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  #1331  
Old 10-02-2017, 06:08 PM
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Mary Pat Campbell
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NEW JERSEY

http://www.njspotlight.com/stories/1...-own-pensions/
Quote:
TOP DEMOCRATIC LEADERS WANT COPS, FIREFIGHTERS TO MANAGE THEIR OWN PENSIONS
JOHN REITMEYER | OCTOBER 2, 2017
Sweeney, Prieto gear up for another push to create new board for PFRS — the Police and Firemen’s Retirement System



Spoiler:
Frustrated by state government’s handling of the New Jersey public-employee pension system, police officers and firefighters launched a major push earlier this year to gain more control over how their own retirement funds are managed. The effort won broad support in the Legislature from both Republicans and Democrats, but ultimately hit a road block when Gov. Chris Christie rejected their favored legislation.

But now Democratic legislative leaders say they’re preparing to breathe new life into the legislation, seeking to create a new board of trustees to manage the New Jersey Police and Firemen’s Retirement System (PFRS), eyeing early next year for the bill’s reintroduction.

Senate President Stephen Sweeney, the PFRS bill’s primary sponsor, announced the plan to reintroduce the legislation during a recent firefighters’ convention in Atlantic City, and Assembly Speaker Vince Prieto, the sponsor of the PFRS legislation in the lower house, said soon after that he’s also ready to try again in early 2018.

The legislative leaders’ new timeline conveniently coincides with Christie’s pending exit from the State House in January. It also means Sweeney and Prieto have decided not to try to override the Republican governor, something they’ve never been able to do successfully since Christie took office in early 2010, thanks largely to GOP lawmakers who’ve stayed loyal to the governor — even on bills that have received veto-proof majorities, like the PFRS legislation.

No slam dunk
Yet just because the new plan for the bill guarantees Christie will no longer be the main obstacle to passing it, that doesn’t mean its enactment in 2018 is going to be a slam dunk. That’s because the two leading candidates in this year’s gubernatorial election — even as they’ve been feuding over what to do about a key property tax reform that impacts police officer and firefighter salaries — have both yet to endorse the PFRS bill that failed to win Christie’s signature back in May.

Introduced by Sweeney (http://www.njspotlight.com/stories/1...ployee-system/) last February, the PFRS bill was strongly supported by New Jersey’s police officer and firefighter unions as a logical response to their members’ growing frustration with the threat that the state’s chronic underfunding of the public-employee pension system has posed to their retirement accounts. The measure also emerged as the public-safety unions and other labor groups were groaning about the performance of investments managed by the state Division of Investment following the Great Recession, under policies set by the New Jersey State Investment Council.

Building a board
Sweeney’s legislation called for the creation of a new, 12-member board to oversee the PFRS, with seven members representing the interests of police officers and firefighters, and five representing the interests of state, county, and municipal-government employers. The proposed PFRS board would also take over management of the retirement fund from the state, getting the power to hire its own executive director, actuary, chief investment officer, and ombudsman. Decisions related to pension contributions would also fall to the new board under the version of the bill that breezed through the Legislature earlier this year.

In fact, the measure won widespread support from both Republicans and Democrats in both houses of the Legislature when it was sent by lawmakers to Christie’s desk near the end of March.

But the bill was not universally supported, and representatives of the New Jersey League of Municipalities and the New Jersey Association of Counties argued that it would have given too much power to the unions at the expense of taxpayers, who already foot a larger percentage of the overall pension obligation. They also raised concerns that if the new board’s investment decisions soured, it would be up to taxpayers to bail out the PFRS.

Christie, a two-term Republican, ultimately issued a conditional veto in May that didn’t dismiss the idea outright, but offered up a series of conditions that would have to be met in order to win his approval.

Christie’s conditions
For example, he suggested the proposed PFRS board be expanded to a 14-member panel, with equal representation among the unions and government employers. He also insisted that in exchange for gaining more control over their retirement fund the police officers and firefighters should be forced to accept a cap of $7,500 on unused vacation and sick time. In the wake of Christie’s conditional veto, both Sweeney and Prieto expressed disappointment — and even though the PFRS measure passed both houses with more than enough votes from both Democrats and Republicans to sustain a gubernatorial veto — the two Democratic leaders ultimately decided not to attempt an override.

Sweeney’s strategy
Sweeney (D-Gloucester) divulged his plan to reintroduce the bill late last month during the firefighters’ convention, telling attendees he still considers the bill to be a “model for public pension systems that have been systematically underfunded by entities controlled by governors and state treasurers.” In response, Eddie Donnelly, president of the New Jersey Firefighters Mutual Benevolent Association, said he’s on board with Sweeney’s new strategy.

“For far too long the voices of the stakeholders, the men and women that trust their dollars to the PFRS, and rely on them for retirement security, have been silenced when it comes to how their savings should be managed and invested,” Donnelly said. “Senate President Sweeney has been a welcome partner in our efforts to change this, and we are glad that this thoroughly researched and vetted bill will remain a top priority in the new Legislature.”

Sweeney, who is up for reelection this year, has also received endorsements from both the state Policemen’s Benevolent Association and the state Fraternal Order of Police since making the announcement.

Prieto committed to plan
Meanwhile, Prieto, the Assembly leader who also enjoys strong backing from the state’s public-sector unions, told NJ Spotlight last week that he’s also committed to getting the PFRS bill passed in early 2018.

