Starbucks' app to allow barista tips

Starbucks' new app allows customers to make digital tips for the first time.

NEW YORK (CNNMoney)

The new version of the app, due out March 19, will give customers a choice between no tip, 50 cents, $1 or $2 when checking out. They can add the tip up to two hours after they make the purchase.

Until now, customers using either their mobile phone app or credit or debit cards to pay could not include a tip on their bill. About 10 million customers have already downloaded the Starbucks app, which accounts for about 11% of in-store purchases.

Related: Apple issues fix for security risk

Making payments will also be somewhat easier in the new version. Once the app is open, all a customer will have to do to reach the pay screen is shake the phone, rather than page through the various menus to get to the bar code.

Related: Starbucks baristas must share some tips

Starbucks spokeswoman Linda Mills said the new app is being debuted for iPhones. Other versions, such as those for Android phones, are due out soon.

The Starbucks app, while very popular with customers, caused some negative publicity for the company in January after it was revealed it left customers' passwords open to attack. The company announced a software fix the next day.

First Published: March 12, 2014: 10:36 AM ET

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Big Wall Street bonuses are back

Wall Street bonuses jumped 15% from last year to their highest levels since 2007.

NEW YORK (CNNMoney)

The average bonus per employee in New York City's financial services industry grew by 15% to over $164,000 last year, according to a report from New York State Comptroller Thomas DiNapoli released Wednesday.

Of course, many rainmakers in the business do bring home millions of dollars a year, the bonus pool also includes employees such as secretaries and back office staff that make far less in annual salaries.

But the total bonus pool, which came to $26.7 billion, is the largest since 2007, DiNapoli said. It includes 2013 cash bonuses as well as deferred compensation from prior years.

Wall Street has roared back since the depths of the financial crisis. Shares of Goldman Sachs (GS, Fortune 500), Morgan Stanley (MS, Fortune 500), Bank of America (BAC, Fortune 500), Citigroup (C, Fortune 500) and JPMorgan Chase (JPM, Fortune 500) are well above the lows they hit in March 2009.

But the business has changed. Regulatory reforms since then have led to the shuttering of many once-lucrative trading desks at the big firms.

And banks are still cutting back on the number of workers on their payrolls. DiNapoli said there were 165,000 employees on Wall Street as of December 2013, nearly 13% less than before the market's meltdown.

See also: AIG CEO: 'I'm sorry' for lynching comparison

But before you take out your pitchforks to go occupy Wall Street, it's important to note the tax revenue the sector generates for the city and state of New York.

DiNapoli estimated that New York City collected $3.8 billion in taxes last year from activities directly related to the industry, a 27% bump from the previous year. That was 8.5% of the city's total tax collection.

At the state level, the windfall is even greater: New York took in $10.3 billion from the financial industry last year, or 16% of all state tax revenue.

However, that figure is still down from before the recession, when New York relied on Wall Street for 20% of its tax revenue.

First Published: March 12, 2014: 10:59 AM ET

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4 reasons Russia will keep gas flowing

Germany, Turkey and Poland were the biggest importers of Russian gas in Europe in 2013, according to Gazprom. Russian gas imports account for about 44% of Germany's annual consumption.

LONDON (CNNMoney)

Moscow last interrupted exports to Ukraine and the European Union in January 2009 after failing to agree prices and transit tariffs with Kiev, creating a humanitarian emergency in parts of the Balkans and economic problems in countries such as Hungary and Slovakia.

Roughly half of Europe's gas from Russia is piped through Ukraine.

Ukraine is facing economic turmoil and its new pro-European government is under pressure from Russian troops mobilizing in its southern region of Crimea. It is struggling to pay its bills and owes Russia's Gazprom about $2 billion, arrears that are growing daily.

Gazprom has said it will cancel a discount on gas to Ukraine from April 1, and warned of a repeat of the 2009 crisis unless the debts are paid.

Moscow could also order the taps to be turned off as retaliation for Western sanctions. G7 leaders warned Russia again Wednesday not to annexe Crimea or face "further action, individually and collectively."

But history may not repeat itself. Here are four key reasons why Russia's threat may prove to be empty this time around.

Economy: Russia's weakening economy is heavily reliant on exports of oil and natural gas, with energy accounting for roughly 70% of annual exports. The consequences of a stoppage could be far more devastating to Russia than anyone else.

The Russian government is already forecasting that overall exports will decline by roughly 2% this year, and a gas disruption would make matters worse.

