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  #1151  
Old 08-25-2017, 08:11 AM
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SOUTH CAROLINA

http://www.thestate.com/opinion/lett...167095697.html

Quote:
Why SC teacher pensions matter to all of us

In this year’s legislative session, teachers saw a potential attack on our pensions turn into a reasonable, bipartisan compromise. Lawmakers rejected a plan to switch newly hired teachers to risky defined-contribution plans. Unfortunately, we can expect the same attack next year. This would be wrong for South Carolina.

I have always loved science and wanted to share my passion with children, and I have been a science teacher for eight years in Aiken County and 19 in York County. I’m proud of the years I’ve worked to make sure generations of children are prepared to enter the real world.

When I retire, I know I can rely on my defined-benefit pension. On average, S.C. public employees receive an annual pension benefit of $21,013 — a modest sum that will help support my family and me in retirement.

Teachers and other public retirees contribute greatly to our local economies.

According to the National Institute on Retirement Security, state and local pension-fund benefits in South Carolina support a total of $3.8 billion in economic output in the state and $2.1 billion in value added in the state. Each $1 in taxpayer contributions to South Carolina’s state and local pension plans supports $4.65 in total output in the state.

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Switching newly hired teachers and other public employees to 401-type pensions will directly harm our local economies. The average 401(k) account balance in South Carolina is only $20,630 — clearly not enough to retire with.

The second major problem with switching new hires to a defined-contribution plan is recruitment and retention.

For example, say you are a recently graduated teacher and you have been offered jobs in Georgia and South Carolina. The average teacher salary in Georgia is $52,880 and the average annual pension benefit is $27,583, but here in South Carolina the average pay is $48,375 and the annual pension benefit is $21,013. Which one would you choose?

South Carolina should be doing more to bolster our pensions, not advocating for them to be torn down. Next legislative session, I urge our lawmakers not to switch new hires to defined-contribution plans, but instead to look for ways to make pensions better.

Our local economies and recruitment and retention depend on it.

SHERRY EAST

ROCK HILL

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  #1152  
Old 08-25-2017, 08:12 AM
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TEXAS
POLICE

https://www.ai-cio.com/news/houston-...e-retirements/

Quote:
Houston, Dallas Pension Reforms Spur Police Retirements
Surge in retirements due to changes that reduced benefits for officers.

The cities of Houston and Dallas have seen a surge in police retirements in 2017, a result of recent pension reforms for Texas retirement systems covering both cities’ law enforcement that resulted in reduced benefits for participants.

The Houston Police Department has had 362 officers either retire or trigger the retirement process during the fiscal year that ended June 30, which is the highest annual total for which records are available, according to the Houston Chronicle. Another 52 officers left the department voluntarily without having accumulated the years of service necessary to draw a pension check. That total number of resignations is approximately twice the amount that has been typical over the last decade.

Meanwhile, in Dallas, 72 city police officers will leave by the end of August, said Dallas Police Association President Mike Mata, according to the local CBS television news affiliate.

“We’re losing some of our most experienced detectives,” said Mata. “The investigator you want to come out and solve that homicide, that you need to come out and solve that sexual assault.”

.....
Although the pensions reforms were signed in May, the workforce drain began at the end of 2016 as it became clear that pension reform in 2017 was becoming increasingly inevitable. According to Ray Hunt, president of the Houston Police Officers Union, 124 officers signed up for retirement in December 2016.

“We’re hoping that the additional cadet classes more than keep up with the loss of manpower,” Hunt said in a statement in February. “If each cadet class operates at its maximum capacity, we will more than make up for the retirements, many of which have resulted from pension recalculations.”

Sgt. John Pohlman, who had been the most senior officer among the Houston Police Department with 49 years on the force when he retired in June, said in February that “the pension situation has pushed me over the edge about waiting past July 1” to retire. “When I did the recalculation, I lost $1,200 a month if I don’t leave by the end of June. To be honest, the pension thing didn’t push me over the edge. It made me doggone sure I was going to leave.”


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  #1153  
Old 08-25-2017, 08:13 AM
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CALIFORNIA

http://www.ocregister.com/2017/08/16...ue-to-pile-up/

Quote:
While politicians across California seem content to ignore the problem, both the cost and excesses of public-sector pensions continue to grow.

