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  #441  
Old 03-06-2019, 05:27 PM
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KENTUCKY

https://www.kentucky.com/news/local/...227095769.html

Quote:
‘Prepared to strike.’ Educator advocacy group draws ‘lines in the sand.’

Spoiler:
Leaders of the advocacy group Kentucky 120 United, composed largely of teachers, say they are “prepared to strike” if the General Assembly moves on several issues, including charter schools and scholarship tax credits.

“We, the Public Employees of the Commonwealth of Kentucky, are prepared to strike for the betterment of our state, the survival of our communities, and the economic security of our families if the Kentucky General Assembly does any of the following,” said a statement from the group posted Sunday that included some demands.

Jeni Bolander, a leader in the group in Lexington and a Fayette County teacher, told the Herald-Leader Monday that “we have to wait on them to move because that’s basically how ultimatums work.”

“We’ve given them the lines in the sand, so if they move, we move,” said Bolander. “The ball’s in their court.”

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Officials from the Kentucky Education Association declined to comment Monday afternoon on the new strike threat.

Kentucky law does not allow public employees to strike but teachers in the state have held “sickout” days to protest legislative issues.

The Kentucky 120 United statement posted Sunday cited as cause for a strike an attempt to provide scholarship tax credits for private schools which it said would reduce public money available to public schools, attempts to create a funding mechanism for charter schools. attempts to reduce defined benefit pension benefits to public employees, attempts to remove new and future school employees from the inviolable contract and attempts to reduce salaries of public employees.


“These are our lines in the sand. Enough is enough,” the statement said.

Classes on Feb. 28 were canceled in Fayette, Jefferson and other school districts following Kentucky 120 United’s call for a sickout. Teachers said they were concerned about several pieces of legislation, including one that would restructure the board that oversees the Teachers’ Retirement System.

House Bill 205 is on the agenda for the Tuesday meeting of the House Appropriations and Revenue Committee for discussion only, not for a vote.


Earlier on Monday, superintendents across the state held news conferences saying they opposed House BIll 205 because a scholarship tax credit program would take money from an already underfunded public school system

The Kentucky 120 United statement on Sunday said the group had “ exhausted all methods of communication with our legislators” and that lawmakers had continued to “ ignore our pleas to end these attacks.”

“They continue to ignore our plea for new sources of revenue (casino gaming, medical marijuana tax, etc) to secure the public pensions and prevent the constant cuts to vital services. For the past year we have actively and diligently worked with both political parties to develop a permanent solution to no avail,” the statement said.

Senate Minority Leader Morgan McGarvey, D-Louisville, said in a floor speech Monday that he hopes lawmakers will not consider scholarship tax credits.

“That would remove $25 million from our already cash-strapped public schools.,” he said. “That is not something we can afford for a system which we have not fully funded for more than a decade.”

Senate President Robert Stivers, R-Manchester, said he has not seen the demands of KY 120 United. Regarding scholarship tax credits, Stivers said there’s a bill in the House that deals with that issue but noted neither the House nor Senate version of this year’s tax bill, House Bill 354, contains the credits.

The House and Senate are expected to form a conference committee Tuesday or Wednesday made up of members of both chambers to try to iron out differences between the chambers’ tax plans. Stivers said he would not want to speculate on what the conference committee will do, “but I’m sure there will be a discussion about multiple issues.”

Charter schools is one issue Kentucky teachers have been watching carefully. The General Assembly approved charter schools in Kentucky for the first time in 2017, but no charter schools have opened. Potential operators say they are in limbo. That’s because in 2018 and so far in 2019, the General Assembly has not approved a funding mechanism for charter schools.




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  #442  
Old 03-06-2019, 05:28 PM
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NEW JERSEY

https://www.pionline.com/article/201...e-pension-fund
Quote:
N.J. governor pushes for higher contribution to state pension fund

Spoiler:
New Jersey Gov. Phil Murphy on Tuesday proposed raising the state's general fund contribution to the New Jersey Pension Fund, Trenton, to $3.75 billion for the fiscal year beginning July 1, an increase over the $3.2 billion slated for the current fiscal year.

Mr. Murphy made his recommendation in his budget message to a joint session of the New Jersey legislature in Trenton, according to a transcript of his remarks.

Although the proposed amount is the largest in the pension fund's history, it still only represents 70% of the actuarially determined contribution. The current fiscal year's contribution represents 60% of the actuarially determined contribution.

RELATED COVERAGE
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Mr. Murphy has pledged to increase state contributions by 10-percentage-point annual increments — a practice started by former Gov. Chris Christie — until 100% annual contributions are reached.

The general fund contributions augment the estimated $1 billion annual contribution to the $70.9 billion pension fund via the New Jersey Lottery. Mr. Christie signed a law in July 2017 transferring the lottery to the pension fund as a pension fund asset.

Last month, the state Treasurer's office issued a request for qualifications, seeking financial advisory firms that could help determine if converting other state assets — such as roads, transit facilities and airports — could be used like the lottery to help support the pension fund.

Mr. Murphy's budget proposal contains about $1.1 billion in savings, most notably in public employee health benefits, as well as tax increases on the state's wealthiest residents.

For the current fiscal year, Mr. Murphy signed a law increasing taxes on residents who earned $5 million or more. For the upcoming year, he wants the tax extended to those earning $1 million or more, according to the budget document.

Negotiations with the Legislature portend to be contentious given legislators' reluctance to raise taxes.

"I understand the budget I am proposing today will not be identical to the one I will ultimately sign," the transcript of Mr. Murphy's remarks said. "We will talk, we will negotiate, and we will compromise. That is as it should be."

