New Update: Healthcare Costs Increasing by Over 60% in Some States. Will you be impacted?

For Southwest Gas Holdings Employees: Understanding the Impact of a Strong Dollar on Your Retirement Planning

Healthcare Provider Update: Healthcare Provider for Southwest Gas Holdings Southwest Gas Holdings provides healthcare benefits through a variety of insurers, primarily utilizing Aetna for their healthcare plans. This partnership enables employees to access a broad network of healthcare services. Expected Healthcare Cost Increases in 2026 As we approach 2026, healthcare costs are anticipated to soar, significantly impacting those affiliated with Southwest Gas Holdings. This expected surge stems from factors such as the expiration of enhanced federal subsidies for Affordable Care Act (ACA) plans, which could lead to a staggering increase of over 75% in out-of-pocket premiums for many enrollees. Moreover, aggressive rate hikes from major insurers, combined with rising medical costs, suggest that employees and retirees may face a challenging financial landscape in the coming year. Proactive management of health benefits and planning will be crucial for individuals navigating these increasing costs. Click here to learn more

If you are employed at Southwest Gas Holdings, it is imperative to consider exchange rates as an opportunity to capitalize and better plan your finances. In late September 2022, the U.S. dollar hit a 20-year high in an index that measures its value against six major currencies: the euro, the Japanese yen, the British pound, the Canadian dollar, the Swedish krona, and the Swiss franc. At the same time, a broader inflation-adjusted index that captures a basket of 26 foreign currencies reached its highest level since 1985. Both indexes eased slightly but remained near their highs in October. ^1–2

Intuitively, it might seem that a strong dollar is good for the U.S. economy, but the effects are mixed in the context of other domestic and global pressures.

World Standard
Those employed by Southwest Gas Holdings should be aware that the U.S. dollar is the world's reserve currency. About 40% of global financial transactions are executed in dollars, with or without U.S. involvement. ³ As such, foreign governments, global financial institutions, and multinational companies all hold dollars, providing a level of demand regardless of other forces.

Demand for the dollar tends to increase during difficult times as investors seek stability and security. Despite high inflation and recession predictions, the U.S. economy remains the strongest in the world. ⁴ Other countries are battling inflation, too, and the strong dollar is making their battles more difficult. The United States recovered more quickly from the pandemic recession, putting it in a better position to weather inflationary pressures. This information may be useful for those working for Southwest Gas Holdings as it may help you make decisions that better protect your assets.

Employees of Southwest Gas Holdings should keep in mind how the Federal Reserve's aggressive policy to combat inflation by raising interest rates has driven demand for the dollar even higher because of the appealing rates on dollar-denominated assets such as U.S. Treasury securities. Some other central banks have begun to raise rates as well — to fight inflation and offer better yields on their own securities. But the strength of the U.S. economy allows the Fed to push rates higher and faster, which is likely to maintain the dollar's advantage for some time.

Exports and Imports
The strong dollar makes imported goods cheaper and exported goods more expensive. For those working for Southwest Gas Holdings, cheaper imports are generally good for consumers and for companies that use foreign-manufactured supplies, but they can undercut domestic sales by U.S. producers.

At the same time, the strong dollar effectively raises prices for goods that U.S. companies sell in foreign markets, making it more difficult to compete, and reducing the value of foreign purchases. Employees at Southwest Gas Holdings can take a U.S. company that sells 10,000 euros worth of goods as an example. The foreign buyer would receive less revenue when a euro buys fewer dollars. Some experts are concerned that the strong dollar will dampen the post-pandemic rebound in U.S. manufacturing. ⁵ More broadly, the ballooning trade deficit cuts into U.S. gross domestic product (GDP), which includes imports as a negative input and exports as a positive input.

