Economist: America’s Retirement System Is Failing Us

Your "golden years" may not be so golden.

The majority of Americans (75 percent) nearing retirement age had less than $30,000 in their retirement accounts in 2010. For the poorest Americans in the 50-to-64-age bracket, the average amount saved for retirement was $16,034.

The lack of nest egg savings could become an acute crisis in the U.S. and should force a reexamination of the nation's retirement system, says Teresa Ghilarducci, a professor of economics at The New School.

In a recent New York Times Op-Ed, Ghilarducci argues that the current retirement savings model has failed middle-class Americans. The "do-it-yourself" pension system — aka 401(k) plans — that replaced traditional pension packages 30 years ago mistakenly assumed that individuals without investment experience could "reap the same results as professional investors and money managers," she writes.

In an interview with The Daily Ticker, she says individuals "were asked to do what they really couldn't do. Not because they're irresponsible, not because they didn't plan well, not because they didn't have enough financial literacy. That system asked humans to do what they just can't do — anticipate the future."

The savings accrued by the majority of middle class seniors will not support their current standard of living, Ghilarducci says. Americans should save at least 8 times their annual income to maintain their living standards (she strongly recommends increasing that number to 20 times if possible). For those earning $100,000 a year at the time of retirement, at least $2 million or more would be needed.

Unfortunately most Americans are ill-equipped for retirement and she estimates that 49 percent of middle-class workers will live on a food budget of less than $5 a day — poverty-like conditions.

Americans can no longer lean on social security checks or late retirements as safety nets Ghilarducci notes. Social Security and other entitlement programs have been under attack in Congress. A growing number of lawmakers from both sides of the isle support reducing or curtailing government spending on these 77-year old institutions as means to lower the national deficit. Workers over the age of 55 have a harder time finding employment than younger workers and when they do find work it's usually a big wage cut or reduced hours. According to the Labor Department, 6.2 percent of Americans over the age of 55 were unemployed in July and 50 percent of that group had been out of work for six months or more.

Saving for retirement has become especially hard for many Americans who are struggling to pay everyday expenses. That's why Ghilarducci wants to reform Americans' approach to retirement. She advocates instituting mandatory retirement accounts for all Americans. These would be professionally managed with a guaranteed rate return and annuity payment. This mandated account would be a supplement — not a replacement — to Social Security and other private retirement accounts.

"People need to save a lot more," she says. "Social security is a base but it's not enough. I'm just advocating that people save more."

Posted on The Daily Ticker, August 6, 2012.  See original article here.  

Individual Retirement Accounts (IRA’s): What You Need to Know

There are two basic types of Individual Retirement Accounts (IRA) for you to save for retirement through - Traditional and Roth. I will break out both, explaining the features of each, as well as the advantages and disadvantages of them both as well. Note that this is a basic overview of both.  I will not go into every detail of the two plans; I will just highlight the main points, as well as their advantages and disadvantages.

Traditional IRA

A Traditional IRA is a tax-deferred account for saving for retirement. Tax-deferred means that you pay no tax on the money before you invest it in the account. The money grows tax-deferred until you withdrawal it in retirement. At this point, you pay tax on the money.

Advantages

• Tax-deductible contributions: if you meet certain requirements, you can deduct the contribution you make in the year you make it from your income tax.
• Paying less taxes: it is assumed you will be in a lower income tax bracket in retirement versus when you are working. So by paying the taxes when you are in retirement, you will pay less because you earn less.

Disadvantages

• At age 70 ½, you are required to take money out of the account each year, regardless if you need it or not. This is known as the Required Minimum Distribution (RMD).
• Early Withdrawal Penalty: if you withdrawal money before age 59 ½, you will have to pay a 10% penalty to the IRS in addition to he regular income tax.

Roth IRA

A Roth IRA is a tax-free account for saving for retirement. Tax-free means that the money in the account grows tax-free until retirement when you withdrawal it. When you do, you do not pay tax as you already have. The catch is that you pay tax on the money before you invest it in the Roth IRA. (To clear up any confusion, you aren’t getting taxed by investing in a Roth. The money you invest must be earned income (salary). It gets taxed there, not when it gets invested.)

Advantages

• You pay taxes now. You will not have to worry about taxes being higher when you withdrawal the money.

• No RMD. With a Roth IRA, you don’t have to worry about turning 70 ½ and being forced to take money out of the account. You can choose to never touch it if you would like and pass it on to an heir after you pass away.

