Mark A Scott

By Mark Scott – Originally published for The New York Times on June 8, 2011

While a handful of initial public offerings are hitting the market with a pop, many are landing with a thud.

Following the frenzied debuts of LinkedIn, Yandex and other new Internet shares, it’s easy to forget that dozens of other I.P.O.’s this year are falling below size expectations or not producing double-digit price gains. Investors just don’t have the same fervor for nontechnology offerings, which in the United States have raised $22 billion so far this year, or roughly 80 percent of the total I.P.O. volume.

Given lackluster demand, some companies have been forced to cut the size of their offerings, watch their shares suffer or even withdraw their offerings altogether. In early June, Resourcehouse, the Australian mining company, shelved its plans for a listing in Hong Kong, citing unfavorable market conditions. Russian Helicopters, a state-owned aerospace group, and the payment company Skrill postponed their London debuts for similar reasons.

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By Mark Scott - Originally published for BusinessWeek on July 15, 2010

Baby boomers fretting over their pensions should spare a thought for Constance DeCherney. Like many of her generation, the 27-year-old Web strategist at Planned Parenthood in New York has done little to prepare for retirement. While she became eligible for a 401(k) in 2005, DeCherney only began putting money into it last year. She now contributes 3 percent of her pay, though that’s just half of what Planned Parenthood will match, and DeCherney doesn’t know how the investments are performing. “Just the idea of [saving for retirement] feels overwhelming,” she says. “My fear of doing something wrong, or not doing enough, sort of paralyzes me.”

DeCherney is typical of America’s so-called Generation Y, the twentysomethings who have entered the workforce in the past 10 years. Already saddled with student debts averaging almost $20,000, according to New York-based think tank Demos, Gen Y is in a tougher financial position than previous generations. The average salary for 25- to 34-year-olds, for instance, fell 19 percent over the last 30 years, after adjusting for inflation, to $35,100, Demos estimates. That’s if they can get jobs: Unemployment among 19- to 24-year-olds stands at 15.3 percent vs. the overall rate of 9.5 percent, according to the Bureau of Labor Statistics. While many of their parents have guaranteed retirement income from being in a company-funded pension for part of their careers, Gen Y is “the first do-it-yourself retirement generation,” says Catherine Collinson, president of the Transamerica Center for Retirement Studies in Los Angeles.

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By Mark Scott - Originally published for BusinessWeek on July 15, 2010

Mamadou Doukowu had planned to retire in 2016 and start a life of leisure on a state pension. Now, it appears the 54-year-old Paris security guard may have to wait a bit longer to hang up his badge. President Nicolas Sarkozy wants to raise France’s retirement age from 60 to 62 as he grapples with a soaring deficit. “If you’ve worked for 40 years, your body is tired,” Doukowu says as he directs trucks into a Paris construction site. “I’ve paid into the system. They owe it to me.”

Politicians from Athens to Madrid have targeted pension reform as a way to offset government debt. No wonder. According to the Organization for Economic Cooperation & Development, state pensions in Europe can reach 95 percent of preretirement earnings, vs. 39 percent in the U.S. from Social Security payouts (though many Americans can tap into private 401(k)s and similar tax-deferred options available to few Europeans). Retirement ages are often lower than in the U.S.: Greeks who have worked 35 years can get a full pension at 58 despite an official retirement age of 65. Says David Blake, director of the Pension Institute at Cass Business School in London: “Europe is in a fantasy world” when it comes to retirement.

With nearly everyone in Europe eligible for a public pension, governments know they need to get people to spend more years on the job. Currently, there are four workers for every retiree in Europe. That ratio will halve by mid-century as the population ages, the OECD says. The change risks leaving Europe without enough tax revenue to pay for lush pensions. “Working longer is the only solution for avoiding old-age poverty,” says Monika Queisser, head of the OECD’s social policy division.

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