Safe Winter Driving

Winter driving can be hazardous and scary, especially in northern regions that get a lot of snow and ice. Additional preparations can make any trip safer and help motorists deal with emergencies. Here is some safety information to prevent motor vehicle injuries due to winter storms.

The three Ps of safe winter driving are PREPARE for the trip; PROTECT yourself; and PREVENT crashes on the road.


Maintain your car: Check battery, tire treads, and windshield wipers; keep your
windows clear; put no-freeze fluid in the washer reservoir; and check your antifreeze.
Have on hand: flashlight, jumper cables, abrasive material (sand, kitty litter, even
floor mats), shovel, snow brush and ice scraper, warning devices (like flares), and
blankets. For long trips, add food and water, medication, and cell phone.
Stopped or stalled? Stay in your car, don’t overexert, put bright markers on the antenna or windows, shine the dome light, and, if you run your car, clear the exhaust pipe of snow and run it just enough to stay warm.
Plan your route: Allow plenty of time (check the weather and leave early if
necessary), be familiar with the maps/ directions, and let others know your route
and arrival time.

Practice cold-weather driving!

  • During daylight, rehearse maneuvers slowly on ice or snow in an empty lot.
  • Steer into a skid.
  • Know what your brakes will do: stomp on antilock brakes, pump non-antilock brakes.
  • Remember that stopping distances are longer on water-covered ice and ice.

Protect Yourself

Buckle up and use child safety seats properly.
Never place a rear-facing infant seat in front of an air bag.
Children 12 and under are much safer in the backseat.
Don’t idle for a long time with the windows up or in an enclosed space.

Prevent Crashes

Drugs and alcohol never mix with driving.
Slow down and increase distances between cars on slick roads.
Keep your eyes open for pedestrians walking in the road.
Avoid fatigue — get plenty of rest before a long trip, stop at least every three hours, and rotate drivers if possible.
If you are planning to drink, designate a sober driver.

U.S. Department of Labor

Concerned about your personal insurance coverage? At Cleary, our experienced Personal Lines department will work with you to evaluate your insurance needs, identify exposures, and create a customized insurance portfolio. Give us a call today at 617-723-0700.

DOL Issues Final Rule to Implement Executive Order #13495

At the December 2012 Professional Services Council Labor Relations Committee (PSCLRC) meeting, US Department of Labor (DOL) Wage and Hour Division representatives indicated that the Federal Acquisition Regulation Proposed Rule entitled Nondisplacement of Qualified Workers Under Service Contracts should become finalized early next year, possibly in January 2013.

DOL stated that they will have a webinar and separate e-mail for questions regarding this rule.

Contractors must still ensure that their respective contracting officers put this stipulation into their contracts before implementation.

DOL Investigations

At the December PSCLRC meeting, DOL Wage and Hour representatives revealed that there were more than 800 service contract investigations during the last fiscal period; $44 million collected in back pay wages from contractors; 15,000 employees investigated; and 19 debarments. The representatives were asked for additional quantitative breakdowns on this data, but they said the information was confidential. As a result of this response, another meeting with the DOL administrator is scheduled for January 2013 to continue the discussion.

All the contractors present at the meeting provided input to the DOL indicating that they have received numerous complaints from member companies as well as contracting agencies regarding the methodology of these investigations, some of which went on for as long as 18 months without reaching a conclusion.

The DOL confirmed that the 300-plus full-time investigators hired in the past three to four years under ARRA funding will remain. These investigators have been trained in stages, according to the when they audit contractors they have to check 10 to 12 statutes, which takes a considerable amount of time. There can also be delays if they request information from the contracting community and do not receive it in a timely fashion.

The DOL representatives stated that many of these investigations have been “directive” rather that responding to individual complaints. They also mentioned that if an investigator is directed to check out a complaint under Executive Order #13495, they may also conduct a complete investigation of the prime contractor and all of its subcontractors.

PSC members stated that some of the investigators have harassed contractors, alleging that if they did not pay what was stated in the summary of unpaid wages, the DOL would withhold funds on the contract or have them face debarment. Contractors also indicated that investigators were asking for too much company data and for too many records, and in many cases asked for the same data twice. There have also been many instances where investigators did not have a firm foundation in the Service Contract Act, leading to further delays in getting the audits completed. Some of these investigations are taking too long, the contractors said, and as a result, if there are findings that a contractor is liable and must pay back wages, the amount of back pay is more than it would have been had the audit been completed earlier.