• No penalty if distributing contributions: At any time, you can take out the amount you deposited into the Roth without facing a penalty. So, if you deposited $1,000 into your Roth and need $500, you can take out the $500 and not have to deal with any IRS penalties.

• Non-taxable distributions: You can withdrawal money from the Roth IRA, $10,000, for first-time homebuyers, without having to worry about early distribution penalties.

Disadvantages

• Income limits: You can only contribute to a Roth IRA as long as you meet the income eligibility limits.

• Taxes: Depending on future tax rates, you could end up being in a higher tax bracket when you make your contributions than you will be in when you withdrawal the money.

• Legislation: There is no guarantee that the money that grows in your Roth will always be tax-free. Congress could change the law at any time.

For 2012, both Traditional and Roth IRA owners can contribute up to $5,000 in their account ($6,000 if you are 55 or older.)

For many, the Roth IRA is the way to go. This is because you lose the tax deduction of the Traditional IRA contribution if you are covered by an employer’s retirement plan (401(k)), or earn too much money. For which plan benefits you the most, be sure to sit down and discuss it with your tax accountant.

Posted on February 16, 2012 by moneysmartguides.com.  See original article here. 

For information on how to use a self-directed IRA to purchase a Dental Support Plus franchise, visit www.theirainstitute.com.   

5 IRA Timing Rules That Can Derail Your Retirement

Get familiar with IRA dates, ages — or risk your savings

Owning an IRA is one thing. Knowing the rules about IRAs is entirely different. And not knowing those rules can cost you dearly.

“IRAs are extremely complicated and it’s relatively easy for the average IRA account owner, and their financial adviser for that matter, to make simple, but very costly mistakes,” said Jeffery Levine, an IRA technical consultant with Ed Slott and Company.

IRA account owners need to be aware of all sorts of different dates, ages and “clocks.” When it comes to IRAs, timing is everything. 

“Unfortunately though, the tax code isn’t exactly friendly when it comes to timing issues,” Levine wrote in the current issue of Ed Slott’s IRA Advisor newsletter.

Here’s a look at the five timing issues with which, according to Levine, advisers and IRA account owners seem to have the most problems.

1. The age-55 penalty exception

In general, unless an exception applies, IRA owners must wait until they are 59½ to withdraw IRA funds without penalty (the 10% early distribution penalty). The age 59½ rule is based on the IRA owner’s actual age and not the year in which a client turns 59½, Levine wrote.

One exception is “the age-55 exception.” Participants in workplace retirement plans who separate from service in the year in which they turn 55 or older can take a distribution from their company retirement plan without having to pay the 10% early withdrawal penalty. They must pay income tax on the distribution, but they do not owe the 10% additional tax that the Internal Revenue Code imposes on most withdrawals before age 59½.

For the purpose of this rule, the applicable year is a calendar year in which a person turns 55, and not 365 days. 

Of note, this age-55 exception only applies to company retirement plans and not to IRAs, even if plan funds that would have otherwise met the age-55 exception are rolled over to an IRA, Levine wrote. So if you want to avoid the 10% penalty, take the money before rolling it into an IRA.

Trying to make sense of all this? Don’t bother. In a recent court case, a judge ruled against an IRA account owner who quit his job, rolled the money from his company retirement plan into an IRA, and then took a distribution from the IRA without paying the 10% penalty. The IRA account owner argued that he didn’t owe the 10% penalty; the judge ruled otherwise.

“Why should it matter that the money went from the [worker’s company] plan to an IRA before being withdrawn?” the judge wrote in his decision. 

“The answer is that the Internal Revenue Code says that it matters…Many parts of the tax code are compromises, and all parts reflect the need for lines that can’t be deduced from first principles,” the judge said. “Why can an employee withdraw money from an employer’s plan without the 10% addition at age 55 but not age 54? Why does the 10% additional tax apply to withdrawals at age 59 and 181 days, but not 59 and 183 days? These questions cannot be answered by logical analysis. The [Internal Revenue] Code’s lines are arbitrary.” 

2. The five-year rule for 72(t) payments

According to Levine, 72(t) payments — also known as SEPPs or SOSEPPs for “series of substantially equal periodic payments” — are distributions from an IRA that allow owners under 59½ to access money penalty free. With a 72(t), you take equal distributions from your IRA for five or more years or until you reach 59½.

But the 72(t) schedules can be doubly confusing since there are two separate time frames to keep track of.

“In order to successfully complete a 72(t) payment schedule and avoid back penalties and interest, the schedule must continue for the longer of five years or until the [IRA account owner] reaches 59½,” Levine wrote. 