“I will absolutely be posting this legislation again and give it another chance,” said Prieto (D-Hudson).

But what will happen next is still not clear, even with the upcoming changeover in the governor’s office.

A spokesman for Democrat Phil Murphy, the gubernatorial contest’s current frontrunner, said Murphy recognizes the concerns of the police officers and firefighters, and added “the state has simply not lived up to its end of the bargain.” But Murphy spokesman Derek Roseman did not respond when asked if the candidate is fully committed to signing the current PFRS bill.

“Phil supports efforts to protect our pension system while providing safeguards for taxpayers,” Roseman said.

And while Guadagno’s campaign website indicates she supports the idea of transferring management of police officer and firefighter pension funds over to a new entity, her campaign spokesman, Ricky Diaz, also declined to give a full endorsement of the current version of the PFRS bill.

“She believes the bill had merit, and she’s confident a version can pass with tweaks that provides accountability and also protects taxpayers,” Diaz said.




http://www.njspotlight.com/stories/1...blem-is-large/
Quote:
BUDGET BASICS: EMPLOYEE RETIREMENT BENEFITS — THE PROBLEM IS LARGE
A series that details the fundamentals of New Jersey's budget, as well as its current budget woes
This is the seventh in a 10-part series outlining New Jersey’s fiscal fundamentals. The goal is to demystify some of the state’s financial challenges, and put them in context of the broader issues New Jersey faces. This series is also intended as a way to underscore the importance of state government in a year that will see a new governor and a new Legislature chosen by voters. Follow this link to see the other stories in this series.
Spoiler:

