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  #301  
Old 02-18-2019, 08:51 AM
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Mary Pat Campbell
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NEW JERSEY

https://www.nj.com/south/2019/02/thi...-feedback.html
Quote:
End pension income exclusion to aid state, tax-wise
Spoiler:
An estimated $11 billion was paid out by the State of New Jersey last year in pension benefits for public-sector retirees.

At the same time, the pension income exclusion from state income taxes in 2018 was $60,000 for a married couple, and $45,000 if you’re single. (The exclusion is unavailable if gross income from all sources is more than $100,000.)


You'll lose out on this benefit if you earn one dollar over the $100,000 limit.


Real estate taxes keep escalating. When my family first moved here 34 years ago our annual real estate taxes were $1,400 per year. Now these property taxes are $1,900 per quarter, or $7,600 per year. Obviously, I live in a pretty modest house, since I know other homeowners whose tax bills are much higher.

From what I read, even with the large amount taxes now being paid, even more will be needed to fund the state pension system adequately in the future.

What I’d like to know is why the beneficiaries of pension payments, both government and private-sector ones, receive such a large state tax exemption. If the beneficiaries paid as little as a 1 percent tax on the below-the-cap benefits received, wouldn’t this help offset some of the real-estate tax hikes we will be facing?

Joe Ledvina, Turnersville


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  #302  
Old 02-18-2019, 08:54 AM
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CALIFORNIA
CALPERS

https://www.eastbaytimes.com/2019/02...nia-taxpayers/

Quote:
Borenstein: CalPERS’ flawed forecasting increases pension debt
For sake of taxpayers and retirees, California system should stop using overly optimistic investment predictions

Spoiler:
Despite nearly a decade of economic growth since the end of the Great Recession, the nation’s largest public pension system remains badly underfunded with only about two-thirds of the assets it should now have.

It’s time for the California Public Employees’ Retirement System to address one of the causes of the shortfall: It should stop relying on unrealistically optimistic investment-return forecasts to help bankroll the retirement of 1.9 million state and local government workers and family members.

CalPERS is currently in the middle of a three-year lowering of its assumed investment-earnings rate, from 7.5 percent annually to 7 percent. But that’s still not low enough.

The pension system’s staff and board members should know that. Their outside consultant warned them in 2016 that the best average annual return they could expect over the next 10 years was 6.2 percent.

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For the sake of taxpayers and government workers, it’s time to further reduce the critical investment-earnings assumption.

To understand the significance of the assumed rate of return, keep in mind that public pensions are funded from three sources: Contributions from government employers (taxpayers), contributions from public employees and investment returns on those contributions.

The greater the assumed rate of return on those investments, the less money employers and employees must kick in up front. So, to leave more immediate money in government coffers for salaries and public projects, politically influential labor unions and many lawmakers push for optimistic assumptions about investment returns.

But reality catches up when those investment-return projections fail to pan out. The resulting shortfall is a debt that must be paid off to ensure workers’ pensions are safe.

CalPERS’ debt now stands at an all-time high $146 billion, an average of more than $11,000 per California household. Payments on the shortfall are helping drive today’s rapidly rising pension costs that siphon off a growing portion of government revenues.


It’s time to break the cycle, to use realistic investment assumptions to properly fund the system up front, rather than financing it through costly debt payments.

Using overly aggressive forecasting is unfair and financially unwise for many reasons:

Unfair to taxpayers: It transfers pension costs from government employees to taxpayers. Upfront pension costs are shared by workers and employers. But when investment earnings fall short, government employers (taxpayers), make up the difference.

Unfair to future generations: Pensions should be properly funded up front, when government workers perform labor and earn benefits. When investment earnings fall short, the debt is amortized over 20 to 30 years, forcing our children and grandchildren to pay costs for labor that benefits the current generation. That means future generations will have to pay more taxes or absorb more service cuts.

Hides full cost of pensions: Overdependence on investment earnings hides part of the cost of pensions, making them look cheaper than they are. The result: Current politicians agree to benefits their agencies can’t afford but leave future leaders to find a way to help pay for it.

Increases long-term cost: It takes money to make money. Underfunding the system upfront reduces the potential for future investment returns and increases the total cost to taxpayers.

Leaves CalPERS more vulnerable: Underfunding a pension system leaves it more vulnerable to economic downturn, and puts workers’ pensions at greater risk. The only thing that saved CalPERS during the Great Recession was that it was fully funded, with 101 percent of the assets it should have had, as the downturn began. Two years later that funded ratio had dropped precipitously to 61 percent.

CalPERS has struggled to recover ever since. On June 30, 2018, CalPERS had just 71 percent of the assets it should have had on hand. By Dec. 31, that funded ratio had dropped to about 66 percent, although it has recovered some since. CalPERS would slip into insolvency if it had to absorb another 40-point decline.

To be sure, overly optimistic investment forecasting is not the only cause of the system’s severe shortfall. It’s actuarial assumptions about life-expectancy were off and had been leading to undercollection of contributions; that’s been fixed. And it had been slow to cover past shortfalls; that’s been only partially fixed.

As for the 7 percent investment assumption, many like to cherry-pick the pension system’s past years of strong performance returns to justify the forecast.