For this rule, the age 59½ requirement is the IRA account owner’s actual 59½ birthday, he said. The five-year requirement is a full five years from the time the first 72(t) payment is distributed.

3. The five-year rule for Roth IRA conversions

On paper, Roth IRAs are relatively easy. In reality, not so much. Case in point: According to Levine, many advisers and Roth IRA account owners struggle to figure out what is taxable and what might be subject to penalties with distributions from a Roth IRA.

“Given the fact that there are actually two separate Roth IRA five-year rules, it’s not too difficult to understand why,” Levine said.

For instance, one five-year rule applies only to Roth IRA conversions. Under this five-year rule, Levine wrote, penalty-free distributions of Roth conversions may be made at the account owner’s actual attainment of age 59½ or after five full years, whichever is sooner. A separate five-year period is established for each conversion. 

The actual attainment of age 59½ is pretty straightforward. But what makes this rule a little tricky is the five full years requirement. 

For instance, one might think that if a conversion is completed on May 10, 2012, the five full years would be up on May 10, 2017. “But if one thought like that, one would be wrong,” Levine said. 

“The subtle wrinkle that throws many account owners and advisers off is that while the five years must indeed be five full years, you don’t begin counting on the date the conversion is completed. Instead, the starting date for the five years — when the five-year clock begins to tick — is January 1 of the year the funds are deposited in the Roth IRA.” 

As a result, he said, “even though a separate five-year period applies to each Roth conversion, multiple conversions made in the same calendar year have a common clock since they share the same January 1 start date.”

4. Five-year rule for Roth IRA qualified distributions

The beauty of Roth IRAs is this: Qualified distributions are tax- and penalty-free. The key to whether a distribution is qualified or not is this: The distribution must be made five full years after an account owner establishes his first Roth IRA, and either the account owner is age 59½, or disabled, deceased (the account is inherited by a beneficiary), or the distribution is for the first-time purchase of a home. 

Here again, attainment of age 59½ is the account owner’s actual age 59½. “But to be a qualified distribution that’s only half the equation,” Levine wrote. “The account owner must also complete the five-year requirement. Remember, this five-year rule is a different five-year rule than the five-year rule for conversions, although they do share some similar aspects.” 

There are several key differences. “One difference is that the five-year clock for qualified distributions can, in some cases, begin to tick on January 1 of the year before the first dollars are actually contributed to a Roth IRA,” Levine wrote.

How can that be, you might ask. “A contribution to a Roth IRA will start the Roth qualified distribution clock ticking on January 1 of the year the contribution is made for, which is not necessarily the year the contribution is made in,” wrote Levine. That’s because Roth contributions can be made up until April 15 of the year after the calendar year it is being made for, he wrote.

Another important difference between the two rules is that the five-year rule for qualified distributions carries over to all future Roth IRA accounts. “Separate clocks are not needed,” wrote Levine.

5. The timing of non-spouse beneficiary RMDs

In general, a non-spouse beneficiary must begin taking required minimum distributions or RMDs by Dec. 31 of the year following the year of the IRA account owner’s death, said Levine. 

“However, when an IRA owner dies after reaching their required beginning date and has not taken their RMD for the year, the beneficiary or beneficiaries must take what would have been the IRA account owner’s RMD by Dec. 31 of the year of death, not the year following the year of death,” said Levine.

Resources

There are many other IRA timing issues about which you should be concerned. There’s the age 70½ rule for RMDs for IRAs, the age 70½ rule for qualified charitable distributions, and the once-per year IRA rollover rule to name but a few. The key to avoiding penalties is getting a handle on these rules well before making any decisions about your IRA.

When it comes to learning about these IRA timing rules, your resources are, sadly, few and far between. One website, IRAhelp.com, is operated by Slott’s company. That website has a directory of advisers who have received training about IRA distribution rules.

Books include An IRA Owner's Manual by Jim Blankenship and Life & Death Planning for Retirement Benefits 7th Ed. 2011 by Natalie B. Choate.

Of course, there’s always the IRS’s website, which offers IRS Publication 590, among other resources. Read Publication 590. 

After that, our best advice is this: You’d be ill-advised to make any IRA moves without being 100% certain that your timing is perfect. 

Robert Powell is editor of Retirement Weekly, published by MarketWatch. Robert Powell has been a journalist covering personal finance issues for more than 20 years, writing and editing for publications such as The Wall Street Journal, the Financial Times, and Mutual Fund Market News.  Read original article here. 