Overseas Exposure
Generally, large multinational companies have the most exposure to risk from currency imbalances, and the stock market has shown signs of a shift from large companies — which have dominated the market since before the pandemic — to smaller companies that may be more nimble and less dependent on overseas sales. The S&P SmallCap 600 index has outperformed the S&P 500 index through late October; if the trend continues through the end of the year, it would be the first time since 2016 that small caps have eclipsed large caps. ⁶ The S&P MidCap 400 index has done even better. Despite that, those working for Southwest Gas Holdings must also account for how in the current bear market, better performance means lower losses; all three indexes have had double-digit losses through October 2022. ⁷

Global Pain
A weak currency can be a boon for a country by making its exports more competitive. But with the world economy weakening, other countries are not reaping those benefits, while paying more on debt and imported essentials such as food and fuel that are traded in dollars. Those working for Southwest Gas Holdings should consider how the Fed is focused on domestic concerns, but it is effectively exporting inflation while trying to control it at home, and global economic pain could ultimately spread to the U.S. economy. ⁸

Slowing the Dollar
In the near term, the Fed's aggressive rate hikes may reduce domestic demand for foreign goods, reducing the trade deficit and weakening the dollar. The advance Q3 2022 GDP estimate showed the trade gap closing, but it's unclear if the trend will last. ⁹

In the longer term, as inflation eases in the United States, the Fed will likely take its foot off the gas pedal and ultimately bring rates down. Southwest Gas Holdings employees should understand how this would allow other central banks to catch up if they choose to do so, and would make foreign currencies and securities more appealing. Lower oil prices (denominated in dollars) and/or any reduction in world tensions — such as a slowdown in the Russia-Ukraine war — might also help reduce demand for dollars.

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The dynamics of these factors are complex, and it may take time for any of them to unfold. In the meantime, the strong dollar is a sign of U.S. economic strength, and it would not be wise to place too much emphasis on it for long-term investment decisions. However, this could be a great time for an overseas vacation.

U.S. Treasury securities are guaranteed by the federal government as to the timely payment of principal and interest. The principal value of Treasury securities fluctuates with market conditions. If not held to maturity, they could be worth more or less than the original amount paid.

Southwest Gas Holdings employees should be aware of how all investments are subject to market volatility and loss of principal. Investing internationally carries additional risks such as differences in financial reporting, currency exchange risk, and economic and political risk unique to the specific country. This may result in greater share price volatility. Shares, when sold, may be worth more or less than their original cost. The value of a foreign investment, measured in U.S. dollars, could decrease because of unfavorable changes in currency exchange rates.

The S&P 500 index is an unmanaged group of securities that is considered to be representative of the U.S. stock market in general. The performance of an unmanaged index is not indicative of the performance of any specific investment. Individuals cannot invest directly in an index. Past performance is not a guarantee of future results. Actual results will vary.

1) MarketWatch, October 19, 2022 (U.S. Dollar index)
2) Federal Reserve, 2022 (Real Broad Dollar index)
3, 8) The New York Times, September 26, 2022
4, 6) The Wall Street Journal, October 17, 2022
5) The Wall Street Journal, October 9, 2022
7) S&P Dow Jones Indices, 2022
9) U.S. Bureau of Economic Analysis, 2022

How does the Southwest Carpenters Pension Plan accommodate changes in benefits for employees who have been affected by the COVID-19 pandemic, and what specific provisions have been implemented to ensure continuity of pension credit during such interruptions? Employees of the Southwest Carpenters Pension Plan are particularly encouraged to review how these provisions may impact their retirement plans and benefits, especially given the unprecedented circumstances of the pandemic.

The Southwest Carpenters Pension Plan accommodated changes due to COVID-19 by extending various deadlines for participants, such as the 12-month deadline to apply for pension credit for periods of disability, and other deadlines regarding claims and appeals. These extensions were applied from March 1, 2020, to a period of up to one year after the original deadline or 60 days after the end of the COVID-19 national emergency, ensuring continuity of pension credit during the pandemic interruptions(Southwest Carpenters Pe…).

What enhancements to pension benefit calculations have been introduced for the years following January 1, 2021, under the Southwest Carpenters Pension Plan, and how do these changes affect participants working more than 1,800 hours? This question emphasizes the implications of increased benefit accrual rates and the actual processes employees must follow to calculate their pensions effectively.

Enhancements to pension benefit calculations effective January 1, 2021, under the Southwest Carpenters Pension Plan include an increase in the monthly benefit accrual rate for participants working 1,800 hours or more. The rate increased from $100 to $200, and for those working more than 1,800 hours, a maximum benefit accrual rate of $244.44 was introduced(Southwest Carpenters Pe…).

In the context of the Southwest Carpenters Pension Plan, could you explain the eligibility criteria for receiving a Service Pension and how employees can accumulate the necessary Pension Credits more quickly? This consideration is vital for members who wish to understand the retirement options available to them and the strategies they might employ in their careers to maximize their benefits under the Southwest Carpenters Pension Plan.