But, Yu Ben Meng, CalPERS newly appointed chief investment officer, told his board last month that over the past 10 years and past 20 years, the system had fallen short of the 7 percent mark. Moreover, he said, market conditions make hitting that target in the future even more challenging.

Reaching that target requires making riskier investments, with greater upside potential and, of course, greater downside peril. It’s risk that an already underfunded pension system cannot afford to take.

For the sake of taxpayers and government workers, CalPERS should not be relying so heavily on overly optimistic investment forecasts. They should stop digging the hole deeper.


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  #303  
Old 02-18-2019, 08:55 AM
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ESG

https://www.forbes.com/sites/waynewi.../#4446f8a31ea6

Quote:
Public Pension Funds' Sole Responsibility Is To Secure The Retirement Of Public Sector Workers

Spoiler:
State and local public pension funds are trillions of dollars in debt. Without fully accounting for the risks, state public pension funds have $1.4 trillion in unfunded liabilities (e.g. debt) according to the Pew Center’s latest estimates. Even more troubling, this debt is still growing.

The sole priority of a public pension funds should always be to earn the highest rates of return possible for their members, but due to their precarious fiscal position, such a focus is more important than ever. Unfortunately, there is a growing trend among public pension funds to screen potential investments, not on their financial viability, but based on certain environmental, social and governance criteria (ESG investing).

Of course, ESG investing is the right choice for some people. Individuals undoubtedly have the right to engage in ESG investing with their own money, and perhaps they will earn a higher return and thus “do well by doing good”. Perhaps not. Either way, when individual investors engage in ESG investing they can ensure that the investments reflect their personal values and, if these values create financial losses, the individual investors bear the financial consequences of their decisions.


This nexus does not exist for public pension funds. Public pension funds manage the retirement assets for millions of public sector workers and, if their investment returns are inadequate, then it is the hundreds of millions of taxpayers who are currently responsible for the shortfalls. It is impossible to make ESG decisions that accurately reflect the values of such a diverse group of people.

Expressing these concerns, SEC Commissioner Hester Peirce noted that “problems arise when those making the investment decisions are doing so on behalf of others who do not share their ESG objectives. This problem is most acute when the individual cannot easily exit the relationship. For example, pension beneficiaries often must remain invested with the pension to receive their benefits. When a pension fund manager is making the decision to pursue her moral goals at the risk of financial return, the manager is putting other people’s retirements at risk.”

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Beyond the problem of conflicting values, ESG investing often violates the fiduciary responsibility of public pension funds. The primary responsibility of a public pension fund is to secure the retirement of the current and retired public sector workers on behalf of taxpayers. However, it is commonly understood in finance that arbitrary investment restrictions lower investors’ risk-adjusted returns.

The problem runs deeper than investment selection as well. As I argued previously, the conflicted advice from the major proxy advisory firms (ISS and Glass Lewis, who control 97% of the proxy advisory market) encourages institutional investors, like public pension funds, to vote positively on ESG measures at shareholder meetings even if the measures are extraneous or harmful to the enhancement of shareholder value.

Many academic evaluations of ESG investing confirm these results.

A study in the Journal of Portfolio Management found that “the cost of socially responsible investing is substantial.” In another study, this one by the Center for Retirement Research at Boston College, the authors found that socially responsible funds significantly under-performed their benchmarks and concluded that public pension funds are not suited for social investing.

The consequences from ESG investing is evident by comparing the returns of ESG funds to the overall market. The 8 ESG funds that have existed for 10-years have all under-performed relative to the S&P 500 over the long-term, most of them by a wide margin.

In recognition of these concerns, the Department of Labor, which oversees private pension funds, issued a Field Assistance Bulletin in April of 2018 that reiterated the department’s policy “that, because every investment necessarily causes a plan to forego other investment opportunities, plan fiduciaries are not permitted to sacrifice investment return or take on additional investment risk as a means of using plan investments to promote collateral social policy goals.”

Due to the lower investment returns associated with ESG investing and the divergent values across the large number of people that public pension funds represent, it is clear that public pension funds harm public sector employees and retirees when they engage in ESG investing.

Given the SEC’s clear responsibility to protect investors, the agency should provide clarity, as the Labor Department has, on the role of ESG investing for public pension funds.

Specifically, the SEC should clarify that the ESG recommendations provided by proxy advisory firms must be consistent with the fiduciary responsibility of the public pension fund managers they are advising. Further, like the Department of Labor, the SEC should clearly state that the public-pension managers and boards are not permitted to sacrifice returns for non-financial “social policy goals.”

Without such clarifications, the retirement security of public sector workers will be jeopardized.


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  #304  
Old 02-18-2019, 08:56 AM
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NEW JERSEY
ESG

https://observer.com/2019/02/amazon-...-pension-fund/

Quote:
Why New Jersey’s Public Employees Should Be Mad at Jeff Bezos‘ National Enquirer Mess

Spoiler:
Amazon founder Jeff Bezos’ ongoing feud with The National Enquirer, which exposed his intimate text messages with mistress Lauren Sanchez last month and allegedly blackmailed him with even more embarrassing proof of his affair, may look like mere Page Six drama on the surface. But apparently, the amount of media attention the scandal has drawn so far has upset many seemingly unrelated parties.