For information on how to purchase a franchise using funds from a self-directed IRA, go to the website for The IRA Institute here.  

 

 

Study finds link between contraceptive and periodontitis

An injectable contraceptive administered every three months may be putting women who opt for this method at increased risk for periodontal disease, according to a new study in the Journal of Peridontology.

Depot medroxyprogesterone acetate (DMPA) is a progestin-only, injectable contraceptive that is most often seen under the brand name Depo-Provera, marketed by Pfizer.
It has been suggested that progestins may have an inflammatory component and/or stimulate the synthesis of prostaglandins, which is why the extended use of DMPA may be associated with a higher risk of periodontal diseases, according to the study authors.

"There are many hormonal contraceptive options out there for women to prevent or delay pregnancy, yet we have little information on how they may affect women's oral health," lead author Susan Taichman, RDH, MPH, PhD, assistant professor at the University of Michigan School of Dentistry, said in an interview with DrBicuspid.com.  Information regarding the pill and gingival inflammation is mixed, she added, with some studies showing an association and others not.

"There remains some controversy over the impact of new, low-dose oral contraceptives and periodontal diseases," she said. "We previously reported in an analysis of National Health and Nutrition Examination Survey (NHANES) data that low-dose oral contraceptives had no significant association with decreased periodontal health."

Economic status plays a role

In the current JOP study, Taichman and her co-authors found that although women of all socioeconomic backgrounds and ages use DMPA, roughly twice as many blacks and one-third Hispanics and Latinas use it as compared with whites. In addition, the majority of DMPA users are women of low socioeconomic status who are already at risk for increased levels of gingival disease, they noted.

“Women ... who use this method of birth control may be at a higher risk for gingivitis” says Susan Taichman, RDH, MPH, PhD.  "Given that DMPA use is common among high-risk women, it is important to learn more about potential deleterious effects on periodontal tissues," the researchers wrote.

The study authors collected the data from the 1999-2004 NHANES, a set of cross-sectional studies designed to obtain information on the health and nutritional status of the non-institutionalized population of the U.S.

They looked at 4,460 U.S. women between 15 and 44 who were asked about their use of DMPA. In the final sample, 4% were current DMPA users while 12 % indicated a past history of DMPA use.  In addition, they included data on the women's periodontal health, which was assessed using randomly assigned half-mouths (one upper and one lower quadrant) for each individual using a periodontal probe.

The authors also took into account sociodemographic and behavioral factors, which have been shown to be associated with DMPA use, they noted.  They found significant differences in pocket depths, gingival bleeding, and CA loss between DMPA users and non users. The prevalence of gingivitis was 53.9% for women who reported having used DMPA, compared to 46.1% for never having used DMPA.

DMPA use was associated with an increased risk of gingivitis and periodontitis after adjusting for age, race, education, poverty income ratio, dental care utilization, and smoking status, the researchers noted.

More research needed

The study findings suggest that DMPA use may be associated with periodontal disease, they concluded.  "Although many women of child-bearing age use DMPA, a large portion of DMPA users are young, non-white women of low socioeconomic status with a history of smoking, and thus may be at an already increased risk for periodontal diseases," explained Taichman.

"Women and adolescents who use this method of birth control may be at a higher risk for gingivitis and periodontitis," she said. "Dentists should encourage women who use DMPA contraceptives to maintain good oral health habits and seek regular dental examinations."
Future clinical studies that also look at oral health behaviors and duration of DMPA use are required to further understand the relationship between DMPA use and the incidence of periodontal health, she and her co-authors concluded.

Excerpt of article by Rabia Mughal, Contributing Editor of drbicuspid.com.  See original article here.

Franchise lending shortfall robbing the nation of jobs, economic output

For information about a franchise that can be purchased with IRA funds rather than a small business loan, see the notes at the bottom of this post.  

Lenders continue to fall shy of the overall loan volume sought by franchise business owners, a shortfall that’s holding back the recovery by choking job creation and economic production.

New lending to franchises will total $9.5 billion this year, according to new data released by the International Franchise Association. While that’s up slightly from 2011, it falls well short of the $11.72 billion those franchise owners will seek in loans over the course of 2012.

“As a result of demand for more business units, there has been an increase in demand for new loans,” IFA Educational Foundation President John Reynolds said at the 2nd Small Business Lending Summit in Washington on Tuesday. “But unfortunately, lending hasn’t kept pace with the demand from franchise businesses.”

