Diversions December 24, 2009

Are You in a State of Happiness?

Sunny states topped the list of happy places to live in the U.S., according to the latest research.

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New research published in the journal Science found that southern states—including Louisiana, Hawaii, Florida, Tennessee, Arizona, and Mississippi—have the happiest people.

The researchers at the U.K.’s University of Warwick and Hamilton College in the U.S. compared measurements of peoples’ self-declared happiness levels to measurements of life satisfaction (based on factors such as weather; environment; commuting time; violent crime; student-teacher ratio; local taxes; local spending on education and highways; and cost of living).

Interestingly, the researchers said they found a very close correlation between people’s subjective life-satisfaction scores and objectively estimated quality of life.

“We wanted to study whether people’s feelings of satisfaction with their own lives are reliable, that is, whether they match up to reality—of sunshine hours, congestion, air quality, etc—in their own state. And they do match,” said the lead researcher, Professor Andrew Oswald from the University of Warwick, in a release of the results. “When human beings give you an answer on a numerical scale about how satisfied they are with their lives, it is best to pay attention. Their answers are reliable.”

Despite its sunshine, California ranked number 46 on the list, and New York ranked dead last. Why are states that attract so many newcomers so low on the list? Well, their popularity has something to do with it.

As Oswald explained, many people think states like New York and California are wonderful places to live. The problem is, if too many people think that way, they move to the states and bump up the congestion and the housing prices. “In a way, it is like the stock market. If everyone thinks it would be great to buy stock X, that stock is generally already overvalued. Bargains in life are usually found outside the spotlight. It may be that exactly the same is true of the best places to live,” Oswald said.

See the next page for a full ranking of states.

Ranking of happiness levels by U.S. state (including the District of Columbia):

   1. Louisiana
   2. Hawaii
   3. Florida
   4. Tennessee
   5. Arizona
   6. Mississippi
   7. Montana
   8. South Carolina
   9. Alabama
  10. Maine
  11. Alaska
  12. North Carolina
  13. Wyoming
  14. Idaho
  15. South Dakota
  16. Texas
  17. Arkansas
  18. Vermont
  19. Georgia
  20. Oklahoma
  21. Colorado
  22. Delaware
  23. Utah
  24. New Mexico
  25. North Dakota
  26. Minnesota
  27. New Hampshire
  28. Virginia
  29. Wisconsin
  30. Oregon
  31. Iowa
  32. Kansas
  33. Nebraska
  34. West Virginia
  35. Kentucky
  36. Washington
  37. District of Columbia
  38. Missouri
  39. Nevada
  40. Maryland
  41. Pennsylvania
  42. Rhode Island
  43. Massachusetts
  44. Ohio
  45. Illinois
  46. California
  47. Indiana
  48. Michigan
  49. New Jersey
  50. Connecticut
  51. New York

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Compliance December 23, 2009

House Bill Would Change Non-Discrimination Rules

A bill has been introduced in the U.S. House that would change how qualified retirement plans perform non-discrimination testing.

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The Retirement Fairness Act of 2009 (H.R. 4126) provides that:

  • Non-highly compensated employees who work part-time or don’t work a full year would be counted only as a fraction of a full-time employee for purposes of non-discrimination testing;
  • The testing would take into account only vested benefits of non-highly compensated employees, but all benefits of highly compensated employees; and
  • Cross testing would not be allowed, and for cash balance plans, accrued benefits calculated as the balance of a hypothetical account (or substantially similar accruals) shall be treated as contributions.


Generally, defined contribution (DC) plans are tested on the amounts put into participants’ accounts, while defined benefit (DB) plans are tested on the annuity payable at normal retirement age for each participant. However, the current nondiscrimination rules allow cross-testing (testing a DC plan based on the normal retirement benefit that the allocation would support) or testing a DB plan based on the present value of the normal retirement benefit. With cross testing, a DC plan sponsor could provide higher contributions for increased service or age.

The Retirement Fairness Act of 2009 would allow the Treasury Department or Internal Revenue Service (IRS) to prescribe regulations allowing exceptions to the prohibition on cross testing, with certain conditions.

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