Madoff – Madoff victims ask Congress to recover their funds – Yahoo! India News

Madoff victims ask Congress to recover their funds – Yahoo! India News

Victims of Bernard Madoff's epic scam urged Congress on Wednesday to change laws so that all investors of such frauds will be compensated should they lose their investments.

At a U.S. House of Representatives hearing, Madoff victims described how the imprisoned swindler destroyed their lives and demanded that Congress take action.

“We need your help now,” Jeannene Langford told the House Financial Services subcommittee on capital markets. Langford said the money she had invested with Madoff represented 30 years of her life savings.

A court-appointed trustee is trying to recover assets to repay victims and has so far recovered $1.4 billion in assets — a fraction of the $65 billion prosecutors said was recorded in Madoff's customer accounts.

More than 15,900 customer claims have been submitted to trustee Irving Picard, who has reviewed nearly 3,000 and so far rejected some 1,300.

Madoff victims are frustrated with the slow pace of payouts and the laws that dictate who gets money when a brokerage firm is liquidated. Congress created the Securities Investor Protection Corp, a nonprofit agency, to maintain a fund to help investors who had accounts at failed brokerage firms. The agency can pay a single investor a maximum of $500,000.

Helen Davis, a lawyer representing hundreds of Madoff victims, said her clients were not only hit by a “financial tsunami” when they found out Madoff swindled their money but by a “second tsunami” when SIPC did not replace securities in their accounts up to $500,000.

(Reporting by Rachelle Younglai, editing by Matthew Lewis)

Last month I wrote about various warning signs for Americans to heed if we hope to stave off further economic erosion. Pension Plan shortfalls will begin to place another huge burden on the American taxpayer, many of whom lost their own Pension Plans years ago.

This subject is near and not-so-dear to my s-aging heart even though I am indisputably sorry to add to a burden that comes on the heels of the devastation of the housing market, a failing financial sector, credit freezes, insurance scandals, the weakening commercial real estate and retail markets, greed and corruption (think Madoff and Mozilo) and so forth. But, here are my thoughts nonetheless.

America Aged is based on the premise that pension debts “ruined General Motors, stopped the NYC Subways, bankrupted San Diego, and loom as the next financial crisis.Corporations and the government have made ruinous pension promises to the American workers. We agree that the bill is coming due and it will hit us wave upon wave much like a Tsunami.

Is underfunding the result of personal greed by city officials who conspired with unions and between themselves to cut deal upon deal to shortchange retirement plans for workers? Or was it ignorance or simply mismanagement of funds? Your point of view is your own but the results speak for themselves.

What with the stock market and investments in the tank, how do you – as a taxpayer – feel about footing the bill to keep public-employee pensions fully funded in the coming years? Why do I ask? Because I want you all, public and private sector workforces, to expect a very, very big bill! Trillions….yes, trillions of additional debt looms in the very near-term future IF we don’t act in the best interests of our nation and future generations.

So far, I’ve not seen many headlines that talk about how painful the solutions will be in terms of increased fees or taxes. But, you should know that whether you live in California, Pennsylvania, Colorado or Illinois, Public Sector Employee Retirement Plans add up to an IOU of an estimated $2.73 trillion in pension and benefit payments to retirees over the next 30 years, (source: Pew Center on the States – December 2008). According to Pew, the plans are short “almost 27% ($731 billion) of the amount.” The Government Accountability Office (how’s that for an oxymoron given recent events) chimes in by claiming that only “58% of 65 large state and local pension plans were adequately funded in 2006, down from 90% in 2000.”

All this looms in the near term future for all of us to face including the fewer than 18% of private sector employees that still have pensions of any sort, underfunded or not! As for about 50 million pension-less Americans that must rely on their 401(k) plans, the Boston College Research Center states that in the 12 months following the stock market’s peak in October 2007, “more than $1 trillion worth of stock value held in 401(k)s and other “defined-contribution” plans was wiped out.” If individual retirement accounts, which consist largely of money rolled over from 401(k)’s, are taken into account, about $2 trillion of stock value evaporated. I also remind you that not all State and local Government employees are eligible for Social Security and some are solely dependent upon their pension plans. Others are covered by both public pensions and Social Security; and some are covered by Social Security only. The plot thickens, doesn’t it?

Here’s a snapshot as to how this came about because more than the mishandling of pensions was in play:

Beginning in the late 1980’s, private sector company-specific pension plans were abandoned en masse as people began to change jobs more frequently.

Many older industrial-based companies bit-the-dust, further eroding their pension promises.

Life expectancy has expanded considerably from the middle 60’s to the low 80’s in just over 60 years. Longer life expectancy should have been (and should be) a good thing! Thank, in large part, the Unions for pushing for more benefits without changing the age for which people would become eligible for pensions. Many people are eligible for pensions in their 50’s while they are living into their 80’s and beyond. Does this make any sense at all to you? Well, I suppose it does if what you are looking for is to “get yours.”

Some pension trustees were not trustworthy (hard as this may be for you to believe).

Look out, because the federal insurer is caught in the maelstrom. Does this sound like a familiar tune? Who will bail them out? One guess only, please.

And, lest you think that all the desperate private sector employees can move into remaining pension-rich jobs in the public sector once public sector retirees have hit the links (ah, will golf myths never die?), think again. Not only are most people not qualified for these jobs but, as the economy struggles, many of these opportunities will be withdrawn.

What does all of this have to do with the American Workplace?

One thing the private sector can do now to help our economy, and to offset the pain of higher taxes, is to offer development opportunities to all employees in order for their firms to remain competitive and for people to remain qualified as contributing members of our challenged society.

One thing the public sector can do now to help our economy is to address the under-funded pension plans now and find solutions for the future.

The solution is NOT to stick our collective heads in the sand or to print more money!

Return of the Boomers is a Must Read Book for solution-oriented organizations’ leaders. The book makes the case that it is an economic necessity for the Boomers to work later in life and it recommends actions to ensure mature workers continue to contribute to America’s ability to compete.

About The Author

AgelessInAmerica was developed by Carleen MacKay and Brad Taft, nationally recognized career management consultants and co-author of books, articles, newsletters and multi-media training materials. Widely known across the nation, on stage, in print and by America’s smallest to largest firms and the maturing population themselves, Brad and Carleen inspire individuals and organizational leaders to understand and utilize the competitive advantages an experienced workforce offers the American workplace.

http://www.agelessinamerica.com

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