Background
Most state employees are enrolled in state-sponsored defined-benefit pension systems. Unlike defined contributions plans —like 401(k)s — in these systems employees and employers make annual contributions and the employees are promised a specific pension amount based on years of service and salary level. The employee contribution is specified as a percentage of their salary, the employer contributions are annually determined by actuaries based on the earnings of pension investments and the characteristics of the workforce.
The state sponsors seven different defined-benefit pension systems for public employees. As a result of (1) lower than required annual appropriations by the state for an extended period of time, (2) lower than expected investment earnings, and (3) benefit enhancements enacted in 2001, the financial condition of the pension funds have significantly deteriorated — and absent action by the state will soon be depleted.
Information indicating the state has a net pension liability of $115 billion (based on accepted GASB 67/68 disclosure standards) is alarming enough, but misses the point. The state’s October 2017 bond prospectus indicates that if current trends continue, one of the major systems (teachers pension) will be depleted of all assets within 12 years and another major system (judges) in five years.
In addition, the unfunded future liability for retiree health benefits is $69.3 billion — or a total of $184.3 billion. This is more than five times the state’s total bonded debt of $35 billion.
Each year the state’s independent actuary determines how much money the state should appropriate to fund properly the systems — assuming certain investment returns, a level of contribution by employees, and the projection of future costs. But for many years the state failed to appropriate the required amount — in some years the appropriation was zero.
The state also contributes to the retirement program — a 401(k)-type system — for professors and other employees at the state colleges and universities( 8 percent of base pay), and the state pays for their group life insurance and long-term disability — in fiscal year 2017, $170 million was appropriated.
One could write extensively about this history and enumerate the bad actors, but that is not the goal of this article. Rather, one needs to understand the dimensions of the current problem, and what actions could be taken to address the underfunding.
Key Points to Be Recognized
Four points need to be recognized to understand fully the issue of employee benefits and its effect on current and future budgets:
1) As noted, the state also pays all or a major portion of health benefits for retirees. But, unlike pensions, no dollars have been set aside for future commitments; rather future payments are on a “pay-a-you-go” basis.’ The unfunded liability of future health benefits is $69.3 billion.
The state previously pre-funded future health benefits, but this was discontinued in 1995. In 2002, all existing funds — totaling $450 million — were taken from the fund and used to balance the budget.
2) The state pays the school districts’ share of pension contributions and post-retirement health benefit for all K-12 teachers. The current payments for both are $3.1 billion. In addition, the state pays the school-district share for Social Security — $758 million in the current year.
Almost $4 billion of state payments are made each year on behalf of local school districts. Absent these appropriations, property taxes would increase.
3) The state also administers the pension funds for municipalities. But except for a small amount of state support of approximately $110 million, local municipalities provide funds from local budgets. Furthermore, unlike the state systems the local systems are better funded — at 77 percent — and for the past eight years the full required contributions were made. Curiously, the state “requires” the municipalities and counties to fund their system, while failing to fund its own systems. Further, the local systems would now be 100 percent funded if the Legislature and governor had not directed the local governments to underfund their systems during a five-year period to minimize property-tax growth.
4) Dating back to 2005, there have been numerous changes to the pension and health-benefits systems to reduce costs, long-term liabilities, and benefits for employee. For example, the age for full benefits was increased to 65 — early retirements to age 62 (with penalty); the funding calculation factor was reduced by 9 percent; and cost-of living increases (COLAs) curtailed (until the systems reaches an 80 percent funding level) for all current and future retirees.
Further, employee contributions have been significantly increased from 1.5 percent of salary to a current high of 7.5 percent — based on graduated income. Also, the base for current employee contributions for health benefits was changed. Instead of paying 1.5 percent of salary, the employee now pays a percentage up to 35 percent (based on salary) of the cost of the policy — similar to private industry. Without these expanded employee contributions, the unfunded liability would be materially higher.
In addition to retiree costs -- the state also funds health benefits ($1.3 billion) and the employer’s share of Social Security ($526 million) for the current work force. So, in total, in fiscal 2018 the state will spend over $7 billion (21 percent of the budget) for current and retired employees for pension contributions, health benefits, and social security.
Projections indicate that this amount will increase to approximately 32 percent or higher of the total state budget if all commitments were fully funded.
The Problem Revisited
When the legislature and governor and employees reached an agreement in 2011 to address the retirement-funding problems, it was assumed the problem was solved. Sizable givebacks were made by current and retired employees, including the curtailment of the COLA and a host of other changes (as noted). In return, the state agreed to fund annually an increasing amount over seven years — such that full funding would be achieved.
Unfortunately, the full “annual required contribution” (ARC) was made for only two years as other budgetary pressures and revenue shortfalls limited payments — the state failed to uphold its part of the bargain and fell back to its old practice of underfunding the pension systems.
A recent analysis by J.P. Morgan (May 2016) indicates the cost of meeting all future obligations accrued to date in New Jersey would approach 38 percent of the budget. They suggest one of three solutions would be necessary: sizable (26 percent) increase in taxes; significant (24 percent) reductions in program spending; or a quintupling of contributions by workers. And this would not be a one-time event; it would be kept in place for 30 years.
Is There a Solution?
Most public employees would argue that it is the responsibility of the state to fund properly the pension and health-benefit systems. When employees were hired, these benefits were promised and were part of the hiring agreement. Further, when the systems were underfunded and projected to be in financial trouble, public-employee unions agreed to reduced benefits, and substantial increases in contributions. They were promised the state would make the required payments.
As noted, the state did not fund the agreement. The unions and some legislators have recommended increases in the top income tax rate for millionaires. The estimated effect would be an increase of approximately $600 million — well short of what is required to address the shortfalls with related impacts.
Further, Gov. Chris Christie established the NJ Pension and Health Benefit Study Commission on August 1, 2014 to examine the existing pension and health benefit systems and develop solutions. The reports are extensive and provide detailed information about projected costs and past bad decisions.
In short, the major recommendations are: 1) freeze existing pension plans such so that only benefits earned to date would be retained; 2) initiate a new “cash balance plan” — similar to a 401(k) —for new employees and for those current employees whose existing plans were frozen; 3) align health plans (in other words “reduce” ) to private-sector levels; 4)apply these same changes to local government employees and school teachers; and 5) lock in pension funding with a constitutional amendment. No changes were proposed for existing retirees.
In the fiscal 2018, the Lottery was transferred into the pension system. It is projected that the assets of the Lottery will generate $37 billion in funding over 30 years and provides an immediate increase in the funded ratio.
However, as part of this transfer, approximately $1 billion was reduced from the proposed fiscal year 2018 pension budget. In effect the total fiscal 2018 contribution to the pension system is the same as proposed in the original budget — $2.5 billion. It’s simply being funded in a different manner. The stated benefit is that the pension system now has a predictable flow of monies. But, in fact, in the long run it will only have an impact if the state makes the full required contribution — specifically, to increase appropriations by an additional $2.5 billion — for a total of $5 billion, plus the Lottery proceeds. Current state revenues would suggest this is unlikely. Moody’s Rating Agency indicates that the transfer “does not alter the burden on the state’s credit profile.”
No further actions were taken to address the $67.5 billion of unfunded liabilities associated with retired health benefits.
Final Observation
Problems faced by New Jersey are replicated in many states, but New Jersey’s underfunding problem is at the top of the list. Some states are taking similar actions. For example, Pennsylvania is gradually shifting a portion of pension risks to future employees. Tennessee implemented a hybrid plan for new employees, while Oklahoma moved to a defined-contribution plan for new employees. As noted above, New Jersey has already taken some of these actions and still has a major problem,
The large gap between resources and increasing costs for retirement systems is the largest single fiscal issue facing the state — and has been the root cause for reductions in the state’s bond rating.
Unless significantly more annual monies are paid into the pension systems — or changes such as those proposed by the New Jersey Health Benefit Study Commission are implemented — the pension systems will soon be depleted of all assets. At such time the state will face a constitutional crisis and will have to answer the question, is it required to make annual payment to retirees even if no funds remain in the system — or do retirees receive smaller or no pensions?
The NJ Supreme Court has not specifically opined on this issue, but in several related opinions, including “Burgos v. State” (2015), the wording in the text and in related footnotes suggest that the state has a duty to make the state pension system sound. If ultimately ruled in that manner, the state would face a huge annual and recurring appropriation (at least $10 billion) to meet such requirements. It is critical that the pension issue be addressed in a timely manner.
Richard F. Keevey is the former budget director and comptroller for New Jersey, appointed by two governors from each political party. He was also the CFO for the U.S. Department of Housing and Urban Development and the deputy undersecretary of defense. He is currently a senior policy fellow at the School of Planning and Policy at Rutgers University and a lecturer at the Woodrow Wilson School, Princeton University.


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  #1332  
Old 10-02-2017, 06:09 PM
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NEW YORK

http://nypost.com/2017/10/02/city-is...lity-pensions/
Quote:
City is denying 9/11 first responders disability pensions

Spoiler:
Fire Department paramedics and EMTs who responded to the 9/11 attacks and now suffer from medical illnesses say the city is forgetting about them.