Beyond the negotiations for the next fiscal year, independent sources have raised concerns about the current fiscal year, saying the state's revenue through January is behind the revenue predictions the governor made.

Total tax collections through January 2019 were 2.9% higher than the corresponding year-ago period, a Feb. 21 report by the Office of Legislative Services said. The governor's budget for the current fiscal is counting on a 7.2% full-year growth vs. fiscal 2018, the report said.

"Expectations that weak estimated payments in December would recover in January were not met," the report said.

"Continued revenue growth below current fiscal 2019 budget targets could point to longer economic and revenue pressure," a Feb. 25 report by S&P Global said.

For example, gross income taxes through January were down 6% vs. the same period last year. The governor's budget for the full fiscal 2019 calls for a 5.4% gain vs. the previous fiscal year.

"While a major portion of income tax is received in April ... the extended revenue shortfalls in the first half of the year will make catching up by the end of the year more difficult," S&P said, "even if currently slow revenue trends reverse."


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  #443  
Old 03-07-2019, 06:28 AM
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KANSAS CITY, MISSOURI

https://www.thepitchkc.com/news/arti...loyee-pensions

Quote:
Kansas City's mayoral candidates on funding municipal employee pensions
A boring but important issue.
Spoiler:
Over the last few weeks, we’ve been speaking with Kansas City mayoral candidates about how they’d use the office to approach the biggest challenges facing Kansas City. (Pick up our March issue, out now, for a preview of the race.)

As of the end of the 2018 fiscal year (last April), Kansas City, Missouri, is $733.3 million behind on its pension commitments to municipal employees.

Mayor Sly James has appointed a task force to look into how the city can continue to fund employee pensions without further bankrupting the city, which is already sitting on nearly $2.7 billion of long-term debt.

We asked each candidate what their plan would be to deal with escalating pension and benefits costs for city employees, and if they would be open to reforming how the city deals with pensions. Most of the candidates agreed on the importance of keeping the city’s pension promises to its employees. Some of them are waiting for the report from the mayor’s task force to decide how they would move forward, while others floated ideas like working to increase the city’s population to add to the tax base and making cuts to the pensions of the highest-paid city employees.

Alissia Canady

“We need to fully explore it. [Pensions are important] to municipal employees — that was a promise that we made. We need to be able to deliver on that and fund the pensions adequately. My understanding is that we’ve fully funded it at least these last five years, which is a good start. But we need to make sure that according to the best practices, we are aggressively investing in that area to make sure that we don’t have a negative impact on the city’s credit rating later.”

Henry Klein

“A pension is this wonderful thing that really feels like it's becoming a relic of the past, but I don't want it to become that … I don't want to obliterate pensions, especially when the compact that we have always had unspoken was: You work at city government, you don't make as much money, but we take care of you in retirement … I'm way more interested in reforming pensions as it relates to the higher end of those pensions in terms of people who are drawing excessively large amounts of dollars of pension. I'm more interested in reforming that high end. Taking away from that person who is at the lower end of the income scale and now reducing their pensions more feels like a really mean-spirited, wrong thing to do … Do I want to make sure that we keep pensions solvent? Of course I do. Do I also want to make sure that we aren't contributing so much to pensions that we can't do all the other things that we need to do in terms of city government surplus? Of course. I see the higher end is the area that I want to focus on.”

Jermaine Reed

“It's important that we protect our pensions, so let's be very clear about that. The second part of it is that I do think that it is something that we have to tackle, and the next mayor and council is going to be responsible for protecting the pensions that are in place … I don't think that this is something that should be too rushed or done in a vacuum. There are a number of important stakeholders. Our employees are our most valued assets. There are over 5,000 of them throughout this entire city. They are residents of this community, just like all of us. And it's important that we are being fair and honest and being able to protect their pension.”

Jolie Justus

“The way that they're being currently done is not working right now. Right now, we have a task force that is made up of folks who are representing city workers and folks who are going to be future pension earners. I would also have a lot of great minds in the business and civic community taking a look at that. So what I would like to do is get their report back, take a look at all of the options that are in front of us, and then make the decisions we need to make sure that we are not underfunding our pension and that we are focusing on a long-term solution that won't bankrupt the city.”

Phil Glynn

“I think that retirement security is a really important part of the agreement between workers and management. Retirement security is also important to our whole community because when people feel they have financial security, they buy goods and services and they spend money. Having a robust retirement security system in Kansas City is something that is good for everybody. Clearly, we have long-term fiscal challenges in Kansas City. I am more focused on trying to ensure that we are not overusing our tax incentive program, which erodes our tax base over the long-term. I'm more focused on ensuring that we spend the resources that we have today wisely. Those are the avenues I want to go on to address so long fiscal challenges.”

Quinton Lucas

“First of all, I do believe, unlike some others, that a pension is a contract … I think when we talk about reform, it's about how do we make sure that as people are entering the program, there are different ways that we’re funding retirement. I think there's another important point in those programs themselves: how do we make sure we are [funding] them sufficiently, and that the city’s making its annual contributions as it should be? I think there are more responsible measures we can take to try to deal with it. And frankly, how is it that we can ensure that we have enough tax base to address those issues? A big part of it is going to be having a population in Kansas City. I'd like to continue to see us increase population in the city without incentivizing it. Part of that is how do we see development in Kansas City in the long-term? … I hate commissions, appointing blue ribbon commissions, so let's say I won't. I'll actually just try to find an expert or several, who will talk to others, instead of having an ex-city council member or state representative, or some other people who don't know what the hell they're talking about. Let's actually find one of the best experts in the country to address the issue, have them visit with different groups in Kansas City and come up with a real solution.”