PSC again reiterated to DOL that if an investigator finds that a contractor is not in violation, but the contracting entity has violated the rules and back pay is deemed necessary, it is the contractor who appears on the violation. PSC members feel this is unfair and must be corrected.

It was recommended that every contractor ensure that all their personnel dealing with Service Contract Act issues or responsibilities have adequate training. For more information, contact MARAL,LLC; or Al Corvigno, who provides a one-day SCA/DBA course, at 252-312-4853 or

At Cleary, we know how important a comprehensive benefits package can be to your continued success. Give us a call today at 617-723-0700 and we will work with you to create a plan that meets your fringe-benefit obligations and provides your employees with valuable benefits.

Client Spotlight: Adoption and Foster Care Mentoring

Since 2001, Adoption & Foster Care Mentoring (AFC) has empowered foster and adopted children in Greater Boston to flourish through committed mentoring relationships. AFC is one of only a few mentoring organizations in the country that exclusively serve this population, and it provides the most targeted, specialized mentoring service for young people who have been removed from their homes due to alleged abuse or neglect. Youths in the child welfare system constitute one of the more underserved populations in our community, and these children can benefit significantly from committed mentorships and increased access to employment training, education, and other critical job- and life-skills resources.

AFC serves children seven and older through AFCMentors, its one-to-one mentoring program. AFCLeaders is a group-mentoring program for youths 14 and older who are preparing to “age out” of the child welfare system.

Please click here to download a short overview of AFC with program statistics and outcomes.

Let it Snow, Let it Snow, Let it Snow!

If you are a contractor who also plows snow for public or private entities, there are a few things you should know before you start plowing this winter.

Your automobile insurance policy will provide you with liability coverage — bodily injury and damage to the property of others — while you are actually plowing. And hopefully (keep reading), your general liability policy covers you once you have finished the work. That is, it provides coverage for suits regarding slips and falls resulting from any alleged poor plowing claims that might come.

Massachusetts courts used to have a high bar for proof of negligence before these types of slip-and-fall claims could proceed. “As a pedestrian in New England, you should know it snows and the ground is slippery, plowed or not!” Recently the bar has been lowered, however, allowing these types of claims to proceed at a lower threshold of negligence. Not good for the snow plow operator.

Plowing for a private entity is riskier than plowing for a governmental entity because it is harder to sue a public entity and those working for them. However, the shopping mall operator and his contractors are fair game.

Don’t assume your general liability policy covers you for these slip-and-fall claims. Many contractors’ general liability policies exclude, by endorsement, snow-plowing operations. In this case, you would need to purchase this coverage separately. Always check with your broker to see if you are covered!

At Cleary, we will evaluate your business exposures and work with you to develop a comprehensive plan to safeguard your business. Give us a call today at 617-723-0700.

Seeking Tax Nirvana in 2013

Presented by John B. Steiger, ChFC, AEP Certified Financial Planner ™

If we had to give 2012 a name, we could probably call it the Year of Uncertainty. The upcoming U.S. presidential elections, the pending fiscal cliff, and the ongoing economic issues in the eurozone have combined to make investors more concerned about their future financial plans than perhaps ever before. And one of their biggest worries is taxes.

Although we are currently enjoying the lowest income tax rates in 20 years and the lowest capital gains rates since World War II, this is about to change. Working with your financial and tax advisors to develop a tax-diversified approach to your portfolio may be the best way to navigate the current environment. Let’s take a closer look at the upcoming changes and potential solutions for addressing them.

Recent developments

Starting in 2013, the 2010 Patient Protection and Affordable Care Act will increase taxes for high-income taxpayers, including estates and trusts. The increases will come in the form of two new taxes:

  1. Medicare Hospital Insurance (HI) payroll tax increase of 0.9 percent
  2. New 3.8-percent surtax on most investment income

With the Supreme Court upholding of the health care act, it is very likely that these two taxes will indeed go into effect.

In addition, federal income, capital gain, gift, and estate tax rates are scheduled to increase for all taxpayers in the upcoming tax year, unless Congress acts to extend the Bush-era tax cuts. Dividends will return to ordinary income rates as high as 43.4 percent, and long-term capital gains may be taxed as high as 23.8 percent.

There are some taxes that are not scheduled to change, though. Taxpayers exposed to the Alternative Minimum Tax (AMT) will continue to find it hard to take advantage of tax planning strategies. Most tax deductions allowed under the regular tax calculation are ignored under AMT, and income normally excluded from taxes may be added back into AMT income.

What is this new investment income surtax?