Employees of the Southwest Carpenters Pension Plan are eligible for a Service Pension after earning 30 years of Pension Credit. Additional Service Pension Eligibility Credit was introduced, allowing employees working over 1,800 hours annually to accumulate credits more quickly, up to a maximum of 2,200 hours(Southwest Carpenters Pe…).

How do temporary disability benefits interact with the accumulation of Pension Credits within the Southwest Carpenters Pension Plan? Specifically, employees may have questions about how their working history and service time might be affected should they take leave for health-related reasons, highlighting the intricate balance between pay and benefits during challenging times.

Temporary disability benefits under the Southwest Carpenters Pension Plan allow participants to accumulate Pension Credits during non-working periods if they are on short-term disability or receiving workers' compensation. Pension Credits can be granted for up to 1,200 hours annually, depending on the nature of the disability and employment history(Southwest Carpenters Pe…).

What are the implications of the revised definitions under the Required Beginning Date as specified by the Southwest Carpenters Pension Plan, particularly in compliance with the SECURE Act (Setting Every Community Up for Retirement Enhancement Act)? Employees should understand how these legislative changes affect their retirement strategies, especially in light of penalties for failing to comply with mandatory commencement dates.

The Required Beginning Date for the Southwest Carpenters Pension Plan was revised to comply with the SECURE Act. Participants born on or after July 1, 1949, must begin receiving benefits by April 1 of the calendar year following the year they turn 72. Failure to comply with this could result in a 50% excise tax(Southwest Carpenters Pe…).

How can employees of the Southwest Carpenters Pension Plan navigate the process for applying for pension credit during periods of Temporary Disability, and what specific documentation is required? This inquiry encourages a deeper understanding of protocol surrounding disability applications and the associated benefits that participants are entitled to under the Plan.

Employees applying for pension credit during periods of Temporary Disability must submit a written application within one year of the onset of the disability, and provide documentation such as state-approved short-term disability certification or workers' compensation benefits(Southwest Carpenters Pe…).

What are the implications of the retroactive increases to the Southwest Carpenters Pension Plan benefits aimed at participants who accrued credit during the years 2011 to 2020, and how can affected employees determine their eligibility for said increases? Employees often seek clarification on how historical contributions can manifest in current benefits.

Retroactive increases to the Southwest Carpenters Pension Plan benefits for the years 2011 to 2020 apply to participants who worked at least 1,000 hours in 2020 or under specific collective bargaining agreements. A 50% increase in benefit accrual rates was applied to these years, and eligible employees can determine their eligibility based on their hours worked(Southwest Carpenters Pe…).

What role does the Southwest Carpenters Administrative Office play in assisting employees who have questions regarding modifiability in their pension plans, and what are the best methods for contacting them for assistance? This question highlights the importance of communication within the organization concerning employee inquiries and issue resolution.

The Southwest Carpenters Administrative Office assists employees with questions regarding modifications to their pension plans. Participants can contact them at (213) 386-8590 or (800) 293-1370 for personalized assistance(Southwest Carpenters Pe…).

Can you detail the factors influencing the Benefit Accrual Rate for participants of the Southwest Carpenters Pension Plan for the calendar years after 2021, and how might employees calculate their expected pension benefits? Participants will want to understand the nuances of how their benefits are computed to make informed decisions regarding their retirement planning.

The Benefit Accrual Rate for participants of the Southwest Carpenters Pension Plan after 2021 increased to $200 for 1,800 hours worked, with higher accrual rates for additional hours. Employees can calculate their benefits by multiplying their benefit accrual rate by the applicable benefit factor(Southwest Carpenters Pe…).

In the event of legal actions regarding benefits under ERISA against the Southwest Carpenters Pension Plan, what venue restrictions apply, and what does this mean for participants seeking resolution in disputes? Employees need to be informed of the legal frameworks governing their benefits and understand their rights and the procedures that affect their claims within the Southwest Carpenters Pension Plan.

Legal actions regarding benefits under ERISA against the Southwest Carpenters Pension Plan must be filed in Federal District Court in Los Angeles County, California. This venue restriction defines the jurisdiction where participants must file claims(Southwest Carpenters Pe…).