Diversions August 27, 2015

How Far an Apple Can Fall from the Tree

How much will a child’s economic situation diverge from that of his parents’?
Reported by

Children raised in families that are far apart on the income ladder can expect markedly different economic futures, finds a new study from The Pew Charitable Trusts. Children born into lower-income families have very different futures than those from higher-income households, according to “Economic Mobility in the U.S.”

Kids from families at the top 90th percentile, for example, can expect their own family income to be three times more than those raised in the lowest 10th percentile. Over recent decades, surveyors note, the rising income and wealth of affluent parents have allowed them to increase investments in their children, from day care through college. At the same time, wages have stagnated for most workers and low-income families have struggled to pay for routine expenses.

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Parental income matters more for men’s earnings than for women’s. Although both men and women benefit from being born into higher-income families, men benefit much more—at least when it comes to their own earnings.

Among the report’s key findings:

  • Approximately half of parental income advantages are passed on to children.
  • The persistence of advantage is especially large among those raised in the middle to upper reaches of the income distribution.
  • Parental income matters more for women’s chances of marriage, and of marrying better-off partners.
Compliance August 26, 2015

Whistleblowers Remedied Following ERISA Challenge

The DOL says officials at Cement Masons Southern California Trust Funds illegally retaliated against a whistleblower who flagged ERISA violations.
Reported by

Three whistleblowers will receive $630,000 in lost wages and damages following accusations of impropriety at a Southern California fund company.

According to the Department of Labor (DOL), as director of the Cement Masons Southern California Trust Funds’ audit and collections department, Cheryle Robbins spoke up when she believed a trustee was breaking federal law protecting the firm’s retirement and benefit plans.

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Robbins later cooperated with federal investigators examining the firm’s management of its retirement plans, and the board of trustees responded by placing Robbins on administrative leave. Next, according to the DOL, when the company outsourced Robbins’ department to a third-party administrator, Robbins was the only employee not retained by the new employer. 

This resulted in the U.S. District Court for the Central District of California ordering 12 trustees of the Los Angeles-based firm and its service provider, Zenith American Solutions, to pay $630,000 in lost wages and damages to Robbins and her co-workers, Cory Rice and Louise Bansmer. The pair “supported Robbins’ whistleblowing efforts,” according to the DOL.

Assistant Secretary of Labor for Employee Benefits Security Phyllis Borzi commented directly on the enforcement collection.

“There are no good stories about retirement savings crimes, but this case was particularly galling because three people were all punished for doing the right thing,” Borzi says. “Robbins, Rice and Bansmer suffered serious financial consequences because they stood up for what was right. This resolution ensures that they’ll finally get the compensation they deserve.”

Prior to her termination, Robbins complained internally that Scott Brain, a trustee and business manager for Cement Masons Local Union 600, was violating the federal Employee Retirement Income Security Act (ERISA). In 2011, she cooperated with a federal criminal investigation into Brain’s activities. Upon learning of her cooperation, the joint board of trustees voted to place Robbins on administrative leave, until such time that her department was outsourced.

Rice and Bansmer were also allegedly fired because of their participation in Robbins’ internal whistle-blowing activities or because they refused to cease communicating with her after she was placed on leave.  

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