During a time when the economic recovery is still struggling to gather momentum, that 18.6 percent gap in loan demand and loan supply will rob the economy of an estimated 94,000 new jobs and $12.9 billion in gross domestic output in 2012, experts said. Contributing to the shortfall are factors like tighter credit standards, heightened regulatory scrutiny and uncertainty surrounding the tax code, according to the report, which was conducted by the the IFA in partnership with FRANdata.

The gap draws a distinction between the credit challenges facing franchises and those facing small businesses as a whole. Recently, an overwhelming majority (92 percent) of small firm owners reported either no problems securing loans or no need for a loan in response to a study published by the National Federation of Independent Business. Those findings were backed up in a recent Wells Fargo/Gallup survey, which showed that the number of small employers who believe credit will be hard to come by this year is on the decline.

“In the competition for limited credit, franchise businesses must prove credit worthiness by showing strong unit economics and system performance,” IFA President Steve Caldeira said in a statement. “With a still slow, uneven and sluggish economic recovery, coupled with a stricter regulatory environment as a result of Dodd-Frank, the pressure to maintain and create jobs has never been greater for franchisees, franchisors and the overall small business community.”

When they do manage to get their hands on the capital they need, franchise owners have proven themselves effective job creators. SBA Administrator Karen Mills, who also spoke at the summit on Tuesday, pointed to research that showed franchises create roughly 34 new jobs for every $1 million they receive in new loans. 

“Two thousand franchises, 825,000 franchise units and 18 million people that you employ,” Mills said. “This is a real constant job creator, and it’s a great business model, an American business model. It’s really one of our competitive assets around the world.”

On the bright side, the overall health of the franchise industry appears to be improving and the gap between loans sought and loans acquired is growing smaller rather than larger. A year ago, lenders fell 19.6 percent short of franchise loan demand, and the year before, they missed the mark by 22.8 percent. Moreover, the IFA estimates nearly 36,000 new franchise units will be financed this year.

Hoping to accelerate that growth, the IFA on Tuesday announced an expanded partnership with the Financial Services Roundtable and the Consumer Bankers Association. The consortium has asked members of the administration and lawmakers in Congress to sit down with their respective members to address the current regulatory and lending hurdles facing franchises, small businesses and lending institutions.

Article by J.D. Harrison, posted April 18, 2012 on www.washingpost.com.  See original article here.

You can purchase a Dental Support Plus Franchise unit for only $25,000, using funds from an IRA.  For more information on Dental Support Plus Franchise, please visit our website.   

For information on how to purchase a franchise with funds from a self-directed IRA, visit www.theirainstitute.com. 

Economic Health of the Franchise Industry is Stronger Compared to a Year Ago

A new economic index that provides a current reading of the economic health of the franchise sector -The Franchise Business Index (FBI) - increased 0.3 percent in February to 107.7 (Jan 2000=100) - the sixth consecutive monthly gain, the International Franchise Association announced today. The index was up 1.4 percent compared with February 2011.

Designed to provide more consistent and timely tracking of the growing role of franchise businesses in the U.S. economy, the index was developed by IHS Global Insight on behalf of the IFA. The FBI combines indicators of growth in the industries where franchising is most prevalent and measures of the general economic environment for franchising.

"The franchise industry is a unique business sector and a vitally important contributor to the U.S. economy spanning some 300 lines of business, supporting nearly 18 million jobs, 825,000 establishments and providing for over $2.1 trillion in economic output," said IFA President & CEO Steve Caldeira. "Measuring the strength of the franchise industry through the Franchise Business Index provides another indicator of the health of the economy as a whole. While the index shows we are moving in the right direction, more certainty in the tax and regulatory environments would help franchise businesses grow faster, creating more jobs and economic output at the local, state and national levels."

Following a period of flat to declining values in mid-2011, the FBI turned up in September and has shown increases of 0.3 percent in three of the last five months.

Increases among the components of the index tied to the labor market and small business optimism contributed most to the February gain in the FBI. An improvement in consumer demand, which had been flat at the end of last year, gave a small boost to the index. Credit conditions showed no change in February.
IFA also released an update to its 2012 economic outlook prepared by IHS Global Insight in December 2011. The updated forecast shows little change from the initial forecast.

"Since our December 2011 forecast report was prepared, there have been a number of positive economic releases," said James Gillula, managing director at IHS Global Insight. "However, negative factors that could restrain an economic rebound remain."