The new investment income surtax (aka health care surtax) affects taxpayers with wages and net earnings above $200,000 (single), $250,000 (married filing jointly), or $125,000 (married filing separately). For trusts and estates, the threshold is based on the dollar amount at which the 39.6-percent marginal tax bracket begins for these entities (approximately $12,000).

The following types of investment income will be affected:

• Taxable interest
• Capital gains
• Dividends
• Nonqualified annuity distributions
• Royalties
• Rental income

The following income is exempt from the new surtax:

• Distributions from retirement accounts (e.g., pensions, 401(k)s, and IRAs)
• Income generated from municipal bonds
• Social security
• Income from a trade or business
• Income subject to the passive activity rules
• Self-employment income

The sale of a home could trigger the tax, but only the proceeds in excess of the personal residence exclusion would be taxed. For qualified individuals, the exclusion protects the seller from taxes up to $250,000 of gain; for married couples filing jointly, the exclusion applies to a gain of up to $500,000.

Calculating the tax

For individuals, the 3.8-percent health care surtax is applied to the lesser of net investment income or the excess of modified adjusted gross income (MAGI) over the applicable threshold.

For example, Mark and Sue Taxpayer have earnings from wages of $175,000 and investment earnings of $100,000, for a total MAGI of $275,000. According to the rule, the 3.8-percent surtax is applied to the lesser of $100,000 (net investment income) or $25,000 (excess MAGI over the $250,000 threshold for married filing jointly). In Mark and Sue’s case, only $25,000 of their investment income is subject to the health care surtax. The entire $100,000 of net investment income is subject to either capital gains or ordinary income tax, depending on the nature of the income.

Invest in tax-exempt municipal bonds

These investments may become more attractive because the interest they generate is not subject to the 3.8-percent health care surtax; it is also generally exempt from federal tax and from state tax for residents living in the issuing state. Keep in mind that although private activity municipal bonds are tax-exempt for regular federal taxes, they are subject to AMT; an individual who otherwise pays little or no tax has a tax liability under AMT.

When working with an advisor to determine whether tax-exempt bonds have a place in your portfolio, don’t let the desire to avoid taxes lead you to an asset allocation that’s inappropriate for your financial situation and objectives.

If liquidity prior to maturity is a concern, be aware that rising interest rates typically cause bond prices to fall.

Even if interest rates remain low, investors reacting to financial headlines can engage in indiscriminate selling and cause bond prices to plummet.

Consider converting to a Roth IRA

Distributions from retirement accounts and IRAs are not subject to the 3.8-percent health care surtax. Assets in traditional IRAs and employer-sponsored retirement plans generally grow tax-deferred until they are withdrawn; in the case of Roth IRAs, however, qualified distributions are tax-free.

Should you invest in a traditional IRA or a Roth IRA? Although distributions from retirement plans are exempt from the surtax, they may increase ordinary income above the high-income thresholds. This would result in other investment or earned income becoming subject to the tax. Therefore, you should consider converting traditional IRAs to Roth IRAs in 2012. Paying taxes on the conversion sooner may allow future distributions to escape the scheduled tax increases later. This only makes sense if you can pay the tax with money from outside the IRA.

Roth conversion. If you decide that a Roth conversion makes sense, keep in mind that you have until October 15, 2013, to recharacterize an IRA converted in 2012. If you have several Roth accounts and the value of one goes down, you can recharacterize that account and avoid paying unnecessary taxes.

Purchase life insurance or annuities

These types of tax-deferred investments can still make sense, even though their distributions may be subject to the new investment surtax. Although distributions from life insurance and annuities are taxed at higher ordinary income tax rates, the benefit of long-term tax deferral can offset the higher rates. The taxpayer’s holding period will be critical to this decision. For example, if you defer $100,000 today and expect your tax rate to increase from 35 percent to 43 percent, assuming a growth rate of 6 percent, it will take almost six years to break even; the higher the assumed growth rate, the earlier the break-even year.

Cash value life insurance. This may be particularly attractive to individuals age 40 and younger, mainly because they may have time to maximize the benefits of tax deferral. It has the additional advantage of providing a death benefit that is substantially higher than the account value. Life insurance distributions taken as loans and withdrawals of basis are potentially tax-free if managed properly. Remember that loans and withdrawals generally reduce the death benefit for the family, may decrease guarantees, and can increase the risk of a policy lapse.

Analyze existing stocks and mutual funds

Portfolios of stocks and mutual funds can also be managed to take advantage of tax-deferral opportunities.

