of tools.

AICPA RELEASES ADVISOR GUIDEThe American Institute of CPAs and Fiduciary360 have published the U.S. edition of a handbook for investment advisors. Prudent Practices for Investment Advisors identifies 23 practices for advisors to follow. The book helps them manage risk by providing a recommended “checklist” for carrying out investment decisions with prudence and due diligence. The book was reviewed and edited by the Fiduciary Task Force of the AICPA Personal Financial Planning Executive Committee.

To help mentor African-American accountants in their careers and to prepare them for the CPA Exam, Howard University School of Business's Center for Accounting Education will hold its fourth annual "We're About Success!" conference June 22-27 in Chantilly, Va.

Thomson Tax & Accounting has introduced an estate-planning notebook organizer that accountants can send to their clients as gifts.

The 2008 Moss Adams Financial Performance Study of Advisory Firms has just been launched and the company urges advisors to participate. This annual study provides data and insights to help financial advisors across all business models achieve success. The study coverage includes:

Professor Frank K. Ross retired in December 2003 from KPMG after over 38 years of service. He now runs the Howard University School of Business' Center for Accounting Education, and serves as a visiting professor of accounting at the university.

The Securities and Exchange Commission and the Commodity Futures Trading Commission have put aside their regulatory turf wars and entered into a memorandum of understanding that fosters cooperation between the two enforcement bodies in market oversight and regulation. The agreement includes an information-sharing platform along with guidance for new product reviews - particularly if the products can trade as both a security or a commodity. The first order of business under the joint relationship is notices requesting public comment on two new products --the first is an option that would be traded on options exchanges, and the other is a future that would trade on a single stock futures exchange. The requests for comment will be published in the Federal Register.

The American Institute of CPAs has ramped up its mobility efforts to allow CPAs to practice in other states, with mobility bills enacted now in 12 states and legislation pending in 22 other states.

The Securities and Exchange Commission has issued a report warning public pension funds that they risk violating the anti-fraud provisions of the federal securities laws if they do not have adequate compliance policies in place to prevent wrongdoing.

Australians are considered the world's richest superannuation holders, a report indicates. It says this is because of a very strong domestic currency and the government permitting citizens to drop as much as $1 million tax-free into their retirement savings. Superannuation is a pension scheme in Australia. It has a compulsory element whereby employers are required by law to pay a proportion of an employee's salaries and wages (currently nine percent) into a superannuation fund, which can be accessed when the employee retires After over a decade of compulsory contributions, Australian workers have close to a trillion dollars in superannuation assets with more money invested in managed funds per capita than any other economy. Compulsory superannuation in combination with buoyant economic growth has turned Australia into a 'shareholder society' where most workers are now indirect investors in the stock market. Consequently, a lively personal investment marketplace has developed, and many Australians take an interest in investment topics. According to the AFG Global Fund Management Index, our Aussie friends had an average of $63,794 invested in managed funds at the end of the last financial year. My wife’s cousin read this in the local Sydney paper. In fact, local super funds, on average, outperformed their peers in a top-10 list that included the United States, Canada, and France. To add to this, in the fiscal year that ended June 30, 2007, the amount handled by Australian managed funds grew by 32.4 percent. In comparison to our world, the value of American managed funds climbed by only 8.5 percent to $43,458 while those in Britain rose by 23.2 percent to $17,515. Ross Nayler, who is a principal with AFG Financial Planning, says that clearly the stronger Australian dollar, now trading at around 90 U.S. cents, plus specific laws allowing people to put up to $1 million tax free into their super savings helped make Australia the world leader. "One of the key messages is we've been at the top of the table for quite some time and we're getting further ahead.” In fact, for the period of five years to the second quarter of 2007, Australian managed funds posted a per capita growth rate of 97.7 percent. But now comes the clinker. Another survey, the AMP Superannuation Adequacy Index Report, for January to June of last year, found that 30 percent of Australian workers under the age of 40 would not have enough savings to retire comfortably. Moreover, it found that 3.4 million Australians across all working-age groups were falling behind in preparing for their twilight years. Nayler notes that minimum contribution levels are needed. Macquarie Research Economics expects then that Australian superannuation funds will post less spectacular returns in 2008. It points out that after recording huge gains in the past couple of years on the back of double-digit returns, growth in superannuation funds under management is set to be more subdued this year. Of course, I might add, as my cousin stresses, the absence of the $1 million contribution program is expected to slow down super growth rates in 2008. It may be their lead in superannuation will be dwindling.

The House Subcommittee on Select Revenue Measures held a hearing to examine whether there is a need for a more uniform treatment of various derivative structures.

Fidelity Investments has released a report estimating that a 65-year-old couple retiring in 2008 would need approximately $225,000 to cover their medical costs in retirement, a 4.7 percent increase over the 2007 estimate of $215,000.

Entry-level job Web site CollegeGrad.com named KPMG as the top-ranked employer among the Big Four accounting firms in a poll of the site's users.

The Institute of Internal Auditors has donated a collection of nearly 200 books on auditing to the University of Texas Dallas School of Management.

Accounting firms are using Google text ads this tax season and beyond to bring in clients for tax prep and other types of accounting and financial planning services.