The medical first responders, who are employed by the FDNY, breathed the same toxic air at Ground Zero as firefighters and many have been diagnosed with the same respiratory diseases and cancers.

But sick paramedics and EMTs are denied the more lucrative, three-quarters, tax-free disability pensions at a far higher rate than firefighters, New York City Employees Retirement System records obtained by The Post show.

“It’s a crime what they’re doing to EMTs and paramedics who got sick. It’s a game of attrition,” said Gary Smiley, 53, a retired paramedic with asthma and PTSD, whose disability claim was rejected by NYCERS. “They want you to go away and die.”

While pensions held by paramedics and EMTs are governed by the NYCERS system, firefighters and officers are under the auspices of the FDNY Pension Fund.

The NYCERS board has rejected nearly half of the disability claims filed by EMTs and paramedics — 56 out of 116 over the past year.

By comparison, the FDNY Pension Fund has approved 75 percent of disability claims stemming from the World Trade Center attacks, a spokesman said.

The average disability pension benefits are $75,043, while the average for a regular service pension is $44,659.

Nearly two-thirds of firefighters and officers who retired last year had pensions of more than $100,000, many of them for disabilities.

EMTs whose disability claims have been denied are crying foul, and the state Senate is now investigating the disparity.

Smiley was one of the first paramedics on the scene on 9/11 and became trapped for two hours by the crumbling north tower.

A judge ordered the NYCERS board to reconsider the denial of Smiley’s case. By law, a judge can’t impose a disability payment, because it would overrule recommendations of medical doctors.

NYCERS, Smiley said, denied his disability claim a second time.

EMT Mike Abramowitz, 56, who was also at Ground Zero, was diagnosed with restrictive airway disease and gastroesophageal reflux disease, or GERD.

“I was told I was done. I had to retire,” said Abramowitz, whose claim was denied by NYCERS.

Although denied disability pensions, both men were deemed disabled by the federal government and qualified for Social Security disability assistance, they said.

Asked about the criticisms, NYCERS general counsel Ilyse Sisolak, said, “NYCERS has no comment because it is confidential, since the inquiry pertains to medical conditions of its members.”

Sen. Martin Golden (R-Brooklyn), who chairs the committee that oversees government-worker and pension legislation, is investigating the claimed disparity.

“Why is this happening?” he said. “Why do EMTs have a 50 percent rejection rate There’s something wrong with this picture.”




https://www.usnews.com/news/us/artic...n-bribe-scheme
Quote:
Ex-N.Y. Brokerage Executive Avoids Prison for Pension Bribe Scheme

Spoiler:
NEW YORK (Reuters) - A former managing director at broker-dealer Sterne Agee was sentenced on Friday to six months' home confinement after she pleaded guilty to bribing a former portfolio manager at New York state’s retirement fund in exchange for tens of millions of dollars’ worth of business.

Deborah Kelley, 59, was sentenced by U.S. District Judge Paul Oetken in Manhattan, who also ordered her to pay a $50,000 fine and perform 1,000 hours of community service.

The charge against Kelley emerged from the latest pay-to-play case involving the third-largest U.S. pension fund, following a scandal a decade ago that sent the state comptroller to prison.

The $184.5 billion New York State Common Retirement Fund is the investment arm of the New York State and Local Employees’ Retirement System and the New York State and Local Police and Fire Retirement System.

Kelley said at Friday's hearing before being sentenced that she was "remorseful" for her actions.

"As hard as I try, I cannot understand why I did this," she said. "It was the worst decision of my life."

Oetken said his decision not to give Kelley any prison time was affected by a large number letters supporting her from friends and family.

"There is no question in my mind that Ms. Kelley is a good person who has been a hugely positive force in her family and her community," he said.

Kelley pleaded guilty in May, admitting that between 2014 and 2016, she paid bribes to Navnoor Kang, former director of fixed income and head of portfolio strategy at the Common Retirement Fund.

Oetken said at Friday's hearing that the bribes took the form of paying for two vacations for Kang and his girlfriend, and amounted to about $19,000.

Prosecutors have said that Kang reciprocated by steering state pension business to Kelley’s firm - doing about $156 million in trades with the firm in the fiscal year ending March 1, 2015, and about $179 million in the fiscal year ending March 1, 2016.

Kelley received 35 to 40 percent of the hundreds of thousands of dollars in commissions the firm earned on those trades, according to prosecutors.

Kang was also charged with corruption. He pleaded not guilty in January.



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  #1333  
Old 10-02-2017, 06:09 PM
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Mary Pat Campbell
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OREGON

https://www.seattletimes.com/nation-...-25-3-billion/

Quote:
Oregon’s public pension deficit reaches $25.3 billion

Spoiler:
PORTLAND, Ore. (AP) — A new valuation by the actuary for Oregon’s public pension determined that the system’s deficit has ballooned to $25.3 billion, meaning higher costs will be coming.

The growing deficit will cost schools and local and state government an additional $1.4 billion, according to the valuation by the Milliman Inc. actuarial and consulting firm.