The latest to express anger over the whole Bezos-National Enquirer face-off is the New Jersey State Investment Council, which manages $76 billion in pension funds on behalf of the state’s public employees.

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Turns out, the state pension fund is a shareholder in hedge fund Chatham Asset Management, which owns the majority of The National Enquirer‘s publisher, American Media Inc. (AMI).

“The allegations of AMI’s conduct, if true, are completely unacceptable and violate our expectations for investment partners,” Adam Liebtag, chairman of the investment council, said in a statement to Bloomberg on Wednesday. “It is extremely disappointing that the pension fund, as an investor, and our beneficiaries, have to be linked to such a distasteful story.”

As Observer has learned, the New Jersey pension fund has invested a total of $570 million in two Chatham funds (one in 2014 and the other in 2017). The indirect holdings in AMI have delivered “favorable returns,” a spokesperson for the New Jersey State Investment Council said.

Liebtag said the investment council had communicated its concerns to Chatham and suggested that the state pension could withdraw from the hedge fund if AMI’s public spat with Bezos continued.

“While the investment has performed well to date, that is no excuse for this type of behavior. We continue to explore all available options,” he said.

Public pension funds like New Jersey’s have long faced criticism for putting public employees’ pension money into hedge funds, which typically charge much higher management fees and commissions than more conservative investment products like index funds or bonds. During hedge funds’ heyday, pension investors often justified these fees with the market-beating returns that hedge funds achieved.

But as hedge funds’ overall performance has declined in recent years, most pension funds allocate only a small percentage of their total assets to them. The New Jersey fund, for example, had about 3.8 percent allocated in hedge funds as of the end of 2017, according to its latest annual report.

“While the Department of Investment (a unit within the New Jersey State Treasury) plays no role in the management of a hedge fund’s portfolio companies, it expects the funds to invest in good businesses with strong management teams that follow all applicable laws,” the New Jersey fund spokesperson said. “DOI expects that Chatham will take whatever steps are necessary to protect its investors from undue risks.”


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  #305  
Old 02-18-2019, 08:56 AM
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CONNECTICUT

http://www.wshu.org/post/lamont-budg...g-gap#stream/0

Quote:
Lamont Budget To Address Teacher Pension Funding Gap

Spoiler:
Connecticut Governor Ned Lamont says he will attempt to start to deal with the state’s underfunded public school teacher pension fund in his first budget.

The fund is now about $13 billion short. The state’s annual budget is about $20 billion. Lamont says that’s why he’s reached out to the state’s teacher unions to help reduce the burden on the state budget.

“The cost could be unsupportable in the next three or four years. And we are negotiating to see if we can stretch out that obligation and reduce our annual cost and save the pension.”

Former Governor Dannel Malloy proposed that cities and towns share in the state’s teacher pension obligation. Lamont says he’s not doing that.

“That’s not my strategy.”

Additional proposals include transferring lottery proceeds and other state assets to the fund. In the past Connecticut’s teacher unions have objected to having higher member contributions, revising the cost-of-living adjustments or restructuring benefits.

Lamont would not say which of these he’s considering.

He presents his budget to state lawmakers next Wednesday.


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Old 02-18-2019, 09:02 AM
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FEDERAL
CONGRESS

https://trofire.com/2019/02/17/milli...for-lawmakers/
Quote:
Millionaire Republican Senators Want To Kill Pension Plans For Lawmakers

Spoiler:
Two extraordinarily wealthy Republican Senators – Rick Scott and Mike Braun – are trying to do away with the pension plans for Congress members that pay them retirement salaries after they leave office. These two men believe that they can get the public to support the plan, but the public is smart enough to understand that this means only the super rich will be able to afford to run for office. Ring of Fire’s Farron Cousins discusses this.


Transcript:

*This transcript was generated by a third-party transcription software company, so please excuse any typos.

A pair of Republican senators are actually trying to make it to where low income people, people from moderate means basically anybody who is not already a millionaire or more. They’re trying to make it to where those people can’t run for office anymore and they’re trying to do that by dismantling and completely scrapping congressional pensions. The effort is being led by a man with a net worth of over $230 million. My former governor, Republican Rick Scott, Rick Scott, the guy that doesn’t have to worry about a pension, the guy that doesn’t have to worry about his hundred and $74,000 salary a year that he’s going to get as a senator because he literally is sitting on hundreds of millions of dollars in cash. Even though he did perpetrate a one point $7 billion fraud against Medicare and Medicaid from the company he was running and then ran away from once they got in trouble for it.

Rick Scott should be in prison and not in the Senate, but that’s neither here nor there because the voters in my state unfortunately are not the best at picking people. So Rick Scott brings his millionaire horribleness to the Senate and one of the first things he tries to do is team up with Republican Senator Mike Braun, who has a net worth that’s estimated between 35 and $96 million and they come up with a plan to destroy the pensions for everyone serving in Congress. Here’s what that does. Obviously, just like in the case of Rick Scott, it means that if you’re struggling, like say if you’re somebody like Alexandria ocozzio Cortez, we know she does not have a massive net worth at all, but if they were to tell people like that in any other future Ocozzio Cortez, like people out in this country that if you run for Congress, that’s great.