Last year, nearly 23,000 retired government workers receiving a pension through the California Public Employees’ Retirement System collected pensions of at least $100,000, according to watchdog group Transparent California.

The number of CalPERS pensioners in the $100K club has grown 63 percent since 2012. Topping the list is former Solano County administrator Michael Johnson, who collected a pension of $390,485 in 2016.

Santa Clara County, Oakland, Riverside County, Long Beach and Santa Ana were the top five employers of CalPERS pensioners receiving pensions in excess of $100,000 a year. There were 861 Santa Clara County retirees receiving $100K pensions, 523 from Oakland, 469 from Riverside County, 360 from Long Beach and 270 from Santa Ana.

Such revelations come as CalPERS and other pension systems downgrade their long-term investment assumptions, which have remained unreasonably high — resulting in underfunding by employees and government employers.

Factoring in other public pension systems as well, Transparent California reports that nearly 53,000 government retirees collected pensions of $100,000 or more last year.

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  #1154  
Old 08-25-2017, 08:15 AM
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MARYLAND

http://www.baltimoresun.com/news/mar...815-story.html

Quote:
Halt 'banked' pension checks, lump-sum payouts

Two government personnel disputes are making headlines these days.

One involves area politicians — County Executive Kevin Kamenetz of Pikesville and Councilwoman Vicki Almond of Reisterstown.

The other involves two of Gov. Larry Hogan's officials, Planning Secretary Wendi Peters and Health Secretary Dennis Schrader.

In each case, action is needed to iron out situations that threaten established systems for dealing with personnel matters.

Baltimore County's conundrum involves a 2010 pension reform that allows employees who retire from a county job to be rehired in another position.

Ordinarily, rehiring a former employee is no big deal — except when that employee has already started receiving county pension checks.

To overcome that barrier — and to allow the county to rehire workers with valuable expertise — an exception was added to the pension law that may have made sense at the time but in practice amounts to an unacceptable windfall for those individuals.

The 2010 plan has been repeatedly mischaracterized as "double dipping." That's not true. Rehired county employees are simply gaining additional pension credits in their new county jobs for time worked — the same as any county employee.

As long as the rehired worker doesn't simultaneously receive pension payouts, this shouldn't be a big deal. If you work for the county, even for a second time, you ought to be able to accrue pension benefits for added years of service.


But there's a dangerous kicker: Instead of seeing their pension checks suspended for the duration of their second round of government service, rehired employees get their pension checks "banked." When they retire a second time, they receive a one-time payout.

.....
This is flat-out wrong. While Kamenetz serves as county executive, he should not be receiving a County Council pension check. No "banking" allowed, either. The same holds for 32 other once-retired county employees now working in new jobs for the county.

County workers who retire, then decide to resume their government service in another capacity, must make a decision: Go back to work for the county and give up your pension checks during that period, or stay retired.


Let's do away with "banked" pension checks and lump-sum payouts. That arrangement is, indeed, double-dipping.

Almond's bill in the council gets rid of this objectionable provision. But the council must take care not to totally exclude rehiring of highly skilled county retirees for different government jobs.

There are other ways to address that issue without resorting to pension windfalls.

On the state level, Hogan's cabinet secretaries have sued to collect their paychecks — even though they haven't been confirmed by the state Senate, as required under the constitution.

This dispute rightly belongs in the courts. Both the governor and legislature are staking out important constitutional positions, with the legislature seemingly on firmer ground. It's now up to the state's top judges to sort out that constitutional quagmire.
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Old 08-25-2017, 08:16 AM
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KENTUCKY

http://www.lanereport.com/80387/2017...nsion-reforms/

Quote:
Kentucky Chamber president highlights need for balanced approach to pension reforms

With a special session to address the state’s underfunded pension systems quickly approaching, a panel of groups from different perspectives discussed what could and should be done to address the persistent pension problems the state faces Monday night.

On KET’s Kentucky Tonight program, host Renee Shaw was joined by a panel including Kentucky Chamber President and CEO Dave Adkisson, Kentucky Education Association President Stephanie Winkler, Kentucky Center for Economic Policy Executive Director Jason Bailey, and William Smith, representative for the Bluegrass Institute for Public Policy Solutions to discuss pension reforms.