Gazprom's gas exports are worth about $66 billion a year, roughly 13% of total Russian exports of $515 billion. They also account for 5% of tax revenues.

Russia's economy is weaker than it was in 2009. Gross domestic product grew by about 1.3% last year compared to 3.4% in 2012. Many forecasters were expecting a slight upturn in 2014 but the standoff with Ukraine may mean it struggles to grow at all this year, according to some analysts.

Related: Russia paying price for Ukraine crisis

Warmer weather: Spring has sprung. As the weather gets warmer, demand for natural gas to heat homes wanes.

Officials know any disruption to natural gas supplies would not have the same impact as in 2009 when supplies were cut in the middle of winter.

Eurasia Group's Russian energy analyst Emily Stromquist expects that if Russia were to cut supplies, the disruption wouldn't come until April, when a new natural gas contract with Ukraine is due to be signed.

Natural gas stockpiles: A warmer winter in Europe has allowed countries to build their reserves of natural gas, leaving them better able to cope with any short-term supply disruption.

Oswald Clint, a senior analyst at Sanford Bernstein, estimates that if Russia halted gas exports right now, European inventories would keep the region going for over a month -- more than double the length of the 2009 outage.

The latest data from Gas Infrastructure Europe, which represents pipeline operators, shows stockpiles are roughly 47% of total capacity, higher than at the same time over the previous three years.

Related: Why Europe will balk at Russian sanctions

The threat of shale gas: European leaders are already looking to reduce their dependency on Russian energy by developing alternative sources such as shale gas.

And while the shale gas industry is still in its infancy, any further disruption to Russian supplies would simply give impetus to energy diversification efforts and boost the strong growth projected over the next decade.

"It would be counterproductive to Russia in the long run because it would encourage other countries to wean themselves from Russian gas," said Pavel Molchanov, an energy analyst at Raymond James.

"Gazprom is a huge cash cow for the Russian government. If in five to 10 years, eastern Europe no longer needs to buy as much natural gas from Russia as they do now, Russia will suffer in the long run," said Molchanov.

First Published: March 12, 2014: 11:01 AM ET

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Once bankrupt, Vallejo still can't afford its pricey pensions

The Vallejo police force, shown at a crime scene last year, remains "woefully understaffed" several years after bankruptcy, according to City Manager Dan Keen.

NEW YORK (CNNMoney)

The main culprit: Ballooning pension costs, which will hit more than $14 million this year, a nearly 40% increase from two years ago.

Amid threats of legal action from the state's pension giant, CalPERS, Vallejo did little during its nearly three-year stint in bankruptcy to stem the growth in its pension bills.

As a result, Vallejo continues to dole out large sums of money for retirees. Except for new hires, Vallejo's police and firefighters can retire at age 50 with as much as 90% of their salary -- for life. Public safety workers who retired in the last five years have average annual pensions of more than $101,000.

And the pension costs are expected to continue to rise, with a projected increase of up to 42% over the next five years.

Related: Detroit retirees sound off on possible pension cut

Moody's recently warned that Vallejo's pension obligations could force it to file for bankruptcy protection a second time. The credit rating agency said the city offers a cautionary tale for two other California cities teetering on the brink: San Bernardino and Stockton.

Vallejo City Manager Dan Keen counters that the city's financial position isn't as bleak as Moody's says. He said the city is in a much "better place" than when it filed for bankruptcy, in part due to a 1% sales tax hike that is funding new city services, like the installation of new surveillance cameras aimed at improving public safety.

In addition, employee concessions, such as a 5% pay cut for police, will allow the city to fill this year's projected $5.2 million budget shortfall, he said.

Still, Keen said pension costs are a major concern.

"If we don't resolve those costs, then we're going to see services continue to suffer," said Keen, who has led the city since 2012. "We're going to have to cut somewhere."

A lot of cuts have already been made.

Vallejo's roads are littered with potholes. Three of its nine fire stations remain closed. And its police force is down by almost 40% -- though Keen says there are plans to hire more officers this year.

Crime has surged, with more than two dozen homicides last year, compared to only seven in 2006. Burglaries are also on the rise. Residents maintain neighborhood watch groups, but the crime is taking a toll.

"Some people in my neighborhood are voting with their feet and leaving Vallejo," resident Russell Zellers wrote in a 2013 letter to City Hall. "If things continue along the present course, I may not be far behind them."

