Workers continued to stash more money in their 401(k) plans in the third quarter, but the stock market’s sharp decline only left them further behind in reaching their savings goals.
The average balance in Fidelity Investments’ plans dropped nearly 12 percent, falling to $64,300 by the end of September from $72,700 three months earlier, the company said Wednesday.
That setback snapped four consecutive quarters of increases, and even put investors behind where they stood a year ago. Their balances were down 2 percent compared with September of last year, according to Fidelity, the largest workplace savings plan provider, with 11.7 million participants.
Blame the 14 percent decline in the Standard & Poor’s 500 index in the third quarter. Investors worried about the European debt crisis and slow economic growth at home, leading to the stock market’s worst quarterly loss since the financial crisis in late 2008.
Workers’ 401(k)s are typically invested in bonds along with stocks to help reduce volatility. Third-quarter investment gains for bonds helped offset some of the stock market’s decline, preventing deeper damage to account balances.
The damage also was eased because workers set aside more from their paychecks to stash in 401(k)s, while employers increased matching contributions.
Fidelity said 84 percent of plan participants contributed over the past 12 months, the highest level in more than two years. Their average contribution was $5,890, setting a record, and up $200 from the same period a year earlier. Employers contributed an average $3,320, an increase of $220.
Over the past 10 years, about two-thirds of annual increases in account balances have been due to workers’ added contributions and company matches, with one-third the result of investment returns, said Beth McHugh, Fidelity’s vice president of market insights.
There are several reasons why changes in account balances don’t match the performance of market indexes. Results depend on the performance of the specific funds an investor holds. Plus, participants in 401(k)s also pay investment fees, which chip away at returns. Investment earnings and contributions can grow tax-free in employer-sponsored 401(k)s, which the government established to encourage saving for retirement.
Balances have risen eight of the 10 quarters since early 2009, when the stock market meltdown reduced the average to $46,200.
Workers who have stayed in the market haven’t been able to rely on investment gains to build up 401(k) savings, because stocks remain about 23 percent below their historic peak in October 2007. Instead, they’ve had to rely on contributions from themselves, and their employers.
Fidelity’s 401(k) participants appear to recognize that, McHugh said. Each quarter for the past two and half years, more workers have increased their contributions than cut them.
However, Fidelity reported a recent slight increase in hardship withdrawals from 401(k)s, reflecting the financial stress many workers face as the economic recovery struggles to find momentum. About 2.3 percent took hardship withdrawals over the 12 months ended Sept. 30. In the latest 12-month period, workers making hardship withdrawals removed an average $5,800.
“People are still looking at their retirement accounts as a source of funds,” McHugh said. “We recommend people look at it as a last resort.”
The major reason? Hardship withdrawals can subject the participants to taxes and possible early withdrawal penalties, if they occur before age 59 1/2. Withdrawals also leave less money in an account to grow as a result of potential market gains and compounding, setting an investor back further in reaching their goals.
Toyota will begin taking orders Tuesday for the plug-in version of its hit Prius hybrid, announcing efficient mileage and a relatively affordable starting price of 3.2 million yen ($41,000), which comes down with green vehicle subsidies.
Toyota is targeting Prius Plug-in sales of 35,000 to 40,000 a year in Japan, and 60,000 globally. The car is set for delivery in Japan in January. With subsidies the cost comes down to 2.75 million yen ($35,200). It starts at $32,000 in the U.S. and 37,000 euros in Europe, according to Toyota.
Japan’s top automaker says the plug-in, which it calls the Prius PHV, is for those who want something more innovative than a regular gasoline-electric hybrid, but are worried about running out of power on the road, as can happen with pure electric vehicles.
When a plug-in runs out of power to keep the electric vehicle going, it becomes a hybrid.
“The plug-in is the premier next-generation ecological car that will follow the hybrid,” said Executive Vice President Takeshi Uchiyamada, the Toyota Motor Corp. engineer known as the “father of the Prius.”
The Prius Plug-in has an estimated electric vehicle cruise range per charge of 26.4 kilometers (16 miles), according to Toyota.
Its mileage is estimated at 61 kilometers per liter for Japanese test conditions, which converts to a whopping 143 miles per gallon. Such numbers vary depending on road conditions. Toyota is promising 87 mpg for the U.S. Prius Plug-in, which will be delivered starting in March. Orders are already being taken online in the U.S.
Green cars such as the Prius Plug-in are expected to take centerstage at the Tokyo Motor Show, which opens to the public this weekend.