The Kentucky Education Association (KEA) would like to see more funding placed into the system to ensure that benefits that have been promised to teachers can be paid, Winkler said. Winkler also stated that changes to the system—even ones that could total $30 million—won’t save enough money to fix the system.

Similarly, Bailey maintained his position that his group does not believe the pension system problems are at crisis level and money is what is needed to fix the system rather than making structural changes for future hires. Bailey noted the legislative reforms made in 2013 and said no savings have been seen from those changes. However, when the legislation was implemented, PEW Charitable Trust, who advised the legislature, stated it would take years for the benefits to be seen as the hires were being placed into a new system.

Adkisson noted the differences of opinions among the panel with the KEA and Kentucky Center for Economic Policy representatives saying more money is needed to fix the systems and the Blue Grass Institute stating that the focus needs to be on the structural changes and how benefits are administered.

“Our position is in the middle of that. We feel like it is going to take more money, but there have to be some structural changes,” Adkisson said. “I think almost anybody that has been fairly objective knows that it’s going to take some of both. And trying to find that middle is what’s going to play out in Frankfort over the next six months.”

In terms of what structural changes could be on the table, the panel discussed the items widely considered to be outside of the inviolable contract including paid sick day spiking the final pension payments, retirement age before receiving full benefits, and other items.

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Old 08-25-2017, 12:29 PM
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NEW MEXICO

https://www.ai-cio.com/news/new-mexi...vestment-plan/

Quote:
New Mexico State Investment Council Reveals FY 2018 Investment Plan
Hurdles include high valuations of risk assets, macroeconomic future.


In a document obtained by CIO Thursday, the New Mexico State Investment Council released its annual investment plan for fiscal year 2018—in which it expressed slight optimism for macroeconomic growth as well as a desire to essentially continue the broad investment strategy of the previous few years.

The Council expects the next seven to 10-year period to consist of sluggish economic growth, modest interest rates, and stable inflation rates. It predicts modest improvement in conditions and returns. In addition, the $21.5 billion permanent endowment manager feels that conditions will continue to be “less supportive” than normal for its equity-based investments—the fund’s best returning assets, creating “ample challenges” in generating targeted long-term returns. Additional challenges will be the resolution of high valuations on many of the Council’s largest available investment markets.

In terms of the Council’s broad investment strategy, the fund will focus on reduced exposure to equity risk, investments that return a majority income on their overall rate of return, and structuring downside mitigation into asset class portfolios. To combat the aforementioned challenges, the Council is focusing on protecting capital rather than chasing gains.

To diversify its equity exposure, the fund is expecting its 65%/35% stock and bond combination to produce an average 5.7% return—well below long-term averages and the Council’s 7% return target. To combat this, the Council is considering shifting the portfolio to add a custom combination of core and value-add real estate. It expects a 7.9% annual rate of return over a longer period, with 15.8% annual volatility and 70% of returns coming from income.

The fund’s current custom mix of these assets has an expected 7.7% return rate, with 11.7% volatility. It suggests it could generate 75% or more of the return from income.

When it comes to the downside crisis mitigation, the Council seeks to utilize strategies that tend to favor income-producing investments over capital gains, such as active management—which includes smart beta—in the publicly equity portfolio.

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Old 08-25-2017, 12:29 PM
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CHICAGO, ILLINOIS
MEABF

http://chicagocitywire.com/stories/5...ng-group-warns

Quote:
Chicago pension fund on last legs, accounting group warns

The actuarial valuation of Chicago’s Municipal Employees’ Annuity and Benefit Fund (MEABF) paints a bleak future for the fund, even taking into consideration a proposed water and sewer tax from Mayor Rahm Emanuel, according to a recent report from Truth in Accounting.

According to the valuation, the fund is on track to become insolvent in 2025, with each dollar of promised benefits supported by just 19 cents. The city contributed $150 million to the fund in 2016, when the actuaries set the minimum payment it should have delivered to the fund at $962 million.