Scott Taylor

“One thing I would be careful on with pensions: with city employees, firefighters, police, it's really a recruitment tool as well. Police and fire, and obviously first responders, are some of our most difficult jobs out there — and some of our city jobs are very dangerous also. And quite frankly, we — just like other municipalities — can't pay enough for what the risk and danger that they put themselves out for. We just will never be able to pay them as much as they will get in the private sector … We have some [employees] that are retiring after 30, 35 years. We recognize them in each session. There's always one or two people a week, it seems like, it's amazing, the dedication we see. I don't think most everyday citizens necessarily see it, because they're at a desk or on the phone, but they really do go above and beyond what's asked. And we want to keep people coming into the city to work … .And so the pension is a key part of it. Now, whether we can make changes, I think we can sit down. We need to do it in a collaborative manner and not a divisive manner. And that's something I think my style is — my whole life has been getting people in a room. I transact and put people together and put things together to get results. So I think that's kind of the same discussion. We need to have a pension. It should be an ongoing discussion out of respect and collaboration.”

Scott Wagner

“In about three years, at least two of those [the city’s] pension programs [there are four total] are going to be upside down. We are currently paying the appropriate contributions to keep them at the state-required levels that we have. That will begin to change in the next two or three years. There’s actually a discussion going on right now related to pension reform — the second one that has occurred over the past eight years. I’d like to see what they come up with, because the issues that we’re talking about are big ones as far as what we may have to do in order to shore them up in the longer term. Those are issues that, quite honestly, will involve collective bargaining agreements with all of our bargaining units. They’re going to be tough conversations, but the reality is that every city in this country is behind on their pension. I know of no city that is 100 percent fully funding its system. We are in a lot better position. We have fiscal challenges, frankly as a result of the obligations that we are paying right now. But I’m going to wait and see what we hear from the second pension task force and then go from there.”

Steve Miller

“[Pensions are] a serious issue. And I bring that back to my experience with leadership: This is actually something that I had to address in leadership on the State Highway Commission. I had a plan that was in much worse shape than Kansas City. The City of Kansas City supports about 74-75 percent of funded pensions. When I came into MoDOT they were only at about 7 percent. Now — it is complicated. You have to figure out how to pay into the promises of the people that gave to the organization based on these benefits and how we remain fiscally liable. I know from having already done this once, it is a hard, tough, process. It takes really smart people, actuaries, investment advisors, and this is going to be something that we are going to wrestle with. Mayor James has already appointed a committee to examine this issue, so I am eager to see what recommendations are made public. It's like I said before, the mayor, along with the city manager, and the rest of the city council need to be concerned about being fiscally responsible. And part of that is figuring out how we manage our pension and benefit plans.”


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  #444  
Old 03-07-2019, 06:29 AM
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ILLINOIS
FORFEITURE

https://patch.com/illinois/crystalla...-pension-fight
Quote:
Further Delays Likely In Gliniewicz Pension Fight
Melodie Gliniewicz is hoping to get her late husband's police pension, which amounts to $50,000 to $70,000 per year.

Spoiler:
LAKE COUNTY, IL — The wife of Joe Gliniewicz could see further delays in obtaining her late husband's pension after a Lake County judge extended a legal gag order that forbids anyone from releasing sensitive videos or information regarding Melodie Gliniewicz's criminal case, the Daily Herald is reporting. Lake County Judge James Booras ruled Tuesday that the information could not be shared during any non-trial hearings until the criminal matter had been settled. Melodie Gliniewicz is set to head to trial in July on allegations she assisted her husband in stealing thousands from the Fox Lake Explorer group prior to the late cop's highly-publicized death.

Melodie Gliniewicz is hoping to get her late husband's police pension, which amounts to $50,000 to $70,000 per year, according to the article, but Fox Lake officials have not agreed upon how much she should get.

Melodie Gliniewicz was indicted by a grand jury earlier this year following an investigation into an embezzlement scheme that ended up robbing the Fox Lake Explorers program of thousands of dollars. Police said Lt. Gliniewicz staged his own murder after embezzling funds from the Explorer program for years. He was found shot dead in Fox Lake on Sept. 1. Authorities later determined he took his own life.

Melodie Gliniewicz played a "fiduciary role as an adult advisor with the Fox Lake Police Explorer Post," which was run by her late husband, Lake County Sheriff's Office Detective Christopher Covelli said in a news release following Melodie Glineiwicz's indictment.

Detectives determined some of the personal expenses paid from the police explorer account included a trip to Hawaii, payments to businesses such as Starbucks, Dunkin Donuts, Fox Lake Theatre, and over 400 restaurant charges, Covelli said.

Officials said Gliniewicz could face anywhere from probation to seven years in prison if convicted on the charges, the Lake County News-Sun reports.


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Old 03-07-2019, 06:29 AM
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TEXAS

https://trta.org/texas-house-propose...inance-system/

Quote:
Texas House Proposes Sweeping Reforms to TRS Pension Plan and School Finance System

Spoiler:
Members of the Texas House of Representatives held a press conference today to announce the House plan to fund public education and the TRS. House Speaker Dennis Bonnen (R – Angleton) who was surrounded by a majority of the members of the House from both parties introduced the plan and threw his leadership weight behind the legislation.

The plan includes HB 3 related to school finance by Dan Huberty (R-Kingswood) who serves as chair of the public education committee and HB 9 by Greg Bonnen (R-Friendswood) who serves as chair of the appropriations subcommittee that handles education and TRS funding.