Japanese consumers have taken to the Prius, despite a languishing auto market overall, thanks to government-backed subsidies. Nations around the world are offering similar perks, boosting its chance for success.
The Prius Plug-in, which seats five people, comes with a new lithium-ion battery that can be charged from a household outlet, much like an electric car. It also recharges itself while driving like a gasoline-electric hybrid. The battery is more powerful and compact so the back trunk fits three golf bags.
Uchiyamada told reporters that the plug-in was the best solution for green cars as most Japanese don’t drive more than 20 kilometers (12 miles) a day and Toyota studies showed that most people don’t want to use EVs for drives longer than 100 kilometers (60 miles).
How the plug-in fares in coming months will help show whether Toyota can keep riding on its success of the Prius as a global leader in green technology. Toyota said it had collected data from 600 people around the world who had leased the plug-in on a trial basis.
Toyota has sold more than 3.4 million hybrids worldwide so far, including models other than the Prius.
Selling in big numbers is important because it helps cut costs and allows the automaker to offer products at affordable prices.
Honda Motor Co., which has also been aggressive with hybrid technology, has sold 770,000 hybrids worldwide.
Nissan Motor Co., which hasn’t released a global hybrid sales number, is banking more on pure electric, selling 17,500 Leaf cars around the world so far.
In Japan, Toyota will work on services with its housing unit to support plug-in owners’ charging stations, it said.
Iraq on Sunday signed a multibillion-dollar deal with Royal Dutch Shell PLC and Japan’s Mitsubishi Corp. to tap natural gas in the south, one of the biggest agreements by the OPEC member to develop an energy sector battered by years of neglect and war.
The $17 billion deal forms a joint venture to gather, process and market gas from three oil fields in the oil-rich province of Basra. That gas, pumped in conjunction with crude oil, is currently burned off _ or flared _ due to lack of infrastructure.
The 25-year joint venture is called Basra Gas Company. Iraq will hold a 51 percent stake, to Royal Dutch Shell’s 44 percent and Mitsubishi’s 5 percent shares. The gas will be used mainly for domestic energy needs, but there is also an option for exports.
Iraq’s Oil Minister, Abdul-Karim Elaibi hailed the signing as “historic turn in Iraq’s oil industry.”
Shell CEO Peter Voser told reporters that Iraq is now a “…substantial part of Royal Dutch Shell’s portfolio in the Middle East.”
For Iraq, the deal is a key part of its strategy to alleviate power generation woes. Despite billions of dollars spent since the 1990s to rebuild Iraq’s dilapidated electrical grid, Iraqis still suffer through chronic power outages that have led to sometimes violent protests.
The deal is Shell’s third in Iraq since the 2003 U.S.-led invasion, and it will bolster the company’s presence in a country which sits atop 143.1 billion barrels of crude oil and 126.7 trillion cubic feet of gas reserves.
A memorandum of understanding on the Shell gas deal was signed in September 2008, but the venture has been bogged down ever since. Some lawmakers argued that the deal should have been approved by parliament and officials in Basra wanted more benefits for their province cash advance today.
Iraq burns off almost half of the 1.5 billion cubic feet per day of gas that it produces. The deal will help the country capture more than 700 million cubic feet per day of gas from three fields.
They are the 17.8 billion-barrel Rumaila field being developed by a BP-CNPC consortium, the 4.1 billion barrel Zubair field, handled by an Eni-led consortium and partners Occidental Petroleum Corp. and KOGAS, as well as the 8.6 billion barrel West Qurna Stage 1, which is being developed by ExxonMobil-Shell consortium.
ExxonMobil has recently been embroiled in controversy after it became known that the company had signed a contract with the Kurdish regional government _ and not the Oil Ministry in Baghdad _ to develop oil fields in northern Iraq.
The Kurdistan Regional Government has clashed with Baghdad over who has the right to sign deals with international oil companies to develop Iraq’s vast energy resources.
The Kurds, who control three provinces in northern Iraq, want to be able to sign contracts with international oil companies to develop their own fields, while Baghdad maintains it has final authority.
On Sunday the oil minister said the ministry sent letters to ExxonMobil asking for an explanation of the reports that they signed these deals, but has not yet heard a response. He declined to comment on what penalties the Texas-based company might face.
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Actress Sienna Miller told a media ethics inquiry Thursday that she was left paranoid and scared by years of relentless tabloid pursuit that ranged from paparazzi outside her house to the hacking of her mobile phone.
