Why myRa Is Not The Way To Save For Retirement [Fortune/CNN Money]

President Obama’s proposal is well intentioned but may not get workers to save more. A better plan: Automatically enroll workers to an IRA.

President Obama recently proposed to help more workers save for retirement through an executive order creating the myRA. The plan is being billed as the ROTH IRA for every man or woman with neither access to a 401(k) plan at their workplace nor the lump-sum deposit to open an IRA on their own.

Though well-intentioned, this isn’t the best way to encourage workers to save more – it’s just a politically easier route.  A better way is to automatically enroll workers with a retirement plan through payroll deductions and give them the option to opt out. Congress has considered such a plan for years, but it has never gone anywhere and it’s tough to see how things could turn around given the partisan bikering we’ve seen in Washington.

Nonetheless, an automatic Individual Retirement Account (IRA) is worth re-evaluating as the president makes his pitch for myRa. Half of America’s full-time employees, about 75 million, are not offered any type of retirement plan at work (except for Social Security).  Although many work at small firms with fewer than 10 employees, some work at larger firms. Over 20% of American employers with 100 or more employees — mainly in agricultural, construction and retail sectors –do not offer any type of retirement plan at work…

Read the full article at Fortune.com…

The ins and outs of managing up and down [MIT Sloan innovation@work Blog]

Managing Your Team:

“To be an effective boss,” says Pozen, “you need to set up a system that enables both you and your employees to get meaningful work done. At the core of this system is the successful implementation of ownership.”

Pozen encourages the principal of “Owning Your Own Space,” whereby all employees of a large company view themselves as owners of a small business. This approach builds entrepreneurial spirit among your team and sets everyone up to succeed—including you.

Here are five steps to effectively implementing ownership:

  1. Set project goals. At the start of a new project, clearly communicate your goals and constraints—but let your employees establish the time frames for milestones. They will be more committed to meeting deadlines if they have a role in setting them.
  2. Establish accurate metrics. Reach an explicit agreement on quantitative and qualitative criteria that will guide your team’s work. Choosing the right metrics will also help you have a deeper discussion with your team about what you really consider important about the project.
  3. Supply needed resources. Make sure your team has the funds, head count, and equipment needed to get the project done. Also, be ready to help your “lieutenants” win battles with other parts of the organization. Leverage your authority to help them.
  4. Monitor without suffocating. You may be micromanaging, even if you think you’re not. Monitor the project in a supportive way by offering suggestions and revising goals and metrics as necessary, but be clear that they are free to achieve the revised goals in the way they think is best.
  5. Tolerate mistakes. Be quick to forgive employees if they make a well-intentioned error. Create an environment where employees can talk openly about mistakes and learn from them. Whatever you do, don’t humiliate them. According to research, half of all humiliated employees intentionally decreased their productivity in reaction to their boss’s actions.

Read the full article at MIT Innovations@Work…

A Better Path to Corporate Tax Reform [Wall Street Journal]

A 17% levy on foreign profits of U.S. companies to help finance a 5% rate reduction.

Last week Oregon Sen. Ron Wyden became the chairman of the Senate Finance Committee. Even as a liberal Democrat, he has supported two key goals of corporate tax reform: reducing the U.S. corporate tax rate and repatriating corporate profits held abroad. Sen. Wyden’s challenge will be implementing these goals without increasing the federal debt.

Though there is widespread support for reducing the 35% statutory corporate tax rate, which ranks among the highest in the world, the reduction cannot be financed by the plan President Obama touted in his State of the Union address: closing tax “loopholes.” Congress would have to find $1.2 trillion in new tax revenue over the next 10 years to fund a 10% rate reduction. But politicians can realistically repeal only $200 billion in tax loopholes, including the favorable tax treatment of corporate jets, incentive fees and drilling costs.

That’s because tax preferences are popular. Most of the major existing preferences are intended to promote economic growth, so they are supported by both Democrats and Republicans. The four tax preferences that generate the largest revenue losses are: tax credits for research and development, special deductions for U.S. manufacturing facilities, accelerated depreciation for capital investments, and tax-exempt interest from municipal bonds.

Rather than fighting about political untouchables, legislators should change the tax treatment of foreign profits of U.S. corporations. Under current law, foreign profits are subject to a 35% U.S. tax, but that tax may be deferred indefinitely if those profits are kept abroad. U.S. corporations are sheltering almost $2 trillion in profits abroad, according to Audit Analytics.