You’re not going to have a pension. You will have no retirement whatsoever, so best of luck to you. Maybe you should just let the millionaires and billionaires run for office because they don’t have to worry about money. That’s what they’re trying to say and that’s what they’re trying to do. That is the goal of this, to keep average everyday working class Americans out of Congress. That’s what Rick Scott wants to do. And here’s the thing, it’s not even like we’re, we’re sitting out paying these massive pensions, the former members of Congress. Here’s how it works. This is according to think progress here. Uh, to qualify a former member must be either 62 years old with five years of service or be at least 50 years old with 20 years of service. So a retired member of Congress with 25 years of service is going to receive an annual pension of roughly $67,000. A single term senator is going to receive an annual pitch of less than $18,000 when they reach retirement age. So the pensions already pretty small. You know, you can get better pensions, uh, working in just a regular company, but they do exist and they’re there for a reason to help take care of the people who did devote their lives to serving as an elected official. But Rick Scott wants to take it away. Just like when he was governor of the state of Florida, he decided to sell the states private jet that the governor’s office had because he didn’t need it. He had a private jet, so he was just going to use his jet instead of the one that the state, the taxpayers had already paid for. So we got rid of that one.

Okay.

And if you don’t think that’s important, let me just explain something real quick. We’re aware, I’m sitting in Florida, which is borderline Alabama. That’s a horrible, it is. Uh, it’s about a 15 hour drive to the bottom of the state. This is a much larger state than it really gets credit for. So yeah, the private jet was important, especially in a state where we do tend to have a lot of natural disasters. But Rick Scott sold it because I don’t need it so surely nobody else is ever going to need it. And he’s doing the same thing with congressional pensions right here. He’ll never need it. He doesn’t care about that money. He just cares about the power that he’s gotten. All the money he’s already sitting on.

Okay.

Mark my words, Rick Scott will one day run for president of the United States. That is what this has been building up to. You don’t go from governor to senator if you don’t have bigger political ambitions. I know Mitt Romney did it, but trust me, Mitt Romney’s not out of it either. We’ll see his name pop up again too, but Rick Scott, in the meantime, before he can secure that run for president wants, there’s no republican incumbent. Rick Scott is trying to remake the house and the Senate so that it’s only welcoming and accommodating for millionaires and billionaires.


https://thinkprogress.org/rick-scott...-46be0dcd38ed/
Quote:
2 millionaire senators introduce plan to make sure Congress is only for the rich
Well, that's one way to deal with Alexandria Ocasio-Cortez.

Spoiler:
Let’s start this column off with a bold assertion. Paying lawmakers good salaries is one of our country’s most important progressive reforms because it means that they don’t have to be wealthy to serve. High congressional pay is a safeguard against corruption, not a sign of it.

Bear this assertion in mind as you consider this proposal.


Rick Scott

@SenRickScott
This morning I co-sponsored a bill to end congressional pensions with @SenatorBraun.

Americans shouldn't have to foot the bill for generous salaries and pensions for members of Congress, and I’m proud to be working on common sense solutions to make DC work for all families.

The Washington Times

@WashTimes
GOP senators Scott, Braun introduce bill to end congressional pensions https://www.washingtontimes.com/news...ress-pensions/

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Scott’s net worth was $232.6 million at the end of 2017 — not bad for a man who led a company that paid $1.7 billion in fines for widespread Medicare and Medicaid fraud. His co-sponsor, Sen. Mike Braun (R-IN), is worth between $35 million and $96 million, according to his campaign disclosure forms. So Scott and Braun can afford to forego their pensions — or their entire salary, if they choose.

Yet, if elected officials do not receive what Scott dismisses as “generous salaries and pensions,” that will discourage people who do not have Scott or Braun’s vast wealth from running for office. As future President John Adams once warned, if “you make it law that no man should hold an office who had not a private income sufficient for the subsistence and prospects of himself and family,” then “all offices would be monopolized by the rich, the poor and the middling ranks would be excluded, and an aristocratic despotism would immediately follow.”

The question of whether to pay lawmakers was hotly contested by the framers — as historian Gordon Wood writes, the ultimate decision to do so “was radical for the age.” Many prominent early Americans subscribed to what Wood labels the “classical republican” view, which saw public service as a burden that should be carried without remuneration.

“In a virtuous government,” Thomas Jefferson claimed, “public offices are, what they should be, burthens to those appointed to them, which it would be wrong to decline, though foreseen to bring with them intense labor, and great private loss.”

Jefferson, of course, was a wealthy slave owner.

Ultimately, however, Adams’ view prevailed over Jeffersons’ — which is why the Constitution provides that “the Senators and Representatives shall receive a Compensation for their Services, to be ascertained by Law, and paid out of the Treasury of the United States.” Currently, most members of Congress receive a salary of $174,000 per year, plus benefits.

That’s enough money for lawmakers to enjoy an upper middle class lifestyle, but there are also good reasons why we should want lawmakers to be paid fairly generously. Members of Congress who struggle to make ends meet are more likely to be tempted by bribes. They’re also more likely to quit public service in favor of more lucrative corporate lobbying jobs.

It’s also worth noting that the congressional pensions that Scott and Braun wish to eliminate are fairly modest.

Congress uses an elaborate formula to determine the amount of each retired member’s pension. To qualify, a former member must either be 62-years-old with five years of service, or be at least 50-years-old with 20 years of service.