Miller said the surveillance, and a stream of personal stories about her in the tabloids, led her to accuse friends and family of leaking information to the media. In fact, her cell phone voice mails had been hacked at Rupert Murdoch’s News of the World tabloid.
Miller, 29, became a tabloid staple when she dated fellow actor Jude Law. She said the constant scrutiny left her feeling “very violated and very paranoid and anxious, constantly.”
“I felt like I was living in some sort of video game,” she said.
She called the paparazzi focus on her terrifying.
“For a number of years I was relentlessly pursued by 10 to 15 men, almost daily,” she said. “Spat at, verbally abused.
“I would often find myself, at the age of 21, at midnight, running down a dark street on my own with 10 men chasing me. And the fact they had cameras in their hands made that legal.”
Miller, the star of “Layer Cake” and “Alfie,” was one of the first celebrities to take the News of the World to court over illegal eavesdropping. In May, the newspaper agreed to pay her 100,000 pounds ($160,000) to settle claims her phone had been hacked.
The newspaper’s parent company now faces dozens of lawsuits from alleged hacking victims.
Miller, who looked confident as she gave evidence at London’s Royal Courts of Justice, said challenging Murdoch’s media conglomerate had been a difficult decision.
“I was very nervous about taking on an empire that was richer and far more powerful than I will ever be,” she said. “It was very daunting.”
“Harry Potter” author J.K. Rowling, who has campaigned to keep her children out of the media glare, is due to give evidence later Thursday about media intrusion.
Prime Minister David Cameron set up the inquiry amid a still-unfolding scandal over illegal eavesdropping by the Murdoch-owned tabloid. Murdoch closed down the News of the World in July after evidence emerged that it had illegally accessed the mobile phone voice mails of celebrities, politicians and even crime victims in its search of scoops.
More than a dozen News of the World journalists and editors have been arrested over allegations of illegal eavesdropping, and the scandal has also claimed the jobs of two top London police officers, Cameron’s media adviser and several senior Murdoch executives.
The inquiry, led by Judge Brian Leveson, plans to issue a report next year and could recommend major changes to media regulation in Britain.
Miller took the stand after another witness was allowed to give evidence in private. The courtroom was cleared of the press as the witness, identified only as HJK, testified about suffering intrusions while in a relationship with a well-known figure, whose identity was also kept secret.
Former Formula One boss Max Mosley, who has campaigned for a privacy law since his interest in sadomasochistic sex was exposed in the News of the World, broadened the focus in testimony Thursday, discussing the difficulty of squashing malicious stories in the Internet age.
Mosley successfully sued the News of the World over a 2008 story headlined “Formula One boss has sick Nazi orgy with five hookers.” Mosley has acknowledged the orgy, but argued that the story _ obtained with a hidden camera _ was an “outrageous” invasion of privacy. He said the Nazi allegation was damaging and “completely untrue.”
Mosley said he has had stories about the incident removed from 193 websites around the world, and is currently taking legal action “in 22 or 23 different countries,” including proceedings against search engine Google in France and Germany.
“The fundamental thing is that Google could stop this appearing but they don’t or won’t as a matter of principle,” he said. “The really dangerous things are the search engines.”
“You work all your life to try and achieve something or do something useful,” Mosley added. “And suddenly something like this happens and that’s what you’re remembered for.”
High-profile witnesses still to come include CNN celebrity interviewer Piers Morgan, who has denied using phone hacking while he was editor of the Daily Mirror newspaper.
The hearings have heard allegations of media malpractice and intrusion that extend far beyond the News of the World.
Witnesses have included celebrities like actor Hugh Grant and ordinary people pursued in times of grief, including the parents of murdered 13-year-old Milly Dowler, whose voice mails were accessed by the News of the World after she disappeared in 2002.
Her parents said the hacking gave them false hope their daughter was still alive during the investigation into her disappearance.
On Wednesday, the parents of missing child Madeleine McCann said they were left distraught by false stories and the publication of private information by the tabloid press.
Kate and Gerry McCann told the inquiry they felt powerless in the face of stories, based on concocted evidence, suggesting they had killed their daughter. Madeleine had vanished when she was three during the British family’s 2007 vacation in Portugal.
A California solar panel manufacturer that received a half-billion dollar loan from the federal government before declaring bankruptcy says it’s been unable to attract much interest from potential buyers to take over its operations.