The revised forecast indicates that the number of franchise establishments in the United States will increase by 1.6 percent in 2012, down slightly from the original forecast of 1.9 percent. Employment and economic output growth forecasts are unchanged at 2.1 percent and 5 percent respectively.
IFA plans to update the Franchise Business Economic Outlook on a quarterly basis beginning in 2012 instead of just an annual outlook.

Index, Jan 2000 = 100

Source: IHS Global Insight, March 2012

About The IFA Franchise Business Index
The Franchise Business Index is a measure of the economic environment for franchise business activity constructed with timely economic indicators that provide a current reading of the industry's health. It combines indicators of the growth or decline of industries where franchise activity has historically been concentrated with measures of the demand for franchise business services and the general business environment.

The components of the IFA Franchise Business Index for the U.S. include:

• Employment in Franchise-intensive Industries* (BLS) 
• Number of Self Employed* (BLS) 
• Unemployment Rate* (BLS) 
• Consumer Demand in Franchise-Intensive Services* (BEA) 
• Small Business Optimism Index* (NFIB) 
• Small Business Credit Conditions Index* (NFIB) 

Research for the IFA Franchise Business Index and the quarterly forecast reports is underwritten by a generous grant from Jani-King International to the IFA Educational Foundation.

*For more information about the components and the methodology, click here.

March 22, 2012 – International Franchise Organization, www.franchise.org  

See original article here:  

For information about Dental Support Plus Franchise, please visit our website.

Will the JOBS Act help small business?

JOBS Act clears Senate, back to House for final passage

A bipartisan effort to make it easier for smaller businesses to access investment cash was back on track after clearing the Senate, but not without grave warnings from opponents who insisted it would open the door to a new era of fraud.

Senators added a provision that would bolster investor protections on the emerging practice of crowd-funding – soliciting pools of investors online and from social media. The bill passed overwhelmingly, 73-26, but broader efforts to amend it had been turned back by GOP-led opposition.

President Obama has given the measure qualified support, and it now returns to the House where GOP leaders expect swift passage, sending it to the White House next week as a rare bipartisan victory.

“We are heartened by the important investor protections added to the crowdfunding provision and will be vigilant in monitoring this and other elements to ensure the overall bill achieves its goal of helping entrepreneurs while maintaining protections for investors,” said Jay Carney, the White House Press Secretary, in urging Congress to quickly finish the bill.

Both Republicans and Democrats want to show voters they are working to improve the nation’s unemployment rate, with the GOP particularly characterizing the Jumpstart Our Business Start-ups, or JOBS Act, as legislation that would help smaller companies expand and create jobs.

“The bipartisan JOBS Act will cut through Washington red tape and help these small businesses and startups grow, expand and create jobs right away,” said the bill’s champion, Majority Leader Eric Cantor (R-Va.), who had dismissed as “phantom investor protection issues” the Senate’s efforts to change the bill to address concerns from AARP, federal regulators and others that weakening regulations could lead to fraud.

Passage in the Senate came after a tumultuous week that splintered Democrats, whose leaders were reluctant to halt a bill that had broad political support, including from powerful investment banking interests. Only 23 lawmakers had voted against the earlier version of the bill this month in the House.

The JOBS Act aims to help smaller businesses attract investment capital by loosening federal regulations, some stemming from the Sarbanes-Oxley Act of 2002, that supporters of the bill say can be onerous and costly.

One provision in the legislation would make it easier for businesses launch initial public offerings by phasing financial reporting requirements with the Securities and Exchange Commission over five years or until the company achieves more than $1 billion in annual revenues. The SEC chief said this exemption was too broad, and would allow even large firms to bypass federal regulation.

“We will rue the day we rammed this through the House and Senate,” said Sen. Richard Durbin of Illinois, the No. 2 Democrat, who broke with party leadership in voting against the bill.

Senators did, however, find bipartisan support attach an amendment that would require crowd-funding websites, which can pool up to $1 million in investments by selling stock online, to use register with the SEC.

The change would also require disclosure by investment promoters as a way to prevent anonymous “pump-and-dump” operations, and it would cap the annual amount individuals can invest.

That amendment was a bipartisan effort from Sen. Jeff Merkley (D-Ore.), Michael Bennet (D-Colo.) of Colorado and Sen. Scott Brown (R-Ma.), is expected to remain when the House considers the bill next week.

But even Merkley voted against the final product, calling it a “paved highway to predatory scams.”

March 2, 2012

By Lisa Mascaro, L.A. Times

See original online story here. 

 

For information about Dental Support Plus Franchise, please visit our website.