Consider making your portfolio more tax-efficient by taking a long-term perspective, investing in funds with low turnovers, and harvesting tax losses.

Holding bonds in retirement vehicles and keeping stocks in taxable accounts are additional ways to take advantage of these investments’ tax profiles.

Oil and gas investments can also make sense for some (Keep in mind that specific suitability requirements may apply.); the right deal may enable large write-offs of intangible drilling costs in early years and benefit from depletion allowances in later years.

Achieving tax diversification

Just as a portfolio can be overly concentrated in a single stock position, it can also be overly weighted in assets with the same tax characteristics. Retirees are better positioned if they enter retirement with portfolios that are tax-diversified; diversification can help middle-income retirees stay under the investment surtax threshold and reduce how much of their social security benefits are taxed. With an optimum mix of investments—taxable, tax-deferred, and tax-free—you may end up with the highest after-tax yield.

Commonwealth Financial Network® does not provide legal or tax advice.

Diversification does not assure a profit or protect against loss in declining markets, and diversification cannot guarantee that any objective or goal will be achieved.

For Registered Representatives: John B. Steiger is a financial consultant located at 460 Totten Pond Road Suite 600 Waltham, MA 02451. He offers securities and advisory services as a Registered Representative and Investment Adviser Representative of Commonwealth Financial Network®, Member FINRA/SIPC. John can be reached at 781.547.5621 or at

© 2012 Commonwealth Financial Network®

At Cleary, we are committed to a holistic approach of protecting and preserving our clients’ financial assets. Give us a call today at 617-723-0700 and let us know how we can help you.

Lessons from Superstorm Sandy

Superstorm Sandy was a catastrophic event by any measure. The damage inflicted on New York City and the surrounding coastal communities was unprecedented. Insured losses are estimated to total between $20 billion and $25 billion. The impact of the storm was tragic but also serves as a reminder for both insurance coverage issues and emergency preparedness.

Flooding was a significant source of damage from Sandy. Unfortunately, it is estimated that 70 percent of individuals and businesses located within the flood zones did not carry flood coverage. Loss due to flooding is not automatically covered under commercial property insurance, but most policies have the ability to add flood as a covered peril. For properties located in or adjacent to a flood zone, coverage is available through the National Flood Insurance Program (NFIP) through a separate policy. The following link provides additional information on the NFIP and includes a Flood Risk Profile you can use to assess your location:

Business Interruption claims comprise much of the insurance loss sustained due to Sandy. A 13-foot storm surge struck lower Manhattan, causing widespread damage to infrastructure and office buildings. Many firms were unable to access their office locations and some continue to be displaced months later.

Business Interruption coverage indemnifies the policyholder for the loss of earnings resulting from a covered property loss. Business Interruption insurance should provide coverage for lost profit and continuing expenses a business incurs due to the temporary closure of the business as a result of the event. Flood needs to be a covered peril in order for your insurance to respond to a business interruption directly caused by a storm surge. Extra Expense is commonly included with Business Interruption coverage and would respond to reasonable additional costs a business incurs to keep operating. An example of an extra expense would be the additional cost to rent a temporary office in order to continue operations.

Property policies will typically include a number of additional coverages that could also respond to an event such as Sandy. These coverages generally have specific limits assigned to them, but you often have the flexibility to increase the coverage.

Civil Authority coverage applies when a location’s access is restricted due to an evacuation order from the government. This coverage can apply if your location is within the restricted area even if you do not sustain a direct physical loss. The coverage will frequently have a specific time period or limit that will apply.

Utility Services coverage can provide for direct damage or business interruption due to loss of electrical, water, or communications services. There are limitations based on how and where the utility services are interrupted. Coverage almost always has a specific limit assigned to it and may include restrictions such as excluding loss due to “overhead transmission lines.”

Property Insurance may include coverage for Ingress or Egress. After Sandy, many workers were unable to return to their offices due to damage to surrounding streets as well as reduction of access to commuting options. Ingress/Egress can provide some coverage for this type of exposure but may include limitations on location and source of the restriction. The restriction would have to be triggered by a covered peril.

Dependent Business Interruption can provide coverage due to a loss suffered by a key customer or supplier. The loss needs to be triggered by a covered peril, and the coverage will have a specific limit. Businesses that rely on a key supplier or customer should evaluate this coverage carefully.