The increase was likely caused in part by the Public Employees Retirement System Board’s decision to lower its assumption of how much it will get from investments from 7.5 percent to 7.2 percent, taking the deficit from $21.8 billion to $25.3 billion by the end of 2016, the Oregonian/Oregon Live reported (http://bit.ly/2yL321V ) Wednesday.

The board has allowed employers to underfund the system by billions of dollars.

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“We’re not paying anywhere close to what we should be paying, and if we did it would absolutely decimate schools,” said Jim Green, executive director of the Oregon School Boards Association.

The additional $530 million school districts will have to pay because of the rising deficit is equivalent to the cost of 2,650 teachers or 11 instructional days.
Local and state governments will be drawing 40 percent of the additional money they will need from state’s general fund, which is speculated to result in a budget deficit in 2019.



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RHODE ISLAND
INVESTMENTS

http://www.thewesterlysun.com/news/b...lgorithms.html
Quote:
R.I. pension fund improves, with a boost from algorithms


Spoiler:
PROVIDENCE — The state employees’ pension fund recorded investment gains of $64.2 million in August, Treasurer Seth Magaziner reported last week, bringing the fund’s value to $8.17 billion.

Magaziner said that the fund’s performance reflects the “Back to Basics” investment strategy he announced a year ago, which is moving the state out of most hedge funds and into more traditional investments that he said were intended to grow when markets are up and provide stability when markets are down.

Some critics of former Treasurer Gina Raimondo, now the governor, have said that under her stewardship the Employee’s Retirement System of Rhode Island became over-reliant on hedge fund investments.
The fund earned 0.79 percent net of fees in August, the treasurer’s office reported, outperforming its own 0.77 percent benchmark and beating a traditional 60 percent stock, 40 percent bond portfolio, which would have delivered a 0.58 percent. “Similarly, the fund’s one-year return (for the year ending on Aug. 31) is 11.27 percent, beating the plan’s benchmark which stands at 10.95 percent and beating by more than 1 percent a 60-40 bond-stock portfolio, which would have returned 10.21.”

The system serves about 60,000 active and retired state employees, judges, the State Police, teachers, and municipal, police and fire employees from participating communities.

Detailed information about the fund’s investment strategy, performance and managers are published online as part of Treasurer Magaziner’s ‘Transparent Treasury’ initiative at: investments.treasury.ri.gov

The website contains a wealth of information about the fund’s asset allocations and cash flow. U.S. public equity such as stocks accounted for 31 percent of the total allocation as of the end of July, with 16.3 percent of that amount in conventionally managed stocks and the remaining 14.8 percent invested under a so-called QVM Tilt. A spokesman for Magaziner explained that the QVM portion “uses algorithms to try to (slightly) outperform the indexes that a typical index fund would only seek to track.”

Such mathematical wizardry is common among hedge funds, which tend to charge hefty fees. “For the purposes of analyzing our portfolio composition there is really no distinction between the QVM and our other stocks,” the spokesman said. In terms of performance, however, there was a significant difference as of July 31, with the QVM (quality, value, momentum) segment showing nearly a 5 percent positive “variance to target” — highest among the 15 investment categories.

The targets are set by the State Investment Commission and apply to a diversified set of assets that range from equity stakes and direct lending to private companies, to real estate, bonds, credit securities, and cash.

The pension system pays out more in benefits than it receives in contributions each year. “Because of this negative cashflow, steady investment returns are particularly important to the system,” the treasurer’s website says. There is considerable variation in the monthly cash flow. The most recent figure, posted for April, was minus $36.4 million, but looking back to 2016, it’s been as low as $52.5 million in June 2016.




https://www.ai-cio.com/news/rhode-is...illion-august/
Quote:
Rhode Island Pension Fund Earns $64.2 Million in August
Despite outperforming its benchmark, the returns were less than half that of July.


Spoiler:
The Employees’ Retirement System of Rhode Island (ERSRI) earned $64.2 million in investment gains during August, bringing the fund’s total asset value to $8.17 billion.
The returns translate to gains of 0.79% net of fees for the month, which outperformed its benchmark of 0.77%, and a 60-40 fund, which would have only returned 0.58%. However, despite the outperformance, the returns were less than half that of what the fund earned the previous month, when it returned 1.7% and added $137 million in asset value.
For August, the total portfolio value increased by approximately $11.8 million, and the $64.2 million in positive investment performance was offset by $52.4 million of transfers to meet pension payroll in excess of pension contributions, according to ERSRI.
The fund’s one-year return for the 12-month period ending on Aug. 31 was 11.27%, which surpassed the plan’s benchmark of 10.95% as well as a 60-40 portfolio, which would have returned 10.21%.
“Our ‘Back to Basics’ investment strategy continues to deliver positive performance for retirees and taxpayers,” said Rhode Island Treasurer Seth Magaziner in a statement. “I am committed to strengthening the state’s finances for all Rhode Islanders and that includes bringing added stability to the state’s pension fund.”
The so-called “Back to Basics” investment strategy, which was unveiled last year, moves the state’s investments out of most hedge funds and into more traditional investments that are designed to grow during bull markets, while providing stability during down markets. Just last week, the Rhode Island General Assembly passed legislation that will create a legal requirement to maintain the investment policy, which also requires investment managers to publicly report fees and performance.
For the calendar year-to-date, the total portfolio has increased by $474.4 million, with net gains of $716.3 million that were offset by $241.9 million in pension payments. The portfolio’s 9.42% net return was below the strategic benchmark of 9.43%, and a 60/40 fund, which would have returned 10.31%. For the fiscal year-to-date, the total portfolio value increased by approximately $129.3 million.
Over a three-year period, the ERSRI portfolio returned 4.98% net of fees, compared with the plan benchmark of 4.84%, and a 60/40 portfolio, which would have earned 4.55%. Over five years, the ERSRI portfolio earned 7.79% net of fees, outperforming the plan’s benchmark of 7.69% and a 60/40 benchmark of 7.21%.
The fund’s assets are allocated 57.6 % in equity, 11.9% in fixed income, 3.3% in cash, and 27.2% in “others,” which includes investments such as real estate credit and absolute return funds.