Qualified former members receive a small percentage of their congressional salary for each year that they served in Congress. Again, the formula is fairly complicated, but under this formula a retired congresswoman with 25 years of service will receive an annual pension of about $67,000. A single-term senator will receive an annual pension of less than $18,000 when they reach retirement age.

That’s enough money to allow a retired lawmaker to live a solidly middle class life when they combine their pension with Social Security benefits and any savings they amassed over the course of their life. But it’s hardly a massive windfall.

It is, however, an enticement that will encourage people who do not share Scott or Braun’s massive wealth to consider public service.


https://www.care2.com/causes/this-pl...y-devious.html
Quote:
This Plan to Cut Lawmaker Pensions Is Actually Devious

Spoiler:
In case you weren’t aware, Congress is brimming with rich people. The average member of Congress is a millionaire and worth 12 times the amount of the average American household. Now newly elected senators Rick Scott and Mike Braun have a plan to keep it that way.

Technically, the senators’ new bill, the End Pensions in Congress Act, takes money away from federal lawmakers. Rather than awarding pension based upon members’ salary and years of service (someone who served 25 years could earn $67,000 a year in their old age, so it’s hardly extravagant,) the legislation would get rid of pensions altogether.

“Americans shouldn’t have to foot the bill for generous salaries and pensions for members of Congress,” said Sen. Scott.

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Sen. Braun agreed, explaining, “If we remove the luxurious perks from Congress, we’ll get better leaders. That’s why I’ll never accept my Senate pension, and if forced to, I pledge to donate every penny to Hoosier charities.”

Granted, it would be a lot nobler if Braun didn’t have assets estimated between $35 and 96 million. Meanwhile, his cosponsor Scott is believed to be worth over $232 million. It’s safe to say that neither of these Republican men is counting on a congressional pension to get by once he’s retired.

As for the assertions that Congress would attract better people if it stopped offering “perks” – like pensions and a good salary – that might sound good on the surface, but creates some unintended (or possibly very intended) consequences.

While members of Congress shouldn’t be serving for the money, the fact is people need to earn income and want to set themselves up for a comfortable retirement. By taking away that financial security net, it makes it that much harder for working class people like Rep. Alexandria Ocasio-Cortez – who was refreshingly honest about her inability to pay rent in D.C. until getting her first congressional paycheck (and mocked by Republicans because of it) – to run for office.

If you make Congress an exclusively community service type job, the only people who would be able to seek office are those who are independently wealthy, ensuring that Congress remains mainly comprised of upper class people out of touch with the financial needs of most Americans. Whether or not Scott and Braun are specifically aiming for this outcome with their legislation is up for debate.

ThinkProgress columnist Ian Millhiser sure believes the intent is nefarious, calling out how it practically necessitates that lawmakers go into lobbying to make money after exiting public life. The Congress/lobbyist revolving door is bad enough as it is, can you imagine the kind of pro-corporate bills legislators would feel compelled to pass in the hopes of securing a post-Congress job to save for retirement? That system seems way more corrupt than offering legislators a nice salary and pension.

The good news about this bad bill is that its chances of passing in Congress are tiny, since lawmakers aren’t exactly known for willingly forfeiting money owed to them. Instead, corporations will just have to rely on all of its other methods like lax campaign finance rules and control of the media to ensure that Congress remains stacked with millionaires.


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  #307  
Old 02-18-2019, 09:21 AM
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ILLINOIS

https://chicago.suntimes.com/columni...s-rich-miller/
Quote:
Pritzker wants to put off pension payments — as if the future will never arrive

Spoiler:
Gov. J.B. Pritzker’s administration has confirmed that its new public pension plan will slash $800 million from the state’s scheduled pension payment next fiscal year, which begins July 1.

That reduction is a direct result of Pritzker’s proposal unveiled last week by Deputy Gov. Dan Hynes, which would extend the state’s pension payment “ramp” by seven years, from 2045 to 2052.

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But the administration won’t yet say how much more money will be “saved” during the coming fiscal years by extending the payment ramp, except to suggest that the near-term cost reductions might be somewhere around $800 million a year.

More importantly, the administration also will not say how many more billions this scheme will wind up costing taxpayers in the long-term.

Hynes recently complained on WTTW’s “Chicago Tonight” program that the people who devised the original pension payment ramp never dreamed that annual state pension payments would eventually consume 20 percent of state revenues.

And, indeed, way back in 1994 the state projected the pension payments this fiscal year would be $4.66 billion. Instead, the governor’s budget office puts that figure at $7.1 billion, rising to almost $8.2 billion next fiscal year and then to $9 billion by Fiscal Year 2022.

Stretching out the payment funding schedule would reduce short-term costs. But one person’s pension funding schedule restructuring is another person’s pension “holiday,” as skimping and skipping the payments were called back in the days before all heck broke loose.

Remember, a dollar saved today by not putting it into the pension fund results in multiple investment dollars lost that will have to be put in by taxpayers years down the road. This is the biggest reason why the state’s pension payments are so high right now. Payments were deferred and, therefore, investments were not made and then debt piled up to mountainous levels and taxpayers are currently being forced to make up the difference.