Related: Retired union workers facing 'unprecedented' pension cuts

In the fatter years, Vallejo enjoyed a housing boom like many California cities. Flush with property tax revenues, city leaders approved increases in salaries and benefits for city workers. Police officers and firefighters were earning six-figure salaries, even before overtime.

As costs grew, city officials began dipping into the city's cash reserves to pay the bills. Then, in May 2008, after a wave of foreclosures caused property tax revenue to plummet, the city could no longer afford the generous salaries and other benefits it was paying and was forced to file for bankruptcy.

To help cut its debt, the city slashed retiree health benefits and the interest payments it paid to banks. It also cut pension benefits for new hires and raised the amount current workers must contribute to their pensions. But it did not attempt to cut pension benefits for current workers and retirees, a move that can only be attempted during bankruptcy.

In its report, Moody's blamed the state's pension giant CalPERS for Vallejo's lack of action.

CalPERS, which manages $277 billion in retirement assets for more than 1.6 million workers and retirees, has repeatedly argued that pension benefits are protected by California law. It says it is an "arm of the state" and should therefore be exempt from bankruptcy proceedings -- meaning it should get paid in full while other creditors could get pennies on the dollar.

Workers and retirees say their pensions were promised through employment contracts and they shouldn't be penalized for the city's bad planning.

Related: Pensions ask retirees to pay back tens of thousands

So far, no bankrupt California city has ever challenged CalPERS over pension cuts. CalPERS did not respond to a request for comment.

Vallejo's bankruptcy was likely only a short-term fix to its financial problems, said Michael Sweet, a California-based bankruptcy attorney at Fox Rothschild LLP.

"The problem will continue to fester until people face up to the fact that the money available is less than promises made," he said.

First Published: March 10, 2014: 10:37 AM ET

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Fixing the holes in your 401(k)

Employer-sponsored retirement plans are getting better, but they've still got plenty of holes. Here's how to plug them.

NEW YORK (Money Magazine)

Still, shortcomings remain. And some of the fixes that have improved the overall system may actually be impeding your progress.

"You've got be careful," says Rick Meigs, who runs 401khelpcenter.com, an industry website that tracks trends in the retirement marketplace. "There are always unintended consequences."

In the stories that follow you'll learn the various ways that your plan is letting you down. More important, you'll find out how to make the best out of a savings tool that -- holes and all -- is still likely to be your best bet at being able to fund a pleasant and prosperous retirement.

Leak No. 1: Auto-enrollment is a double-edged sword

The push to enroll employees in 401(k)s automatically has generally been praised -- for good reason. Participation rose from 67% in 2005, before these programs began, to 78%, as young workers have been swept into the system. But for long-time savers, auto-enrollment cuts a different way.

Related: How does a 401(k) plan work?

Most companies set aside a fixed pot of money for 401(k) matches and other benefits. As the pool of eligible employees grows, firms can either set aside more or cut the size of the benefits. It's too early to tell how companies will respond in the long run, but a study affiliated with the Boston College Center for Retirement Research found that plans without this feature matched 3.5%, vs. 3.2% for auto-enroll plans.

Calculator: How fast will my savings grow?

Another unintended consequence: Many plans default workers in at a meager 3% savings rate, in part to avoid scaring off new participants. You know that's too little. What you may not realize, though, is that a low default rate for newbies can help "frame" what even experienced hands think is an adequate level of saving. In auto-enroll 401(k)s, those making more than $100,000 sock away 9.3% of their pay, vs. 10.7% for highly paid workers who aren't in such plans.

"People look at the 3% and think, 'That's what the company is recommending. So if I'm saving twice as much, that must be a good thing,' " says Rob Austin, director of retirement research at the benefits consultant Aon Hewitt. Yet even three times the default is probably insufficient, as many planners advise socking away 15% of your pay, including the match.

WHAT TO DO

Make automation work for you. Two in five auto-enroll plans offer a different automated function -- one that boosts your contribution rate over time unless you opt out, according to the Plan Sponsor Council of America. If yours doesn't, you may still be able to opt in to such a tool. Even if you think you're disciplined enough to make these adjustments yourself, sign up just in case.

Bank your raises as you go. At the same time some businesses are cutting their match, many are restoring bonuses and raises. Commit to saving at least a portion of those pay hikes before you get them, says Shlomo Benartzi, chief behavioral economist at AllianzGI.

"People tend to feel the pain of losses more than the pleasure of gains," he says. In this context, money "lost" to savings "feels like a loss." But that won't be the case if you sock the raise away before you ever have a chance to enjoy it.