CRIMINAL OFFICIALS

http://www.providencejournal.com/new...le-for-pension
Quote:
Judiciary says disgraced Judge Ovalles not eligible for pension



Spoiler:
PROVIDENCE, R.I. — Administrators for the state judiciary have determined that embattled District Court Judge Rafael A. Ovalles is not entitled to a pension, a courts spokesman said Friday.

“It’s the Administrative Office of the State Courts position, on the advice of general counsel, that he is not entitled to a pension,” courts spokesman Craig N. Berke said.

Ovalles on Thursday submitted a resignation letter to Gov. Gina M. Raimondo Thursday, saying he will resign effective Oct. 31. He wrote that events over the last few years led him “to conclude that the honorable course of action” was to retire.

Berke said Ovalles’s resignation came after talks between his lawyers and court General Counsel Julie Hamil. He would have had to serve until 2025 to be eligible to receive a pension, Berke said.

It seemed Friday, however, that Ovalles wouldn’t be giving up any benefits without a fight, in what appears to be a matter of first impression in the state.

“Judge Ovalles was an active and contributing member of the State retirement system for over 12 years and will continue to defend his rights to retirement benefits which he is entitled to upon reaching the age of 65. Rhode Island law only allows for the revocation of a pension in the case where a public employee has been convicted of a crime related to employment,” said his lawyer and former Providence Mayor Angel Taveras.


He is facing dismissal for 41 findings of judicial misconduct that included sexually harassing female staff and lawyers, napping on the job and mistreating those who appeared before him. The state Commission on Judicial Tenure and Discipline launched an investigation in 2014 based on two complaints. Over the course of the probe dozens more allegations surfaced.

In early August, the 14-member body of judges and lawyers released a 240-page report detailing persistent mistreatment of those who appeared before Ovalles; sexual degradation of female staff members and lawyers; napping on the job; widespread abusive conduct; and incompetence. It recommended that Ovalles be dismissed.

He was cleared of an allegation that he had his pants off in chambers in the presence of female staff members.

A native of the Dominican Republic, Ovalles, 52, was named to the bench in 2005 by then-Gov. Donald L. Carcieri. District Court Chief Judge Jeanne E. LaFazia relieved Ovalles of his judicial duties in the wake of the investigation, although he continues to receive his $160,018 annual salary.



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Old 10-02-2017, 06:09 PM
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SOUTH CAROLINA
http://www.greenvilleonline.com/stor...tem/715988001/
Quote:
South Carolina can't afford Its state pension system


Spoiler:
The Greenville News reported that Gov. Henry McMaster wants to abolish the state's defined-benefit pension system and replace it with a 401(k)-style plan, making state employees responsible for their own retirement income planning. Generations of future South Carolinians who understand what's at stake are turning cartwheels. I urge you to support this initiative and let your legislators know your feelings.

Why? Because South Carolina, like most public entities, has created a monster that must be slain. Private sector companies realized this decades ago and have for the past 20 years been dismantling their defined benefit pension plans. This wasn't a mean-spirited move to deprive future retirees of an income, but rather ensuring the survival of the enterprise - pure and simple.

Let's look at some facts. South Carolina's overall pension system, which includes state civilian employees, police, legislators, judges and national guardsmen, is underfunded by over $20 billion (yes, with a "b"). That's over $4,000 that every man, woman and child in South Carolina owes to present and future state retirees. The current (inadequate) funding that is going into this system is 20% of eligible workers' salaries, split between themselves and the state. These numbers take my breath away.

The reasons this and most public entities' pension systems are under water are the same reasons the private sector has been scrambling to exit their defined benefit plans. First, that people are living longer. These plans were built in the 1940s when life expectancy was 63 years. Some workers were expected to die before retirement and those who didn't were expected to receive benefits for only 5-10 years. Imagine how pensioners living to be 80 and 90 explodes the amount of money needed to keep our promises to them.

Secondly, legislators looking for votes sweetened up the benefits along the way, including cost-of-living adjustments that further ballooned the liability. They wrote checks we can't cash. Finally, these plans were based on investment returns much higher than recently achieved on lower-risk investments such as bonds. Ask any fixed income investor how that's been working out lately. Those three forces alone, together with some past mismanagement of the SC pension system have put it in functional bankruptcy. If the $20 billion liability were fully represented on the state's balance sheet we would be an additional $13 Billion in debt, beyond the $14 Billion we've owned up to.

The News article stated that "advocates for state workers warned that ending one of the few perks for underpaid workers would lead to an exodus of employees at already understaffed state agencies." Now, that's some interesting logic. We can't afford to pay competitive wages now, but we can afford to pay those same people for a couple of decades after they retire? Albert Einstein once said, "We cannot solve our problems with the same thinking we used when we created them." Who knew he was talking about our state pension system?