Almost all the revenue from the 2011 income tax hike had to go to the pension funds because the state had gotten itself so far in over its collective head that it couldn’t make the full annual payment. When the tax hike was allowed to partially roll back in 2015, the state kept making pension payments, but that exploded its unpaid bill backlog and forced cuts to the rest of government.

Pritzker has said over and over again that he opposes any sort of constitutional change to allow for reduced pension benefits going forward. The only remaining option is to pay the piper. The temptation appears intense right now to once again try to shift those payments into the future.

The Pritzker folks say transferring state assets into the pension funds could negate the long-term negative fiscal impact of extending the payment ramp. That could be true if those assets are significant and if the General Assembly agrees to do it.

Pritzker recently announced a task force designed to look into the use of state assets to prop up the pension funds. It will look into selling off state-owned real estate, including the Thompson Center in Chicago.

The most discussed state asset sale is the Tollway. Neither Hynes nor the administration would confirm the widespread speculation that the Tollway will be put on the auction block.

A Tollway sale could generate tens of billions of dollars, but Pritzker likely will have to use every bit of leverage he has to convince legislators to pass it. Former Chicago Mayor Richard M. Daley’s parking meter privatization scheme has been so universally derided that all government asset sales, even logical ones, are now automatically viewed with the deepest of suspicions. Any sale or lease would likely have to come with far more restrictions than Daley’s parking meter deal, which has sprouted meters all over the city while forcing prices ever higher.

And a 2016 transportation revenue “lockbox” amendment to the Illinois Constitution may make the sale impossible anyway.

I am now covering my seventh governor. And what I’ve discovered about the “future” over all those years is that it always arrives. Freeing up a little budgetary breathing room today can have severe consequences down the road. I’ve seen it happen time and time again.

The best, most responsible solution is to match reliable state revenues with realistic projected expenditures. It’s never easy to do that, but it’s how other states avoid the fiscal trouble Illinois is constantly faced with.

Rich Miller also publishes Capitol Fax, a daily political newsletter, and CapitolFax.com.


https://www.wbez.org/shows/wbez-news...b-a3af96775f28
Quote:
Pritzker Eying Borrowing, Long-Term Repayment Extension As State Pension Fixes

Spoiler:
A top aide to Illinois Gov. JB Pritzker outlined plans to borrow and extend a mid-century funding deadline Thursday as part of a new push to confront the state’s massively underfunded pension systems.

The Pritzker administration also pledged to devote a portion of the proceeds from a proposed graduated income tax to the state’s retirement systems, though that vow is contingent on legislative and voter approval next year.

The package laid out by Deputy Gov. Dan Hynes, a former state comptroller, amounted to a teaser to Pritzker’s Feb. 20 budget address, where the governor is expected to lay out his vision for addressing the state’s $133.5 billion pension crisis.

What to do with the ever-escalating budgetary bite that state pension payments take out of the Illinois budget arguably ranks as the single largest fiscal challenge facing the newly seated Democratic governor.

In the mid-1990s, former Gov. Jim Edgar and the legislature embarked on a long-term repayment plan that aimed at getting the state’s five pension funds 90 percent funded by 2045. Under the existing pension payment ramp, the state will have to devote $9.2 billion to pensions in Fiscal 2020, roughly a quarter of the entire state operating budget.

Today, the pension systems are slightly more than 40 percent funded, and Pritzker is proposing extending the 90 percent funding deadline by seven years to help free up more operating funds in next year’s budget, Hynes said.

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Pushing pension costs farther into the future has been a non-starter for bond-rating agencies that have rated Illinois’ creditworthiness at one notch above junk status.

Hynes told an audience at the City Club of Chicago that he believes those credit analysts eventually will come around to Pritzker’s efforts.

“I think they’re going to find, especially after the graduated income tax becomes a reality, that this is a plan that works not just for one year but for future generations,” Hynes said.

Hynes said Pritzker favors borrowing $2 billion and immediately applying those proceeds to the pension systems. He also intends to pledge $200 million annually from new revenues generated by replacing the state’s flat income tax with a tax structure that will have sliding tax rates based on income. That change, however, is entirely contingent on changing the state’s constitution.

Earlier this month, Moody’s Investor Services warned that effort that would “defer or reduce contributions for fiscal relief would revive questions about pension plan sustainability.” On Thursday, a Moody’s spokesman declined comment on Hynes’ remarks, noting that the Pritzker administration’s pension plan is only “in the proposal stage.”

An aide to state Senate Minority Leader Bill Brady, R-Bloomington, said he intends to withheld judgment on the pension framework but “looks forward to seeing how this piece of the puzzle fits in with the governor’s overall budget proposal being unveiled next week.”

Dave McKinney covers Illinois state politics and government for WBEZ. Follow him @davemckinney.


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Old 02-18-2019, 09:21 AM
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NEW JERSEY

https://www.njtvonline.org/news/vide...rker-pensions/

Quote:
Murphy seeks review of state’s assets to help fund public worker pensions

Spoiler:
All state assets are on the table – buildings, roads, bridges, parks, transit facilities, air rights, naming rights — the list goes on.

The New Jersey State Treasurer has put out a request for qualifications, or RFQ, for a state asset financial adviser who can review the state’s assets and determine the value of them through potential “sale, lease, transfer, securitization, or other types of transactions.”