Is your 401(k) plan letting you down?

Fees: Still paying too much?
Advice could come at a cost
Too few index funds to choose from
401(k) waiting periods take a toll
Company stock is still a problem

First Published: March 10, 2014: 10:34 AM ET

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Invest $1 million, try for a U.S. green card

NEW YORK (CNNMoney)

Patel is here on an investor immigrant visa -- a controversial program that gives a green card to any foreigner who invests at least $500,000 and creates 10 jobs in the United States.

Next March, he'll have to go before immigration officials and prove he's created the 10 positions or he risks losing the temporary green card he was granted last year.

"The worst-case scenario is I leave," said Patel, 40, who's based in Dallas but originally from the UK. "I guess I could always sell the company."

The investor immigrant visa (officially known as EB-5) has been around since 1990 but has expanded rapidly in the last few years. Over 6,600 visas were issued under it in 2012, according to a recent Brookings Institution report. That's up from just 800 in 2007.

Related: Canada kills investor visa popular with Chinese

Its popularity seems to be driven by an increasing number of wealthy foreigners looking to move to the United States, as well as more people promoting the program abroad, according to Brookings.

But despite its popularity, the program has plenty of critics, especially those who see it as a way for the global elite to buy U.S. citizenship.

Even those who support it think there's too much red tape and believe parts of it are mismanaged to the point of fraud.

Much of the criticism is leveled at a separate part of the program that allows investment in regional economic development funds. There, private entities control and invest the money, with the visa applicant often having little idea of where the money goes -- though they still have to prove they've created jobs.

These private entities have been accused of ripping off investors, and both Brookings and an inspector general's report from the Department of Homeland Security, which oversees the program, recommend substantial management changes.

Most program participants choose this passive investment method, but not Patel.

"I'd have to trust my money to strangers and hope for a return," he said. Instead, he decided to start his own company.

Related: 3,000 Americans ditch their passports

The snack business wasn't new to Patel. After graduating from Babson's MBA program in 2002, he got a job at Stacy's -- then an upstart Boston snack maker. Four years later, Stacy's was bought by Frito Lay for an undisclosed amount. As CFO, Patel paid over a million dollars in taxes that year.

But without a job, Patel couldn't stay in the country.

"There's no visa to just stay in the United States and spend money," he said. So he went back to his native England, where he stayed for four years.

But he quickly realized he wanted to return to the United States.

In 2008, he attended a trade fair in Chicago where food makers were looking for marketers to sell their product. He considered fragrances and powdered drinks before settling on peanuts.

"I thought the category was kind of sleepy," he said. "There wasn't really a strong, fun, branded presence."

In 2011 he launched his brand -- Lord Nut Levington, which has six kinds of flavored peanuts that are sold in major U.S. supermarkets. This April, he'll be featured on ABC's show "Shark Tank."

He has two full-time employees -- an accountant and a marketing chief. Together, they handle product development, marketing and the finances. Everything else -- manufacturing, sales, etc. -- is handled by outside firms.

But Patel is frustrated with the investor visa program. There doesn't appear to be any leeway with his March 2015 deadline to create eight more jobs. And while the government does take indirect jobs into account, there's no way to measure that in advance. And it does not distinguish between minimum wage jobs and his two professional-level positions.

He may hire more people just to meet the requirement, but that would be a burden on his company -- which has yet to turn a profit.

"Maybe I should have opened a cleaning business," he said.

First Published: March 10, 2014: 10:39 AM ET

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GM raising Corvette prices

NEW YORK (CNNMoney)

The base price of the sports car just went up by $2,000, going from $51,000 to $53,000. General Motors (GM, Fortune 500) also increased prices for the Stingray convertible by $2,000. It now costs $58,000.

In addition, the price of the Z51 performance option package went up by $1,200. It now costs $4,000. The Z51 package adds larger wheels, performance tires and special aerodynamic features, among other things.

Gallery - Driving the new Corvette Stingray

"The consumer demand for Stingray has far exceeded our expectations, particularly for the Z51 package," GM spokesman Monte Doran said.

Days-to-turn, an industry term for the average amount of time a car sits on a dealer lot before going to a customer, is seven days for the Corvette, Doran said. The industry average is about 60 days.

The Corvette was completely redesigned for the 2014 model year and has won a number of awards, including Automobile Magazine's Automobile of the Year. The two-seat sports car is powered by a 455-horsepower V8 engine.

First Published: March 7, 2014: 5:40 PM ET

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