Gov. McMaster has proposed a thoughtful, rational, "soft landing"approach to winding down this monster while being fair to past and future state employees. Please let your legislators know you're behind putting this financial time bomb to sleep.


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Old 10-03-2017, 02:59 PM
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NEW JERSEY

PATERSON

http://www.northjersey.com/story/new...ion/724362001/

Quote:
Paterson’s next mayor says she won’t double-dip with pension

Spoiler:
PATERSON — The city’s new mayor-select, Jane Williams-Warren, said Monday that she plans to forgo her $97,500 state pension while she serves as Paterson’s chief executive.

“That’s something I would never do,” Williams-Warren said when asked if she planned to collect her public pension and salary at the same time. “There’s a right way and wrong way to do things. I intend to stop the pension.”

Some local officials suggested that Williams-Warren, who was Paterson’s municipal clerk for 24 years before she retired at the end of 2014, could have sought to keep getting her pension on top of the $119,000 mayor’s salary. In fact, convicted former mayor Joey Torres had been getting a $68,000 public pension on top of his mayoral salary for more than three years.


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Old 10-03-2017, 03:00 PM
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INVESTMENT RETURNS
ALTERNATIVE ASSETS

http://www.pionline.com/article/2017...-over-10-years

Quote:
Cliffwater: U.S. state pension plans returned a median annualized 5.9% over 10 years

Spoiler:
U.S. state pension plans returned a median annualized 5.9% for the 10 years ended June 30, 2016, vs. 6.8% for the 10 years ended June 30, 2015, said Cliffwater's most recent annual state pension performance report.

Large endowments with assets greater than $1 billion returned an average 5.7% over the 10 years ended June 30, making it Cliffwater's first report in which endowments did not outperform state pension plans. The average return for state plans was also 5.7%.

Once again, the two top-performing state pension plans for the period were the $15.6 billion Oklahoma Teachers' Retirement System, returning 7.1%, and the South Dakota Investment Council returning 6.8% for the $10.5 billion South Dakota Retirement System. In third place was the $7 billion Missouri Local Government Employees Retirement System, returning 6.7%. All returns cited are annualized figures.

The alternative investment consultant's report also looked at pension funds' asset allocations and performance by asset class.

As of June 30, 2016, the plans had an average asset allocation of 48% public equities (down two percentage points from 2015), 26% alternatives (up two percentage points), 24% fixed income (up one percentage point), and 2% cash (down one percentage point).

According to Cliffwater, most of the alternatives increase for the year was directed to private equity, private debt and opportunistic investments. Within alternatives, the average allocation as of June 30, 2016 was 36% private equity, 30% real estate, 18% hedge funds, 13% real asset and the remainder in other alternatives.

Looking at alternative performance, the median return for private equity was 9.9% for the 10 years ended June 30, and 5.8% for real estate. Individual pension funds' real estate returns varied the most of any asset class for the 10-year period, Cliffwater noted.

Once again, the plans with the highest real estate returns over the 10-year period were the $73.3 billion Ohio State Teachers Retirement System, returning 9.6%; $15.6 billion Hawaii Employees' Retirement System, 8.8%; and $109.2 billion New York State Teachers' Retirement System, 7.6%.

The plan with the highest private equity return over the period remained the $67 billion Massachusetts Pension Reserves Investment Management Board, with a return of 14.4%, followed by the $13.4 billion Ohio School Employees Retirement System, 13.5%; and the $28.5 billion Iowa Public Employees' Retirement System, 12.4%.

Cliffwater's report also found that more than three-quarters of the pension funds exceeded the 4.9% average​ 10-year return for a passive portfolio of 65% stock index funds and 35% bond index funds. However, in aggregate, the plans underperformed the 8% assumed rate of return for the 10-year period.

The average 5.7% return for the 10 years ended June 30, 2016, fell within a wide range of individual pension plan returns (3.7% to 7.1%).
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Old 10-03-2017, 03:01 PM
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PLEASANT RIDGE, MICHIGAN

http://www.dailytribune.com/article/...NEWS/171009952

Quote:
Pleasant Ridge seeks millage to fund police pension costs


Spoiler:
Pleasant Ridge voters are being asked to approve a millage hike to stabilize the city’s pension system for its police officers.

“We’ll soon be at a point where we can pay our current police officers or our retirees, but not both,” said City Manager Jim Brueckman.

The pension funding issue for local governments is a challenge for many cities, towns and villages nationwide. Nearby cities such as Oak Park, Royal Oak and others have gotten either millage increases or taken out bonds to cover pension funding shortages.

Pleasant Ridge in 2011 stopped offering full pensions and now has a hybrid system that includes a partial pension and the municipal equivalent of 401K accounts,

The city is asking for a 1.4 mills tax for 15 years to make up the shortfall. If the measure is approved, the city’s pension funding issue will resolved by the time the millage ends, Brueckman said.

An upscale community of about 2,500 residents, the average home in Pleasant Ridge has taxable value of about $115,000. That means the average homeowner would pay about $160 dollars annually in new tax if voters approve the millage proposal Nov. 7.

The city’s police pension is 48 percent funded, leaving an unfunded liability of $1.7 million.