Instead, Solyndra LLC is looking at a piecemeal sale of its assets, with separate auctions for its machinery and equipment, real estate and intellectual property.
Solyndra officials told a U.S. bankruptcy trustee Tuesday that no qualified bidders have come forward to buy the company and take over its manufacturing operations.
Chief restructuring officer Todd Neilson said Fremont, Calif.-based Solyndra had received only one bid for a sale of the whole company.
“It was extremely low-ball,” he explained. “It was mainly designed to take the equipment and the real estate at an extraordinarily low price.”
Neilson said fewer than five potential bidders, mostly from other countries, are still conducting due diligence. But it is “highly unlikely” that a buyer willing to buy Solyndra outright and continue its operations would emerge, he said.
Solyndra representatives blamed the lack of interest on the economy, not on the political fallout stemming from Solyndra’s failure.
“It’s a difficult economic environment. It’s a difficult industry,” Debra Grassgreen, a Solyndra bankruptcy attorney, said after a creditors meeting Tuesday.
Solyndra, which received a $528 million federal loan and was touted by the Obama administration as a “green jobs” creator, filed for bankruptcy protection in September. The filing came several months after a February loan restructuring in which some $70 million borrowed from private investors got priority over $385 million in taxpayer money for repayment in the event of a default.
Under the February restructuring, Argonaut Ventures and another private investment firm, Madrone Partners LP, stand to be repaid before U.S bad credit payday advance. taxpayers. Congressional leaders have said allowing private investors to move ahead of taxpayers for repayment may have been illegal.
Argonaut is an investment vehicle of the George Kaiser Family Foundation of Tulsa, Okla. The foundation is headed by Oklahoma billionaire George Kaiser, a major Obama campaign contributor and a frequent visitor to the White House.
Following its bankruptcy filing, Solyndra became the target of separate investigations by the FBI and congressional Republicans.
Testifying before a House committee last week, Energy Secretary Steven Chu defended the federal loan to Solyndra, but at that same time said he was unaware of many details about the loan or financial problems that Solyndra faced, including predictions by DOE staff two years ago that the company would likely face severe cash-flow problems.
Chu also denied that he was influenced by Kaiser, who invested $400 million in Solyndra. Kaiser has said he played no part in helping Solyndra win the 2009 loan, but emails released earlier this month show that he discussed Solyndra with the White House on at least one occasion. Kaiser also directed business associates on how to approach the White House and the Energy Department to help Solyndra deal with its financial problems.
Chu denied that anyone in the White House ever contacted him to make a political decision on the loan and said cheap imports from China, the collapse of the European market for solar panels, and other market changes led prices for Solyndra’s product to fall.
While prospects for a takeover of Solyndra’s operations appear dim, officials said an auction of the company’s non-core assets, such as office equipment, went better than expected.
Guyana has signed a $1 billion agreement with a Canadian-based company for what the government says is the largest private mining investment for the South America country.
Toronto-based Guyana Goldfields Inc. said the Aurora Gold Project agreement signed Friday is the first large-scale gold mining license that Guyana has issued since 1991.
The government said it is expected to create more than 1,900 temporary and permanent jobs and Guyana Goldfields CEO Patrick Sheridan said it is expected to generate $1.6 billion in government revenues at a time of record gold prices.
The company announcement said it will pay a mining royalty of 5 percent when gold sells for $1,000 an ounce and 8 percent when the price is greater. It will also pay a corporate income tax of 30 percent.
The agreement is for 20 years, with provisions for extension.
The company said construction should start early next year and the mine and mill should be operating by early 2014.
Guyana’s government on Friday also announced a $138 million contract with the Beijing-based China Harbor Engineering Co faxless payday loans. to build a new airport terminal and add more than 3,200 feet (1,000 meters) to the main runway at the country’s principal airport, Cheddi Jagan International.
The current 7,400-foot (2,255-meter) runway cannot accommodate fully loaded jumbo jets. A Caribbean Airlines Boeing 737 aircraft that landed late on the runway on July 20 crashed through a fence, breaking in two. No one died.
The two deals come just ahead of Nov. 28 parliamentary elections, and the main opposition coalition complained the airport deal should have been debated by the legislature.
Rupert Roopnarine, the prime ministerial candidate of the Partnership For National Unity, criticized the government for making the deal after Parliament was dissolved for the general election.
The American public has gotten past its animosity toward General Motors for taking a government bailout in 2009, the company’s top executive said Thursday.