Disaster planning is an important component of a risk-management plan for any business. Many businesses are able to continue operations by working remotely, but it takes advance planning and attention to infrastructure in order to be successful. There are many sources to assist you with developing a disaster plan for your business. FEMA’s link for businesses is Many insurance carriers can also provide guidance and tools to assist with the process.

Superstorm Sandy proved that a large storm can have far-ranging impact beyond properties located on the waterfront. Even businesses located in high-rise buildings are not immune to losses sustained due to flooding. The storm had many tragic consequences, but it also provided valuable lessons for evaluating both your insurance and business continuity plans.

At Cleary, we will evaluate your business exposures and work with you to develop a comprehensive plan to safeguard your business. Give us a call today at 617-723-0700.

MetLife Releases Tenth Annual Survey of Employee Benefits Trends

MetLife, the well-known insurance and financial services company, has released its Tenth Annual Survey of Employee Benefits Trends. The survey, conducted in the fall of 2011, included the results of 1,519 interviews with benefits decision makers at companies with staff sizes of at least two employees, as well as 1,412 interviews with full-time adult employees age 21 or older, nationwide.


Among the key findings of the survey:

  • More than half — 52 percent — of employee’s ages 21 to 30 are very worried about running out of money in retirement. This is a significant increase from 2003, when only 33 percent of employees in this age range expressed the same worry. This indicates how heavily the more difficult economic environment has been weighing on younger workers.
  • Workers are less focused on savings growth now and more focused on creating a reliable income stream compared to survey participants ten years ago. This indicates that annuities may have more of a place in employee retirement plans than they did in prior years.
  • Voluntary benefits — funded via payroll deductions — are much more prominent now, with tremendous growth at smaller employers. In 2003, voluntary payroll-deduction plans were primarily found at large employers. Now even very small employers are increasingly offering these plans as employee benefits.
  • There is a strong correlation between satisfaction with benefits and overall job satisfaction. It is very uncommon for employees to report being satisfied with their jobs while being unsatisfied with their benefits packages, and vice versa.
  • The vast majority of employers — 70 percent — plan to maintain or improve their benefits packages, despite the comparatively weak economy. Thirty percent anticipated doing so by increasing employee costs, however.
  • Forty-one percent of employers report that voluntary benefits are a significant part of their employee-retention strategy. This is a significant increase from the 32 percent that reported the same a year ago.
  • Employees are more appreciative of the value of their benefits packages than they were in years past.

Some of the survey’s findings indicated challenges for today’s employers. Overall, employee loyalty to current employers was lower than it has been for seven years, and fully one-third of employees were hoping to be working somewhere else within a year. Younger employees were significantly more likely than older employees to report wanting to jump ship. In part, this is because 60 percent of companies did in fact reduce head count during the recent economic downturn. Younger employees may have little experience in the workplace beyond this last period of austerity, when companies were actively slashing payrolls, increasing workloads for remaining employees, and cutting benefits.

That said, younger employees are looking more to employee benefit packages to help them achieve their financial objectives than their older cohorts did at the same age.

Workers also rely on their employers even for basic insurance coverages that prior generations routinely bought outside of the workplace. Although their parents bought life and disability insurance at the kitchen table from an agent, over 60 percent of today’s employees get their life insurance coverage and disability coverage through work.

The influx of Generation Y workers, or millennials, now in their 20s, is profoundly affecting the overall employer-employee relationship. These younger workers anticipate more career mobility than their forebears and are less trusting of companies’ commitment to them as workers, perhaps because much of their adult lives has been spent working in an era in which companies were going out of business or cutting back in large numbers. But Generation Y and X workers are more eager for financial education and financial planning services via their employers than previous generations were.

The MetLife survey also found that a significant fraction of employees — 25 percent — were substantially behind in their financial planning objectives. But a recent survey from CreditDonkey indicates that the problem may be even worse than MetLife found: Some 40 percent of Americans don’t have $500 in savings.


Among the most significant findings of the survey was the growth potential in the employer relationships with younger workers. While Generation Y workers are less loyal to their current employers, they are also significantly more likely to value benefits than their forebears were, and more than six in ten reported that they were relying on their employee benefit packages for their long-term financial health. That was true of 55 percent of Generation X workers, 42 percent of younger boomers, and 31 percent of older boomers.

So there is an opportunity there for employees to cement their relationships with younger workers. But they haven’t yet closed the deal.

At Cleary, we know how important a comprehensive benefits package can be to your continued success. Give us a call today at 617-723-0700 and we will work with you to create a plan that meets your business objectives, takes into account state and federal laws, and capitalizes on incentives and innovative solutions now being offered.