Huberty described his bill, HB 3, as a comprehensive plan including over 9 billion dollars to reform the school finance and education system and reduce school property taxes. Bonnen’s bill, HB 9, proposes to make the TRS pension fund actuarially sound and provide a 13thcheck (not to exceed $2,400) to retired educators.

Together these bills seek to provide support to every Texas school and the students they serve and recognize and support public educators from recruitment to retirement. Both Huberty and Bonnen stressed the urgency of taking action on these issues during this session.

“Making TRS actuarially sound treats teachers like the professionals they are,” Bonnen said. “Retired teachers are at the forefront of all we do this session.”

HB 9 would make the pension fund actuarially sound by raising the state contribution to TRS to 8.8 percent over time as well as provide a one-time payment to retired teachers. The current state contribution rate is 6.8 percent, and is the lowest in the nation among non-mandatory Social Security states.

The next step for HB 9 is to receive a committee hearing.

Yesterday, Sen. Joan Huffman (R – Houston) filed, SB 12, which would make the TRS fund actuarially sound and provide a one-time supplemental payment (capped at $500) to retirees. Lt. Gov. Dan Patrick issued a press release about SB 12, which you may read here. The actions in the Senate and House are great first steps to reaching TRTA’s legislative priorities this session and demonstrate that both houses of the Legislature are willing to work with TRTA to make positive progress for retired educators.

Both the Senate and the House are talking about real funding solutions for TRS and raising the base. However, these bills are not a done deal, and they have a lot of room for development. The development is going to include retiree input. It’s up to us to support and communicate with legislators.

TRTA members, your legislators are listening! The march is on to make headway on bills relating to your retirement! We want to see the Texas Legislature #RAISETHEBASE to improve the health of the TRS pension fund and TRS-Care fund.

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  #446  
Old 03-07-2019, 06:30 AM
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HOLLYWOOD, FLORIDA

https://www.sun-sentinel.com/local/b...306-story.html
Quote:
Hollywood cut pension benefits in 2011. Eight years later, they're being restored.

Spoiler:
Slashed pay and extreme pension cuts caused a rift between Hollywood and its police and firefighters that has lasted almost a decade.

Hollywood took steps to end the feud with the city’s firefighters on Wednesday, a month after mending fences with police.

A plan that would restore pension benefits at an estimated cost of $2.6 million a year won unanimous commission approval. A final vote will take place on March 20.

“Long overdue,” Commissioner Peter Hernandez said before Wednesday’s vote.

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A similar measure for police won approval last month. It will cost an estimated $4.5 million a year.

Hollywood already spends an estimated $50 million on pension legacy costs, city officials say.

Feud over pay cuts nears end as Hollywood makes peace with its cops
Assistant City Manager George Keller called the pension restoration plan a “landmark decision” that will help the city close the door on a painful past.

Back in 2011, Hollywood leaders were desperate to find a way to close a $38 million budget shortfall and declared financial urgency. To bridge the gap, they cut the pay and pension benefits for all city employees, including police and firefighters.

“Since 2011, we have slowly pieced things back together,” fire union leader Bill Huddleston said before Wednesday’s vote.

“Today is a happy day for me,” said Commissioner Linda Sherwood, prompting loud applause from dozens of firefighters in the audience.

Mayor Josh Levy made note of the full house and called the vote a historic moment.

“As we’re turning the tide, let’s all support and promote the city of Hollywood,” he said. “Let’s attract fellow firefighters and police officers who work in other jurisdictions.”

Next up: Commissioners are expected to approve a three-year contract for the fire department’s rank and file on March 20, the same day they give final approval to the pension proposal.


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Old 03-07-2019, 06:32 AM
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CALIFORNIA

http://www.foxandhoundsdaily.com/201...lifornia-rule/
Quote:
An Initiative is the Way to Bring Sense to the “California Rule”
Spoiler:
I guess this is what the initiative process was made for. While officials won’t act on major pension reforms and the court doesn’t engage on the basic issue dealing with the public employee pension structure, which is putting immense pressure on local government budgets, an initiative may be necessary to bring sense to the “California Rule.”

By now you know the California Supreme Court made a narrow decision in the Cal Fire Local 2881 v. California Public Employees’ Retirement System. The court focused on the issue immediately before it, dealing with whether particular benefits such as buying years to inflate work time on which pension benefits are calculated are vested rights and prohibiting them is a violation of the state constitution. The court said no.

But the court stayed away from the California Rule created by a lower court decision 60 years ago that essentially says benefits given to a public employee at the time of being hired cannot be reduced unless an equal compensation is granted.

As pension and health care costs for employees continue to grow so that they crowd out spending on other government responsibilities, major efforts to rein in the growth are thwarted by the California Rule.

Those who want to change the rule do not want to unmercifully reduce pensions or take away pension dollars already earned by workers. They would like to see legislative bodies have the ability to reduce future benefits that have yet to be earned.

Meanwhile, numerous tax increases are popping up all around the state. While the taxes are supposedly dedicated for funding civic services much of the tax is to deal with the growing pension section of the budgets.

The Supreme Court still may take the opportunity to act on this issue given other pension cases in the pipeline, but it is a problem the court missed an opportunity to address.

California voters, to get around a recalcitrant government, accepted the initiative process as an avenue to create reforms. Polling tells us the initiative process is widely approved by today’s voters in the Golden State, so a potential road to set reasonable and sustainable public employee pensions might be via an initiative.

It won’t be easy. Public unions will fight reform of the California Rule with all they have. And they have plenty.