Chairman and CEO Dan Akerson said a poll taken last summer for GM by Washington public opinion firm Peter Hart Research Associates shows that more than 70 percent of Americans have a positive opinion of the company. When the same poll was taken in July of 2009, more than 70 percent had a negative opinion, Akerson said.
“I think America loves a competitor. I think General Motors, Chevrolet in particular, is part of Americana,” Akerson said during an appearance at the Detroit Economic Club.
In 2009, GM, saddled with high debt and expensive labor costs, needed $49.5 billion in government loans to survive a trip through bankruptcy court.
The U.S. government got a stake in the restructured company, part of which was sold in an initial public stock offering about one year ago on Nov. 18, 2010. The government’s remaining 500 million shares would have to sell for around $53 per share for the U.S. to break even. Such a sale probably won’t come anytime soon. GM shares are trading around one-third less than the $33 IPO price.
The summer before the IPO, then-GM Chairman and CEO Ed Whitacre said government ownership was hurting the company’s sales. Whitacre said GM didn’t want to be known as “Government Motors.”
But Akerson said on Thursday that the new GM is now making money and has passed that stage.
“I do think that we’ve kind of gotten over that,” he said.
GM made a net profit of just over $7.1 billion in the first nine months of the year.
Akerson said the government doesn’t get involved in running GM. But he’s concerned about government pay limits for companies that took bailout money. GM, he said, won’t be able to give bonuses to its 25 highest-paid executives _ even though it could make $8 billion or $9 billion this year.
“We’ve got some very, very good people that could do well at other companies who are doing this one for the home team,” he said.
Akerson pinned the drop in GM’s stock price on the broader economy, not automaker’s performance. Shares of General Motors Co. were down 96 cents, or 4.2 percent, to $21.69 in afternoon trading Thursday. They’re down about 41 percent for the year, slightly worse than the 40 percent drop in shares of Ford Motor Co.
Akerson also said GM will take actions to right its money-losing European operations. He referred to French competitor Peugeot Citroen SA’s plan cut 6,000 jobs because of flat demand in Europe, although he stopped short of saying there would be plant closures or layoffs at GM.
He said the government debt crisis in Europe could have a larger impact on the U.S. than the 2008 financial meltdown and recession, because Europe is “a hugely and important cultural and economic center of gravity for the world.”
Last week GM said its third-quarter net income fell 15 percent from a year earlier to $1.7 billion, partly because of a pretax loss of $292 million in Europe. The loss forced GM to back off an earlier forecast of breaking even in Europe this year.
“Clearly you can’t have a unit as important as Opel is to General Motors chronically unprofitable,” he said. “It’s not sustainable and it’s not good for the company.”
Yemen’s embattled president must speed up reforms and begin a transfer of power according to a plan backed by the international community, said a U.N. envoy on Monday.
Jamal Benomar visited Yemen for a week to promote a Gulf-backed proposal that calls for President Ali Abdullah Saleh to transfer power to his vice president in exchange for immunity from prosecution.
Saleh told a TV interviewer that he will sign, but he did not say when.
Saleh has resisted the proposal despite nearly nine months of protests against his 30-year rule. Several times he said he would sign, only to back away at the last minute. Months of international diplomacy has failed to resolve the crisis.
Benomar held meetings with opposition figures on Monday, including Maj. Gen. Ali Mohsen al-Ahmar, who leads a military unit of defectors siding with the opposition and protecting protesters.
Earlier in his trip, Benomar met with Saleh and his deputy.
In a rare interview with foreign media, Saleh told the TV channel France 24 that he would sign the Gulf-backed package, but he would not say when that would happen or what was preventing him from doing so, vaguely noting that there was no time mechanism in the accord online payday loan lenders. The interview was broadcast late Monday.
“Definitely, definitely,” Saleh replied when asked if he intended to leave power. “I believe that anyone who grips on to power is crazy.” He said he would step down 90 days after the agreement goes into effect, but he did not say when that would be.
Mediators and opposition figures have become exasperated with what they see as Saleh’s stalling tactics.
He said that the media was lying when reporting he refused to sign the agreement. He accused armed militias of infiltrating peaceful demonstrations in Yemeni cities.
Pro-Saleh forces regularly engage in deadly clashes with armed tribesmen and military defectors who support the protesters in Yemen’s largest cities, and al-Qaida-linked militants have taken control of entire towns in the country’s restive south.
Security has collapsed across the Arab world’s poorest nation during the nine-month popular uprising.
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