The millage would be phased in over four years in increments of 0.35-mills.

Pleasant Ridge is among more than 700 other local communities and agencies statewide that have pensions administered by the Municipal Employees’ Retirement System. The system two years ago required municipalities to eliminate unfunded liabilities over 25 years. Brueckman said much of the problem started when benefits increases were given in the 1980s and 90s but benefit contributions were not increased to cover those costs into the future.
.....
Pleasant Ridge’s pension payments for all city retirees were about $180,000 annually in 2014, but are expected to more than double to $425,000 in about five years, according to figures from the city.

The city has five police officers and a sixth position that is unfilled. If the millage is approved, Brueckman said, the sixth position will be filled.


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Old 10-03-2017, 03:03 PM
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KENTUCKY

CRISIS

http://www.wymt.com/content/news/Hun...449139103.html

Quote:
Hundreds gather at pension rally in Perry County





Spoiler:
PERRY COUNTY, Ky. (WYMT) - Pensions have been on the minds of many Kentuckians recently. Perry County is just one of the stops for the Kentucky Education Association’s Pension is a Promise Rally, which drew hundreds of people Monday.


The rally allows state employees, retirees and those concerned about the future of pensions to talk to local legislators.

Stephani Winkler, president of the Kentucky Education Association, says the rally in Perry County is just one of multiple rallies aimed at increasing public knowledge about pensions.

"This is one of many rallies across the state where we hope to bring communities together and create awareness about our plight to protect our definite pension plans that state employees receive as a supplement their low salaries in order to protect the public," said Winkler.

Kenny Bell, the Wolfe County Superintendent said that finding people to fill teaching jobs has become harder over the years.

"It's already hard to get teachers to apply, we're having trouble filling positions that 10 years ago we didn't have problems filling," said Bell.

He says if pensions are at risk, the chance of finding people to fill those teaching jobs will be even harder.

"If you take pensions away, we're not going to have people going into the field. Our children are our most precious resource," said Bell.

Representatives at the event said they will do all they can to help, but people should not worry until the final proposal comes out.

"I think right now that we all have to wait to see what the final proposal is going to be, and then we'll go from there," said State Representative Chris Fugate.


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Old 10-03-2017, 03:05 PM
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PHILADELPHIA
DIVESTMENT

http://www.philly.com/philly/news/po...-20171002.html

Quote:
Philly pension board considers divesting from private prisons

Spoiler:
Some members of the Philadelphia Board of Pensions want to sell off $1.2 million worth of stock it owns of for-profit prison companies as a statement of moral disapproval of an industry that has drawn health and safety complaints.

The amount is a sliver of the $5 billion that the fund has in its various investments, but the city has a history of adjusting its portfolio around progressive causes.

“The board is one of the leading organizations in the country in having a social conscience,” Pedro Rodriguez, the city’s Human Resources Director and pension board member said, referencing the fund’s focus on inclusion and diversity in its portfolio. “This is just an extension of that philosophy.”

But a resolution to divest in the fund’s holdings of three private prison companies — the GEO Group, CoreCivic and G4S — was put on hold last week after members were told that the city has 184 prisoners housed at Hoffman Hall, a private prison in Philadelphia’s Juniata Park neighborhood.

“The city wants to divest in private prisons, but they are also sending prisoners to a private prison,” said City Controller Alan Butkovitz, who sits on the pension board. “That raises a hypocrisy issue with a capital ‘H.’ ”

Hoffman Hall is part of the Community Education Centers network, which was purchased by the GEO Group in April.

Aside from that awkward realization, the private prison divestment proposal has raised concerns among some board members about making investment decisions based on social objections. Board members have a fiduciary responsibility to the fund.

Ron Stagliano, one of the pension board members and a representative for the Fraternal Order of Police, said, “I have to be concerned as to the effect on our return on investment.”

Christopher DiFusco, the pension board’s chief investment officer, said that the $1.2 million the fund has invested in private prisons are part of index funds and are “relatively small” compared with the fund’s $5 billion exposure.

“The performance of these stocks would not move the needle significantly in either direction,” DiFusco said.

Divesting in private prisons is not a new idea. New York City’s pension fund trustees decided in June to divest $48 million worth of stock and bonds from the same three private prison groups in which the Philadelphia fund has investments. Overall, New York has $175 billion in pension investments.

Philadelphia City Councilwoman Blondell Reynolds Brown asked the pension board over the summer to consider following New York’s move.

“For me, it’s a novel idea,” Reynolds Brown said. “Let’s consider the possibility.”

The board has previously divested its funds from other controversial industries such as tobacco and gun manufacturers and predatory lenders. It also has pulled money out of Sudan and Iran.

Some have suggested that the board should consider divesting from the fossil-fuels industry out of concern over climate change. (The fund has about $330 million invested in fossil fuel companies.)

Butkovitz said he is concerned that if the board agrees to divest in businesses that get negative headlines, it could affect the fund’s ability to meet the 7.7 percent rate of return it needs in order to be able to cover 80 percent of projected liabilities by 2030.

“The more restrictions they have, the harder it is for them to have our portfolio hit the target,” Butkovitz said. “Every company in the world is mired in some controversy.”

City finance director Rob Dubow, who is also chairman of the pension board, said that any decisions to divest funds is based on “our fiduciary duty to its members and beneficiaries, and our legal responsibilities to the fund.”


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