However, voters in San Jose and San Diego have shown they support pension reform when local reforms were presented to them. Leaders of those efforts, former San Jose mayor Chuck Reed who runs the Retirement Security Initiative, and former San Diego city councilman Carl DeMaio of Reform California are still working on plans to improve the state pension system, which could result in an initiative.

While there are still pension cases on the way to the Supreme Court, patience may dictate a wait-and-see attitude. But if the pressure builds on state and local budgets and on taxpayers who will be asked to dig deeper into their pockets to fund public retirement systems while trying to have enough left over for their own retirements, don’t be surprised if crusaders consider an initiative the best way to reform the California Rule.


https://calmatters.org/articles/comm...pension-issue/
Quote:
State Supreme Court ducks key pension issue

Spoiler:
The state Supreme Court could have addressed a fundamental issue in California’s public employee pension crisis – whether the so-called “California rule” makes it impossible to reduce benefits.

However, the court punted this week, ruling that since the Legislature and former Gov. Jerry Brown legitimately eliminated a way that workers could pump up their pensions in 2012, called “airtime,” it didn’t need to weigh the constitutionality of the California rule.

The rule, stemming from a 1955 Supreme Court decision, essentially says that once someone is hired by a public agency, whatever pension plan was in effect at the time can never be altered for that employee.

The 2012 pension reform lowered potential benefits for future employees of state and local governments, but not those of current employees and retirees. However, it did eliminate the long-standing ability of workers to buy “airtime” – up to five years of service credit that would increase their pensions.

A firefighter union sued, claiming that the right to buy airtime was protected by the California rule, but lost at the trial and appellate levels, tossing the issue to the Supreme Court.

Brown and many other officials, citing rapidly rising pension costs, hoped that the court would find, as did an appellate court, that the California rule is invalid, thereby allowing governments to negotiate reduced benefits for future work and thus lower costs. Their pleas, however, fell on deaf ears in the Supreme Court, as its very narrow ruling showed.

With the California rule still in place, pension costs will continue to escalate sharply to make up for severe investment losses that the California Public Employees Retirement System (CalPERS) and other pension trust funds experienced during the Great Recession a decade ago, plus increases in the number of retirees and higher benefits.

CalPERS has scarcely two-thirds of the assets it needs to cover promised pension benefits even though it says in a report issued late last year that payments by government employers have nearly tripled from $6.9 billion in 2009 to $19.9 billion in 2018. Payments by employees, who do not pay for unfunded liabilities, increased only from $3.9 billion to $4.4 billion per year.

Local governments have been hit the hardest. CalPERS says mandatory pension payments for police officers and firefighters will average 49 percent of their pay this year, with top rates for 24 local governments hitting 70 percent or more.

It’s widely expected that average police and fire pension costs could top 75 percent within a few years and hit 100 percent in some local governments. Local officials have pleaded with CalPERS and the Legislature to do something about the situation, but so far have failed.

Meanwhile, hundreds of cities and counties have asked their local voters in the past two election cycles to approve tax increases – sales taxes, mostly – to meet their rising pension costs, although they typically do not cite pensions as the reason. Instead, officials vaguely promise the extra revenue will be used to enhance popular police, fire and parks services.

Were the economy to turn sour again, some cities could be forced into bankruptcy. High pension costs were major factors in the recent bankruptcies of three California cities – Vallejo, Stockton and San Bernardino – and in the Stockton case, the presiding federal bankruptcy judge declared that pension benefits could be reduced despite the California rule.

Stockton didn’t take that option, but if the situation deteriorates, bankruptcy courts might become the next judicial battleground over the California rule.


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Old 03-07-2019, 10:56 AM
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NEW YORK
ESG

https://www.pionline.com/article/201...07#cci_r=73393

Quote:
DiNapoli files shareholder proposals at 4 companies with no women on their boards

Spoiler:
New York State Comptroller Thomas P. DiNapoli has filed shareholder proposals at four portfolio companies seeking increased board diversity, spokesman Matt Sweeney confirmed in an email. The four companies — Gaming and Leisure Properties, New Residential Investment Corp., Sinclair Broadcast Group and Trip Advisor — have no women directors on their boards of directors.

"Research has shown that companies with diverse boards perform better," Mr. DiNapoli said Wednedsay in a news release. "Lack of diversity puts companies at a competitive disadvantage. And when companies fail to address shareholder concerns over lack of diversity they demonstrate a lack of accountability."

Mr. DiNapoli, sole trustee of the $204.4 billion New York State Common Retirement Fund, Albany, has so far filed proposals seeking board diversity policies at 33 companies on behalf of the fund. The fund has also adopted a proxy voting policy to oppose all incumbent board directors at companies that have no women directors.

RELATED COVERAGE
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"We've put our portfolio companies on notice that we want them to be responsive and adopt best practices when it comes to the composition of their boards," he said.

In addition, in cases in which companies have only one woman on their boards, the fund will vote against all incumbent nominating committee members.

DiNapoli wrote to more than 200 companies in the Russell 3000 Index with no women directors in September, informing them of the fund's recent votes against their directors. The letter also called on the companies to explain to investors how they would address concerns of a lack of diversity.


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Old 03-08-2019, 08:41 AM
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CALIFORNIA

https://climaterwc.com/2019/03/06/ri...r-unavoidable/
Quote:
Rising Tide of Pension Costs Threatens Government Services: is “Underwater” Unavoidable?

Spoiler:
California’s finances face a giant wave in the form of employee pensions. While Redwood City has taken steps to guard against it, the breaker still threatens to dampen the city’s future.