Read the complete article at wsj.com…

Executives’ Biggest Productivity Challenges, Solved [Harvard Business Review]

Robert Pozen knows a little something about thriving at the top — he’s the former chairman of MFS Investment Management, a senior lecturer at Harvard Business School, and the author of the book Extreme Productivity. I recently asked him about how demands on executives — and CEOs in particular — have changed over the years, and how today’s leaders can best navigate their busy days. An edited version of our conversation is below.

What are the most pressing productivity issues executives are facing today, and how can they tackle them?

For executives who aren’t part of the C-suite, I think the two most pressing issues are meetings and email. They consume a ridiculous amount of people’s time, and a lot of it isn’t well spent. But they’re both solvable problems.

On email, my suggestions are pretty simple. First, don’t look at it every minute; look at it every hour or two. Second, try to discipline yourself to read only the subject matter in order to discard 50% to 80% of your emails right away. We all get so much spam. Third, practice what I call “OHIO” — Only Handle It Once, immediately deciding what to do with each email. Concentrate on the emails that are important and answer them right away. And don’t put them into some sort of storage system, because by the time you’re ready to finally tackle them, you’ll spend another half an hour trying to find them…

Read the full interview at HBR Blog Network…

Overcoming Big Challenges [Interview with InspiredInsider.com]

What are some of the biggest challenges that you’ve faced? In this interview, Bob Pozen discusses:

-Bob’s best tips for improving productivity.
-Bob talks about his humble beginnings.
-Listen to how Bob handles a school yard bully.
-How do you manage your time effectively and efficiently?
-How to set priority and targets with your daily routine.

Watch the full interview at InspiredInsider.com…

Five tips for improving every-day productivity [MIT Sloan innovation@work Blog]

This is the second in a series of three posts about Bob Pozen’s approach to personal productivity and high performance.

We’ve all been there—staring down the week’s to-do list with the best of intentions, only to find, at the end of the week, that we didn’t accomplish everything that was required us. Our tasks get carried over into the following week, and before we know it, we’re caught in the paradox of being simultaneously too busy and minimally productive.

If this sounds familiar, rest assured: there are indeed solutions to your productivity problems. Robert Pozen provides concrete strategies in his new MIT Sloan Executive Education program, Maximizing Your Personal Productivity, and we share some of them below.

“First, let’s understand that professionals are held back from being productive by both external and internal forces,” says Pozen. “External forces are things like emails and meetings—burdensome tasks that can derail even the most promising schedule. And internal constraints, like procrastination and perfectionism, can make us our own worst enemy.”

Read the Five Tips for Cutting Through Clutter at innovations@work…

Ready, set, prioritize [MIT Sloan innovation@work Blog]

This is the first in a series of three posts about Bob Pozen’s approach to personal productivity and high performance.

What stands between you and the more productive version of you—the person who meets his or her personal and professional goals on a daily, monthly, and yearly basis? Robert Pozen provides concrete answers to this question in his new course, Maximizing Your Personal Productivity, offered on March 20-21 by MIT Sloan Executive Education.

“It became clear that although I spent most of my adult life working in financial institutions, and had written text books on the financial industry, all of a sudden everyone was interested in personal productivity,” says Pozen. “People were stopping me on the street to ask for advice; calling me to say how my book had changed their entire approach to reading and writing.”

When we asked him how the course begins, Pozen focused on setting and prioritizing goals—one of the three big ideas in his book. “Most professionals have not taken the time to write down their goals and prioritize them. Without a specific set of goals to pursue, many ambitious people devote insufficient time to activities that actually support their highest professional priorities.”  Pozen adds that unless you bill your time by the hour, you probably only have a vague sense of how much time you’ve allocated to various tasks and functions over the last year. This discrepancy between top priorities and time allocations can happen to anyone, in any field, at any level of an organization.

Read more at innovations@work…

Quoted In: James Surowiecki’s “The Cult of Overwork,” The New Yorker

If the benefits of working fewer hours are clear, why has it been so hard for businesses to embrace the idea? Simple economics certainly plays a role: in some cases, such as law firms that bill by the hour, the system can reward you for working longer, not smarter. And even if a person pulling all-nighters is less productive than a well-rested substitute would be, it’s still cheaper to pay one person to work a hundred hours a week than two people to work fifty hours apiece. (In the case of medicine, residents work long hours not just because it’s good training but also because they’re a cheap source of labor.) On top of this, the productivity of most knowledge workers is much harder to quantify than that of, say, an assembly-line worker. So, as Bob Pozen, a former president of Fidelity Management and the author of “Extreme Productivity,” a book on slashing work hours, told me, “Time becomes an easy metric to measure how productive someone is, even though it doesn’t have any necessary connection to what they achieve…

Read the full article at New Yorker.com…