The mission of the American Retirees Education Foundation is to research, educate and inform retirees, future retirees and the general public on how best to protect and promote retirement income security and retiree health care. The Foundation will develop and advocate policy recommendations based on its research findings to relevant constituency groups, the media, the general public, and Federal and state policymakers.
AREF Mission Is Not…
we're not allowed to lobby members of Congress, their staffs or Congressional Committees. The bottom line is that the AREF is not allowed to lobby for passage of legislation or regulations.
AREF Is A Tax-Exempt Organization
The Internal Revenue Service (IRS) has approved the American Retirees Education Foundation (AREF) as a tax-exempt organization that is eligible to receive tax-deductible charitable donations. Click here to access the IRS website for documentation on the AREF’s tax-exempt authorization.
AREF Chairman’s Message
AREF’s First Year of Key Actions
NRLN’s board created the American Retiree Education Foundation (AREF) in 2014 as a 501(c)(3) tax-deductible, nonprofit education foundation to expand the research and educational reach of the NRLN and to enable NRLN to sharpen its focus as an organization lobbying for the passage of federal legislation and regulations that benefit retirees. I am pleased to report to supporters of the NRLN and AREF the first year’s key actions by the AREF.
In mid-May the AREF staff was asked to examine details of a CenturyLink (CTL) company merger of three dissimilar pension plans (CenturyLink Legacy, Embarq and Qwest plans) and the law governing such mergers. This merger in December 2014 combined 81,000 Qwest plan participants from a very well-funded plan with two plans funded in the 73-74% range. Qwest plan members lost hundreds of millions of dollars in asset protection. A similar combination of Chrysler plans was also researched. NRLN association leaders presented the AREF research and proposals (Whitepaper) to the Pension Benefits Guaranty Corporation’s (PBGC) executive staff in July and this month we are scheduled to meet again with PBGC and the Treasury Department. AREF research has made it possible for the NRLN to take action on a serious pension asset dilution problem that results when corporate mergers lead to pension plan mergers.
We met early this year with the Treasury Department and on May 28, I provided testimony to the Department of Labor ERISA Advisory Council based on research and proposals developed by the AREF. We told them that retirees cannot make a lifetime financial decision on a lump sum offer unless they have valid risk information including an honest assessment of the financial health and viability of their pension plan and the plan sponsor company. I urged to the Council to recommend to the DOL that companies making lump sum pension buyout offers be required to make complete disclosures concerning the financial trade-offs and we emphasized that such offers should not be made to already retired people. On July 9, the IRS issued a notice that essentially ended pension plan sponsors making lump sum offers to individuals receiving pension payments. The NRLN wasn’t the only advocate group seeking change, but AREF research made it possible for us to help.
The AREF supported the writing of two position papers used to educate members of Congress during the NRLN Fly-In Oct. 19 – 21. One position paper was devoted to the case for legalizing importation of prescription drugs from Canada. Research noted that one of the biggest financial burdens for America’s seniors today is the skyrocketing cost of prescription drugs. The other position paper was intended to educate lawmakers and their staff members about the harm that will be caused to participants in a number of multiemployer pension plans as the result of Congress’ passage of the Multiemployer Pension Reform Act of 2014 (MPRA) that allows pension plan administrators to cut the monthly fixed income of over 10 million retirees and survivors. MPAR changed 40 years of established ERISA (Employee Retirement Income Security Act of 1974) law. AREF research revealed that only the Multiemployer plan language in ERISA was changed but that it would be a simple task for Congress to enact the exact language affecting troubled (underfunded) single-employer plans. Since 1974, the federal law governing the nation’s private-sector pensions has prohibited cuts to the benefits of workers who have already retired — a precedent that is now endangered.
Bill Kadereit, Chairman and President
American Retirees Education Foundation
Congress Makes Qualified Charitable Distribution (QCD) Permanent
The American Retirees Education Foundation (AREF), created to expand the research and educational reach of the NRLN, welcomed the news that Congress has voted to make the Qualified Charitable Distribution (QCD) permanent. This means that IRA holders age 70-1/2 and older may make direct donations of up to $100,000 annually without first taking taxable withdrawals from their accounts.
QDC has been around since 2006 but always had a “sunset” provision leaving donors uncertain whether the provision would be renewed. Now that QCD has been made permanent donors are free make larger contributions before hitting the maximum tax deduction and carry forward limits.
Donating appreciated stocks could save even more money by being tax-deductible and avoiding capital gains taxes. While making a pre-tax contribution directly from an IRA to a charity can be beneficial, donating appreciated securities to a charity is superior for tax purposes.
The big benefit is keeping donations out of the adjusted gross income reported on your tax return. Higher adjusted gross income could push you into a higher marginal income tax bracket and increase taxes on your Social Security benefit. This is computed using what Social Security calls "combined income" – your adjusted gross income plus tax-exempt interest, plus half of your Social Security benefit.
When an individual's combined income exceeds $25,000 ($32,000 for joint filers), 50 percent of the excess amount is taxed as ordinary income. If an individual's combined income exceeds $34,000 ($44,000 for married couples), 85 percent of the excess amount is taxed as ordinary income.
Higher adjusted gross income can also trigger the high income surcharges on Medicare Part B premiums. The surcharges start at $85,000 in annual modified adjusted gross income for individual filers ($170,000 for joint filers).
This year, the extra premium charges range from $66 up to $285 monthly for the highest-income seniors.
Anything you donate through a QCD also helps satisfy the annual required minimum distributions that must be taken from IRAs starting at age 70-1/2. IRA owners who do not need the distributions for living expenses could avoid generating tax liability by donating that way.
The AREF, a 501(c) (3) tax-deductible, nonprofit education foundation (click here for IRS letter), is hopeful that many of you will take advantage of the QCD being made permanent. Please consider the AREF, P.O. Box 65001, Baltimore, MD 21264-5001 as being worthy of your support to expand the NRLN’s research and educational reach and to enable NRLN to sharpen its focus as an organization lobbying for the passage of federal legislation and regulations that benefit retirees.
Bill Kadereit, Chairman
American Retirees Education Foundation