When Gavin Newsom took over the reins of the state government from Jerry Brown in January, he expressed a sense of unlimited possibilities. The state’s finances, which had been suffering since the 2007-09 recession, recovered under the tight-fisted Brown, who left a projected budget surplus of $21.5 billion. That allowed Governor Newsom to proclaim “We will be bold” in adding money for full-day kindergarten and child-care services, free community college, and other programs.

But those promises are undermined by a much bigger number—the unfunded liabilities to pay pensions for state workers and teachers, officially estimated at $256 billion.

And even that figure could be way too low.

The Federal Reserve System last fall released its own calculations, using the same methodology it uses for its own employee pensions.

It found that California’s combined pension systems had $785 billion in assets and $1.53 billion in liabilities, only a 51 percent funded ratio. That means there are $750 billion in benefits that must be paid without a clear way of paying for them–nearly $19,000 for each California resident.

The major difference is that the California Public Employees Retirement System assumes the investment portfolios held to pay pensions will grow at a rate of at least 7 percent a year. The Fed calculation uses a range of possible investment returns. Taxpayer advocate Jack Dean operates a Fullerton-based website called Pension Tsunami that features a picture of a big wave approaching. It warns of “multiple pension crises that are about to drown America’s taxpayers.” “What’s unfortunate is that most people will never realize that almost all the tax increases being heaped on them will be due to escalating pension costs,” Dean said.

The pension problem affects citizens at every level of government, from the state to San Mateo County to cities and school districts.

According to the report of the 2017-18 San Mateo County Grand Jury, Redwood City pension costs are expected to almost double, from $21.2 million in 2017-18 to $40 million in 2024-25. On average, that’s an increase of $2.67 million a year, or 12.6 percent.

The grand jury report looked at the pension issue and came to a sobering conclusion.

“Rising pension costs will require cities over the next seven years to nearly double the percentage of their general fund dollars they pay to CalPERS,” the grand jury report said, quoting the League of California Cities. “[u]nder current law, cities have two choices – attempt to increase revenue or reduce services. Given that police and fire services comprise a large percentage of city general fund budgets, public safety, including response time, will likely be impacted.”

While Redwood City’s budget is balanced now, thanks in part to the recent half-cent sales tax increase, it faces unfunded pension and retiree health liabilities officially estimated at $296.4 million, or $3,419 for each of the city’s 86,685 residents.

Redwood City has 557 active employees, and even more retired members and beneficiaries—333 from public safety and 529 from other jobs as of June 2017.

The highest Redwood City pension in 2017 went to retired Fire Chief James F. Skinner, $209,619 for 34 years of service, according to Transparent California, which makes it easier to find salaries and pensions for state, county, city, and school district workers.

The grand jury report projects Redwood City will pay 42.7 percent of its regular payroll for pensions in 2025, up from 26.3 percent in 2016-17. For public safety officers, the contribution will be much higher, 65.6 percent. A portion of the increase is paid by employees through payroll deductions.

But the actual cost is likely to be higher. Currently, the cities pay in based on the CalPERS assumption they will earn a return of 7.5 percent on their investments. The factor is being reduced to 7 percent in stages until 2020-21.

Still, that’s an aggressive return target. Preliminary estimates showed CalPERS actually lost 3.9 percent on its investments in 2018, a bad year for the stock market. CalPERS’ adviser estimates the average annual return for the next 10 years will be only 6.2 percent.

With the city having to face a higher payout every year, it has been trying to get out in front of the problem. “There are numerous instances in the Grand Jury report where the city’s sound financial practices are cited as examples of how other cities can proactively address the rising pension costs that are impacting cities across the state,” Assistant City Manager Kimbra McCarthy said.

The measures include:

Extra contributions — The city has funded a pension trust with an initial $10.5 million and plans to make additional contributions. “Those funds may be used in the future to help offset the city’s annual required pension contribution. The city has also made payments directly to CalPERS above and beyond the required minimum annual contribution, and is budgeted to continue to do so in the long-term forecast,” McCarthy said.

Cost-sharing — Redwood City has negotiated employee cost-sharing arrangements in which current employees contribute between 8 and 18 percent of their salary towards their pension costs. Neighboring cities like Atherton, Menlo Park, and Burlingame have also negotiated cost-sharing agreements with employees.

Higher taxes and fees — Last November, Redwood City voters narrowly approved Measure RR, a half-cent sales tax. Along with a half-cent county transportation sales tax voters also approved, it brought the city’s sales tax rate to 9.75 percent. It is expected to raise $8 million a year. A cannabis tax was also approved, expected to raise at least $300,000 a year. The city has also raised development fees by approximately $2 million a year.

Budget cuts — The sales tax increase meant that the city was able to restore $2.7 million to public safety, city staff, libraries, and after-school programs that were on the chopping block. One cut that wasn’t restored was the elimination of the Community Emergency Response Team coordinator position and the consolidation of the program with that of the county.

The city has found other internal efficiencies and changed service delivery methods, McCarthy noted.

Will all those steps be enough? “No, it is not expected that the estimated additional $8 million in new sales tax revenue will cover all future increases in operating costs and pension costs,” McCarthy said. “However, it will provide the city with relief through Fiscal Year 2021-22.”

She notes that a recommended budget for 2019-20 will be presented to the City Council in June, including the final long-term forecast.

If Measure RR hadn’t passed, forecast cuts would have included the number of on-duty firefighters, paramedics and police officers, leading to longer response times on 911 calls. As pension obligations grow, such cuts could be on the table again, since public safety expenditures make up 60 percent of the city’s budget.