Truth in Accounting reported that the valuation shows the city would need to contribute $11.45 for every dollar it pays in salaries to fully fund the pensions for its municipal employees. Put another way, the city would need to lay off all employees covered by the MEABF, then contribute the sum of their salaries into the fund for 11 years to pay out all the benefits that municipal employees have earned under the current system.

Emanuel has proposed a new tax on water and sewer bills that will phase in over four years, eventually bringing in $239 million in revenue by adding 30 percent to those bills, according to the Chicago Tribune. Based on the actuaries’ valuation, Truth in Accounting notes that this figure, even assuming a continuation of 2016’s $150 million contribution, will fall far short of what is needed.

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Old 08-25-2017, 03:00 PM
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ILLINOIS
POLICE

http://www.dailyherald.com/news/2017...m-bill#new_tab

Quote:
Rauner signs police pension reform bill

Illinois police officers will no longer be able to participate in multiple law enforcement pension programs.

Thursday, Gov. Bruce Rauner signed legislation that outlaws a practice he described as "double dipping."

Previously, police officers could work for 30 years, retire at 50, begin receiving pension benefits equal to 75 percent of their final salary, then take a new law enforcement job somewhere else and start building a second pension. Commonly, these retired police officers take leadership posts in another department.

Instead of participating in a new pension program, officers who are collecting benefits from a previous job can enroll in a 401(k)-style retirement program.

"It is completely up to local units of government to determine the structure of the benefit they believe is fair and reasonable," said state Rep. Grant Wehrli, a Naperville Republican who sponsored the bill. "It's a fixed cost and allows units of government to know exactly how much they'll have to pay."

....
However, there are loopholes in the law. The law is intended to cover only new law enforcement work. That means a retired police officer can teach criminal justice at a state university and begin contributing to an Illinois State Universities Retirement System pension, according to Wehrli. An officer could also get elected to the legislature and join that pension system, or get elected as a judge and join that pension program.

Even an IMRF pension is possible if the job a retired officer takes is in a capacity that doesn't include law enforcement, according to IMRF Executive Director Louis Kosiba. That includes leading a police department, but as a civilian employee with no police powers.

http://www.governing.com/topics/mgmt...g.html#new_tab

Quote:
'Double Dipping' Pensions No Longer an Option for Illinois Police

Legislation to prevent law enforcement officers from retiring, collecting a pension and then returning to active police duty to earn a second pension was signed into law Thursday by Gov. Bruce Rauner at the Naperville Municipal Center.

The measure, sponsored by state Rep. Grant Wehrli, R-Naperville, and state Sen. Michael Connelly, R-Lisle, stops the practice known as "double dipping." It was triggered, in part, by Naperville Police Chief Robert Marshall, who retired after 28 years with the Naperville Police Department only to return seven years later as its top administrator.

"This bill stops the process of double dipping," Wehrli said. "Up until this bill was signed, a police office could retire on a Friday, start a new job as a chief of police on a Monday, collect a pension and now start working on a second pension."

Under the new rules, law enforcement retirees returning to active duty positions will have the option of enrolling in a 401(k)-style system instead of accruing a second pension through the police pension fund or the Illinois Municipal Retirement Fund.

The legislation received bi-partisan support from the General Assembly and begins to address Illinois' mounting pension problems, Wehrli said.

"As those liabilities are growing, local units of government are seeing those dollars that should be allocated for other services going to fund pensions," he said.

Rauner, speaking before signing the bill, said the new regulations represent a positive step toward pension reform. Beyond that, allowing law enforcement officials to collect more than one pension is not fair to retirees who are collecting just one, he said.

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Old 08-25-2017, 03:00 PM
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ILLINOIS
TEACHERS

https://www.trsil.org/news-and-event...eeting#new_tab

Quote:
TRS FOLLOWS NEW LAW AND LOWERS THE STATE'S FY2018 CONTRIBUTION BY $531 MILLION
August 23, 2017 – SPRINGFIELD, IL – The Teachers’ Retirement System Board of Trustees this week reduced the State of Illinois’ annual funding contribution to the System for fiscal year 2018 by $530.8 million; reluctantly adhering to a new law that changes the statutory pension funding formula.

The revised state contribution for TRS is now $4.034 billion. The previous FY 2018 contribution, certified by the TRS Board last October, was $4.564 billion.