It’s all in effort to fund the public worker pension system and other post-employment benefit obligations. The state treasury’s most recent debt report from fiscal year 2017 shows a $115 billion pension hole.

State Treasurer Elizabeth Maher Muoio acknowledged “New Jersey faces many fiscal challenges” in a statement, adding, “we designed this RFQ to explore tangible, creative solutions to help maximize the state’s assets in order to minimize the burden to taxpayers.”

Senate President Steve Sweeney praised Gov. Phil Murphy, saying, “leveraging state assets to lower the unfunded liability in the pension system is one of the major recommendations in the Path to Progress report we issued last August.”

Using assets to plug holes is not a new concept. Former Gov. Chris Christie shifted the lottery to the pension system.

But Assembly Minority Leader Jon Bramnick says a key distinction is the state did not sell the lottery – it allocated revenue from the lottery to go into the pension system.

“This reminds me of, you have a house, and you have debt, and instead of figuring out how to save money, you sell your house. You sell your house only as a last possible resort when you have no other option. We’ve got plenty of options in the state,” Bramnick said. “But the Murphy option is sell assets. Dangerous. And the public is going to reject it.”

Bramnick gave the example of Gov. Jon Corzine looking into privatizing highways. People got nervous about potential toll hikes, and the plan was dropped.

Responses to the RFQ are due by Feb. 22. At that point, he state will pick one or more advisers after interviewing the top firms.


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KENTUCKY

http://www.weku.fm/post/kentucky-uni...ed-legislature
Quote:
Kentucky University Pension Option Filed In The Legislature

Spoiler:
What administrators at many of Kentucky’s public higher education institutions may view as a partial remedy to increasing pension costs is now before Kentucky lawmakers.

Listen Listening...1:11
The bill was filed by Representative James Tipton, who chairs his chambers' budget review committee on postsecondary education.

“It would allow them the opportunity to consider a buy out of the Kentucky Retirement System. It would give them an opportunity to get those actuarial numbers from the KRS board and then they could make a determination if it was feasible for them to pursue that as an option going forward with their retirement system,” said Tipton.

The legislation affects Eastern Kentucky, Morehead, Murray, Western, and Northern Kentucky universities. UK or U of L aren't affected.

In an email this week to faculty and staff, EKU President Michael Benson said the Kentucky Employee Retirement System required just over $13 million from Eastern this fiscal year. Without legislative action, Benson says that contribution would jump to almost $23 million next fiscal year.


https://www.bgdailynews.com/news/wku...41e72780e.html
Quote:
WKU supports bill allowing it to opt out of state pension system

Spoiler:
As it seeks to contain costs, Western Kentucky University is endorsing new legislation that would allow the state’s regional universities and community colleges to opt out of the Kentucky Employees Retirement System – at a price.

House Bill 358 was introduced Wednesday by state Rep. James Tipton, R-Taylorsville. The bill allows withdrawing from KERS, provided the higher education institution pays the full cost of benefits accrued by its current and former employees in the system, along with any benefits accrued by employees who elect to remain in the system. The proposed deadline to leave the system is Dec. 31, 2019.

The bill does not apply to the University of Louisville and the University of Kentucky, which already have their own retirement plans.

“We are in support of HB 358 and have worked in coordination with the other public universities in KERS to come up with a solution that will provide us some stability in our KERS contributions and therefore stability in our budgeting process,” WKU spokesman Bob Skipper said in an email to the Daily News.

“We especially want to thank Rep. James Tipton for his leadership on this bill,” Skipper wrote.

WKU President Timothy Caboni also wrote favorably of the bill Wednesday in an email to the university’s faculty and staff. WKU participates in both KERS and the Kentucky Teachers’ Retirement System.

Caboni said employees who choose to leave KERS under the proposed legislation would be able to change to the university’s Optional Retirement Plan.

“The extraordinary rise in employer contribution costs under the KERS system has created serious budget challenges for participating state universities,” Caboni wrote in the email.

“Currently, WKU contributed 49.47 percent of each employee’s salary. Unless the legislature enacts pension reform this session, this will increase to 83.43 percent, effective July 1, 2019,” the email read. “This increase in the KERS rate creates an additional $7 million charge in next year’s budget, including grants, contracts and auxiliary services.”

In exchange for withdrawing, the costs the institution pays will be fixed “and the postsecondary education institution shall not be subject to any increases or subsequent adjustments,” once the first payment is made after leaving the system.

Payments can be made in either a lump sum or through installments over a maximum 25-year period at a 5.25 percent interest rate per year.

The legislation also stipulates that “the rights of recipients and the vested rights of active members or inactive members accrued as of the postsecondary education institution’s effective cessation date shall not be impaired or reduced in any manner as a result of the postsecondary education institution ceasing participation in the system.”


https://maysville-online.com/top-sto...n-bill-wording
Quote:
Bill would remove pension bill wording

Spoiler:
FRANKFORT — The Kentucky House Democratic Caucus signed on to a bill that would remove Senate Bill 151 from the state statute.

SB 151 was passed during the 2018 legislative session, but was titled as a sewage bill.

It would have put new teacher hires into a hybrid cash balance plan which would require them to contribute a specified amount to the account and limited the amount of sick days teachers could accrue to put toward their retirement.