Despite all the steps, the city’s plans are not fully funded. The city manager’s office says the Miscellaneous Plan budget category for non-safety employees was 67.5 percent funded as of June 2017, while the Safety Plan category was 63.1 percent, for an average of 65.1 percent funded.

That’s toward the bottom of San Mateo County cities. Funded percentages range from Portola Valley at 91.8 percent to San Carlos at 63.3 percent. In the middle are Menlo Park (74.4 percent) and Woodside (72.3 percent).

For private-sector plans, the federal government considers a funding percentage below 80 percent as at-risk.

Pension payments in San Mateo County are relatively moderate in comparison to what other cities and agencies face. According to the Los Angeles Times, Los Angeles pays dozens of retired employees, mostly police and firefighters, more than the $220,000 limit on pensions imposed by the Internal Revenue Service. That has forced the city to set up a separate fund that has cost $14.6 million for 110 employees since 2010.

The highest pensions paid by CalPERS in 2017 were $378,118 to former Solano County Administrator Michael D. Johnson and $349,194 to UCLA psychology professor Joaquin Fuster.

The pension wave has taken 87 years to become a monster. CalPERS was established in 1932 and has grown to encompass 1.9 million members in its retirement system.

Much of the problem dates to 1999, when the state was flush with cash from taxes paid on stock option gains during the dot-com boom. The Legislature and Governor Gray Davis sweetened the formula for pensions. Highway patrol officers—and later, police, firefighters, and prison guards—got a new formula called “3 percent at 50,” meaning a cop who started at age 25 could retire at age 50 with 25 years of service at 75 percent of pay.

The new formula led to a class of retired workers, now over 40,000, who receive $100,000 pensions or more. The checks are further bolstered by pension “spiking,” for example, by working massive overtime in the last years of service or getting a promotion a year or two ahead of retirement.

The system sailed along until 2008, when the bottom fell out of the stock market, and it became obvious that there wouldn’t be enough money.

In 2011, the state’s Little Hoover Commission found that “pensions will crush government” unless the formulas were altered. Its biggest recommendation was to reduce future pension accrual rates for current employees, especially police and fire.

Governor Brown responded with a reform package. After extensive negotiations, the Legislature passed the Public Employees Pension Reform Act of 2013. Among other changes, it reduces pension formulas and caps the salary that can be used to compute pensions. But there was one big part of the Little Hoover Commission’s plan that was missing—most of the limits only applied to workers hired after January 1, 2013.

“That helps a little bit,” said Robert Fellner, executive director of Transparent California. “The really big weakness is it’s only for future hires, and even then it’s only trimming around the edges.”

By law, employees earn pension credits at the rate that was in effect when they were hired. A 1955 California Supreme Court statement known as the California Rule means that once an employee is hired, the formulas can’t be reduced even for years they haven’t worked yet.

“If we don’t change the California Rule, we will bankrupt the state,” said Wayne Weingarten, senior fellow in business and economics at the Pacific Research Institute. “We’ll either have massive tax increases, or massive expenditure cuts. Either way, it’s economically devastating.”

A case involving the California Rule is currently before the California Supreme Court. A 2004 state law let public employees buy up to five extra years of pension credits—known as “air time”—before they retired. The Legislature took that right away in 2013, but Los Angeles firefighters challenged it, saying the change was unfair since air time was part of what they had been promised.

“The greed and disregard of the public unions is incredible,” Fellner said. “Jerry Brown’s reform was very, very minor and government unions are suing because they want provisions to spike their pensions.”

If the court rules against the firefighters, depending on the language, it could open the way for state and local government to negotiate with unions for reductions in benefits for future service.

But Steve Smith, communications director of the California Labor Federation, an umbrella organization representing most of the state’s unions, says workers are already giving back.

“Coming out of the Great Recession, it’s taken time for pension funds to recover, but we’ve seen steady returns since we got out of recession and continue to see pension funds get stronger and will remain solvent. Our unions have recognized that some cities are in a bit of a fiscal crisis and we’ve negotiated. Workers are paying more of their paychecks for pensions.”

“Workers entered into an agreement with local cities to have a fair retirement. It makes it difficult to plan if pensions are cut or switched to a 401(k), as a certain faction wants to do,” he said.

Smith said that while attention is focused on a relatively small subset of public safety workers, “You have to understand that job is dangerous, it’s taxing on the body, that’s what factored into those initial calculations.”

The average retired state employee gets a pension of around $25,000, he noted. Some also receive Social Security, others (like teachers) don’t, depending on the plan they’re in.

More comprehensive solutions appear to be off the table. The League of California Cities would like cities to be able to negotiate new formulas for the future service of pre-2013 employees, but that can’t be done under the California Rule.

What about adopting a defined contribution plan to replace the defined benefit plan, as many private employers have done? At this point, CalPERS doesn’t even offer one, and a bill that would have allowed new state workers to choose a defined contribution plan failed in the Legislature.

A few localities have made drastic cuts in pensions for new employees. In San Diego County, employees hired after July 1, 2018, get only 1.62 percent of their salary for each year worked, and not until age 65.

Some pension reform advocates would like to see cities get out of CalPERS entirely, but the system is as hard to leave as Hotel California. CalPERS charges districts that want to leave a large sum to make sure it can pay benefits already earned. It does this by reducing the assumed rate of return on investments down to 3 percent.

When Stockton filed for bankruptcy in 2012, it tried to reduce its $375 billion in unfunded pension obligations by buying its way out of CalPERS and switching to a different system. The agency threatened to sock it with a termination bill of $1.6 billion, effectively killing the plan. Bankruptcy judge Christopher Klein called it a “poison pill.”