“The changes enacted this year in the pension funding formula move TRS further away from financial stability and continue to kick the can down the road. Period,” said Dick Ingram, executive director of TRS. “Cutting the state’s contribution only increases our concern that TRS will eventually become insolvent.”

Ingram added that the System’s $71 billion unfunded liability – one of the largest in the country – is a direct result of decades of underfunding by state government. In FY 2018, the state’s contribution will fall $2.839 billion short of what the System’s actuaries say is “full funding” for the year, or $6.873 billion.

“For every dollar that the state cuts from the TRS contribution now, they will have to spend $3 down the road to replace that revenue because of the interest costs,” he said. “A $530 million funding cut today just puts off the inevitable and will create a payment of $1.6 billion in the future.”

A new state law approved in July by the General Assembly changed the pension funding formula in two significant ways that reduce the state’s allocation to the System:

TRS must retroactively “smooth” the fiscal effect of any changes made in the TRS assumed rate of investment return over a period of five years. The “smoothing” applies to any assumption changes from 2012 on.
Local school districts will pay more of the cost of a member’s pension if that member’s salary is equal to or greater than the governor’s statutory salary of $177,412. The district will be responsible for paying the actuarial cost of the benefits earned on the portion of the member’s salary that exceeds $177,412.

The new state contribution does not include any potential cost savings from the creation in July of the Tier III “hybrid” retirement plan because Tier III is still being developed. When Tier III will be implemented will be decided by the Board at a future meeting.

The TRS Board is required each year to certify the state’s annual contribution to the System for the next fiscal year. That contribution is reviewed by the State Actuary before it is included in the state budget for the upcoming year.
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Old 08-28-2017, 07:55 AM
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MISSOURI

http://sbj.net/stories/opinion-teach...-to-some,55133

Quote:
Opinion: Teacher pension system’s generous benefits costly to some


Teachers love their pension system. And why not?

They can retire at age 55 with 30 years of service and draw 75 percent of their final average salary for the rest of their lives. For a teacher who becomes a principal or superintendent, this benefit could easily be six figures annually.

But have you ever stopped to ask yourself how the plan manages to achieve this? There is no magic. The plans do not have wizards for fund managers. The answer is much more straightforward: The system redistributes wealth from some individuals to others.

Logic tells us when people receive benefits that far exceed the value of their contributions and interest, the funds must come from somewhere – and they do. They come from teachers who work for fewer years, from teachers with relatively low pay and from future generations of teachers. The same characteristics of Missouri’s teacher pension system that enable some teachers to enjoy a comfortable retirement also create several forms of inequity that could undermine these plans.

Currently, teachers in Missouri (except in Kansas City and the city of St. Louis) contribute 14.5 percent of their salaries to the pension system. The district matches that amount, for a total equal to 29 percent of the teacher’s salary. A teacher who leaves before the five-year vesting period forfeits the district’s match.

But even vesting doesn’t guarantee a teacher will receive full value for their contributions, let alone the district’s match. Because the benefits accrue slowly at the start of a teacher’s career and then rapidly as they approach retirement, a teacher must work more than 20 years just to recoup their own contributions. The teacher who works 15 years and moves because of a spouse’s job in another state, for example, will be leaving money behind that helps fund the generous benefits of others. This is known as intra-generational inequity – within a cohort of teachers, some benefit and others lose.

Another form of intra-generational inequity is the cross-subsidization that occurs between workers with different earnings trajectories. Some teachers, generally in wealthier districts, get very large raises over the course of their careers, but others do not. Teachers who become administrators make even more money. Since pension payouts are based on salaries earned in just the final three years of employment, these individuals receive retirement benefits that exceed the amount of their own contributions to the system over the course of their careers.
....
This is the third type of inter-generational inequity. As generations of teachers contribute less than they receive in benefits, unfunded liabilities grow. In turn, future generations are asked to contribute more to the system. We already have seen individual contributions to Missouri’s Public School Retirement System grow to 14.5 percent from 10 percent in 1995.

Defenders of the teacher retirement pension will be quick to tell us the system is well-funded, by over 80 percent. We can quibble about this calculation another time. They will reiterate the system is well-liked by teachers and claim that retirees are doing well.
OH DUDE. You were doing so well.
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