In December 2018, the bill was struck down as unconstitutional by the Kentucky Supreme Court as it did not adhere to the “three readings requirement” which states that all bills must be read three times before being passed.

According to Brian Wilkerson with the legislative research commission, House Bill 401 would officially erase the bill from the state statute though the bill has already been struck down.

“Although the 2018 law was unanimously struck down by the Kentucky Supreme Court in December, its language remains on the books,” Wilkerson said.

Kentucky State Rep. John Sims Jr. said he supports HB 401 because he did not like the way the original pension bill was passed.

“I support this,” he said. “I never voted for the original pension bill because of the way it was introduced. The whole process wasn’t right.”

Kentucky State Rep. Joe Graviss, one of the sponsors of the bill said he believed the new bill was necessary in order to remove the bill entirely.

“I have had many tell me how grateful they are that the ‘sewer’ bill was ultimately not enacted, because it would have reduced benefits for many public workers; it would have made it tougher to hire and retain future teachers and state and local government employees; and it would have cost taxpayers much more than maintaining the path we set six years ago. Like a lot of bad laws that are no longer enforced, this one should be removed completely,” he said.


https://www.wymt.com/content/news/La...505905391.html
Quote:
Lawmakers still debating pension reform halfway through general session

Spoiler:
FRANKFORT, Ky. (WYMT/WKYT) - About halfway through the general session, lawmakers are still discussing what action to take, if any, concerning pension reform.


Senate President Robert Stivers told sister station WKYT that Senator Chris McDaniel filed a bill dealing with phasing in and establishing a somewhat new retirement system for Kentucky educators and county employees.

But lawmakers are still focusing a lot of attention on the teachers' retirement system.

"We've had some informal discussions about some possible solutions. Actually, some are happening today and over the weekend about is there an ability to reach some type of agreement or do we need to hear more information or get more people involved to do more actuarial analysis," said Stivers. "But the process, even though not visible out front, is very active behind the scenes."

Democrats said they appreciate that nothing has been rushed through so far.

"I think we are still working and that is a good thing. The problem with the pension bill last session was that it was rolled out quickly and without enough thought and without enough input," said Senator Morgan McGarvey. "So as we continue to get those thoughts, input and facts I don't think a bill is ready at this point and that's okay. We will continue working and if need be to have a special session or address it next year."

Friday was the last day for bills to be filed in the Senate. Bills in the House can be filed until Wednesday.

"The most important thing with the pensions is that we get it right," said McGarvey. "We have to take the time to get it right."

Leadership in the House and Senate are staying positive when it comes to pension reform.

"I'm still hopeful, we've still got a couple days left to file bills. I'm very hopeful something will come from that," said House Speaker David Osborne.

"I don't know what it may be. Might be a whole fix, might be a partial fix, might be a continuation but the process will go on," said Stivers.


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Old 02-18-2019, 09:25 AM
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NEW ORLEANS, LOUISIANA

https://www.firehouse.com/careers-ed...ighter-pension
Quote:
Accountant Stole $2M from New Orleans Firefighters
A Baton Rouge accountant stole roughly $2 million given to him for life insurance policies by the New Orleans Firefighters Pension and Relief Fund.


Spoiler:
Feb. 16--An accountant from Baton Rouge stole roughly $2 million that the historically troubled New Orleans Firefighters Pension and Relief Fund gave to him to invest in life insurance policies -- and then used the money to gamble, finance home improvements and pay off debts, federal prosecutors allege.

Wayne Triche faces charges of wire fraud and falsely reporting his income on several tax returns in a 38-count indictment handed up by a federal grand jury Thursday.

Triche didn't immediately respond to a message left for him at his office Friday.

According to the indictment, the New Orleans Firefighters Pension and Relief Fund loaned $5 million to a company that Triche co-founded so the firm could buy life insurance policies as investments that officials hoped would generate profits.

Life insurance holders will sometimes sell their policies to investors who hope that the benefits paid out by the policy will be more than it cost to purchase and maintain it.

Triche's company received more than $6 million in benefits from life insurance policies purchased as investments on behalf of the Firefighters Pension and Relief Fund, the feds said. But less than $3 million of that made its way back to the fund.

Triche took a large portion of that money and transferred it to a set of bank accounts under his control, said the indictment obtained by U.S. Attorney Peter Strasser's office.

The indictment highlights 34 unauthorized transactions totaling more than $1.8 million between 2013 and 2016. Aside from gambling, home improvements and credit card payments, Triche used the money to pay a civil judgment and cover other living expenses, the indictment said.

He then failed to report that income on his 2011 to 2014 tax returns, the government said.

Triche could face up to 20 years in prison and a fine of $250,000 if convicted of the charges, which resulted from an investigation by the FBI and IRS.

Attorney Louis Robein represents New Orleans firefighters in pension issues and said Thursday that retirement fund officials had cooperated with the feds. He declined further comment, citing the pending case.

The fund collects money that firefighters and the city pay toward their retirement. It invests that money and then pays out benefits as necessary.

It has long been underfunded because of low city payments as well as investments that have performed poorly.

Triche founded American Pension Consultants along with George Russell in 2002 records show. He assumed control of the company after Russell died a few years later, according to the indictment.

An arraignment date for Triche hadn't immediately been set Friday.


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