A bill in the Legislature last year that would have allowed local governments to opt out of CalPERS without paying huge termination fees did not pass.

“We have a very large fiscal hole that has to be filled,” said Weingarten. “We’ll either have massive tax increases to fund it, or massive expenditure cuts. Either way, it’s economically devastating.”

He noted that with people living longer, an employee who works 30 years and is eligible to retire at 55 likely will be getting a pension for as long as they worked, or longer.

Several other states are in even worse shape. At the bottom is Illinois, where the funded ratio is only 25 percent by the Fed’s calculations.

“In Illinois, there’s no doubt people 70, 80, 90 years old are going to see their pensions cut—that’s the ultimate way this will be paid after the taxpayers flee the state,” Fellner said.

While California’s situation isn’t that dire, the possibility exists that some workers won’t get their full pensions. For example, after the tiny mountain town of Loyalton, north of Truckee, pulled out of CalPERS because it couldn’t afford the premiums, its four retired employees found their benefits slashed. They have sued to recover them.

School districts are also affected. Ed-Data is a partnership of the California Department of Education, EdSource, and the Fiscal Crisis and Management Assistance Team/California School Information Services (FCMAT/CSIS) designed to offer educators, policy makers, the legislature, parents, and the public quick access to timely and comprehensive data about K-12 education in California.

This site shows that employee retirement costs for the Redwood City School District went from $4.4 million in 2012-13 to $9.2 million in 2016-17. The figures combine the State Teachers Retirement System and the Public Employees Retirement System figures.

San Mateo County’s pension system appears to be in better shape than most systems.

The county has its own plan, outside CalPERS, called the San Mateo County Employees Retirement Association (SamCERA), with about 5,000 members.

Its highest-paid pensioners in 2017 were retired county counsel Thomas F. Casey, $229,341; retired public works director Neil Cullen, $228,524; retired district attorney James Fox, $228,295; and current District Three Supervisor Don Horsley, who received $228,161 as retired sheriff; according to Transparent California data.

According to a grand jury report, the county in 2013 agreed to start making supplemental contributions to its pension plan. It put a big down payment of $50 million into the fund in 2013-14, when its capital budget was swelled by the profitable sale of the county-owned Circle Star Plaza in San Carlos. A half-cent county sales tax, first approved by voters in 2013 and since extended until 2043, has also helped pay for extra contributions. So far, extra contributions have totaled $139 million, with more planned.

The county also has a less generous formula than other jurisdictions, ranging from 2 percent a year with retirement at 55.5 for members hired before 2011 to 2 percent at age 62 for those hired after 2013. As with the state, newer members also have restrictions on income enhancements used to boost pension payments.

The grand jury report notes “it will take many years before the reduction in benefit formulas will be fully realized in pension payments.” Still, already, about 30 percent of current employees are in the lower-pension tier. The grand jury estimated that an employee in the new tier who retired at age 55 after 30 years’ service will receive a benefit 33 percent lower than one hired under the pre-2011 plan.

The result? SamCERA has a funded ratio of 84.3 percent, considerably better than the state average. The county expects to eliminate its unfunded liability by 2023, saving over $300 million in interest charges that would have occurred otherwise.

The county also makes more conservative assumptions on investment returns, assuming a 6.75 percent return compared to 7.5 percent for CalPERS plans in 2016-17.

And it continues to hold the line in labor negotiations. A new three-year contract with Service Employees International Union Local 521 was expected to raise pension costs only 0.04 percent, despite raises of 3 percent to 4 percent a year. Terms of a tentative settlement reached in February were not available at Climate’s press time.

The grand jury commended county supervisors and the SamCERA board “for their foresight and decisive actions. SamCERA is now rated as one of the top pension plans in the state, based on their conservative assumptions.”


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  #450  
Old 03-08-2019, 08:49 AM
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BRAZIL
MILITARY
https://www.washingtonpost.com/world...=.0d7f5beaebc6
Quote:
Brazil president says military should have benefits reduced

Spoiler:
SAO PAULO — Brazil’s president said Thursday that military personnel should have their benefits reduced as part of a reform of the country’s troubled pension system, a concession aimed at helping a controversial proposal get past near-certain opposition in Congress.

President Jair Bolsonaro made his remarks in a short speech to marine troops in Rio de Janeiro as lawmakers prepare to debate changes which would increase the retirement age to 65 for men and 62 for women.

The prospect for reform is unknown, but securing any modification to the system is a difficult undertaking that requires super majorities in both chambers of Congress.

“I want the armed forces to make a sacrifice and accept the pension reforms,” Bolsonaro told troops. “The new pension system will affect the military.”

He did not provide additional details.

Critics of the pension reform have previously condemned Bolsonaro’s proposals to curtail generous benefits without requiring the military to share in the pain.

As a congressman for 27 years, Bolsonaro often voted against such proposals himself.

But the far-right leader, who said during the election campaign he did not know much about the economy, now says he was wrong to do that and has made pension reform a central pillar of his administration’s agenda in a bid to boost Latin America’s largest economy.

Bolsonaro, a staunch supporter Brazil’s 1964-1985 military dictatorship, said Thursday: “Democracy and freedom only exist when the armed forces want them to.”

The speech to troops was Bolsonaro’s first public event since he sparked outrage by sharing a video on Twitter showing a man urinating on the head of another man during a Carnival party. Bolsonaro said in the tweet he was showing how debase Carnival celebrations had become.

The far-right president was one of the main targets of revelers’ mockery during this week’s Carnival, which is a time when samba schools and organizers of thousands of street parties traditionally take politicians to task.


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