Actuarial Outpost
 
Go Back   Actuarial Outpost > Actuarial Discussion Forum > Pension - Social Security
FlashChat Actuarial Discussion Preliminary Exams CAS/SOA Exams Cyberchat Around the World Suggestions

Salary Surveys
Property & Casualty, Life, Health & Pension

Health Actuary Jobs
Insurance & Consulting jobs for Students, Associates & Fellows

Actuarial Recruitment
Visit DW Simpson's website for more info.
www.dwsimpson.com/about

Casualty Jobs
Property & Casualty jobs for Students, Associates & Fellows


Reply
 
Thread Tools Search this Thread Display Modes
  #1751  
Old 12-15-2017, 05:59 AM
campbell's Avatar
campbell campbell is offline
Mary Pat Campbell
SOA AAA
 
Join Date: Nov 2003
Location: NY
Studying for duolingo and coursera
Favorite beer: Murphy's Irish Stout
Posts: 82,048
Blog Entries: 6
Default

CONNECTICUT

http://wtnh.com/2017/12/14/pension-a...in-in-january/

Quote:
Pension and annuity changes to begin in January

Spoiler:
HARTFORD, Conn. (WTNH) — State Representative Arthur O’Neill is reminding taxpayers of pension and annuity changes in the new year.

Following the passage of Public Act 17-147, pension plan administrators or payers of pensions or annuities must now withhold income taxes from disbursements.

Related Content: Ample tax cuts for business, wealthy in new GOP tax accord

Connecticut residents must file form CT-W4P indicating their pension and annuity withholding choices with their plan administrator. Otherwise, the top level of 6.99% will be withheld.

“Many people who receive pensions or annuities rely on that income for day-to-day expenses, and while not a new or increased tax on these payments this change is potentially confusing and could cause some taxpayers to see a fluctuation in their checks or tax liability,” Rep. O’Neill said. “My hope is that these technical changes will not come as a surprise and taxpayers will be able to better anticipate their income or liability beforehand.”

The Department of Revenue Services has updated information available at www.ct.gov/DRS. Questions can be answered over the phone by calling 1-860-297-5962.



http://www.yankeeinstitute.org/2017/...-to-new-study/

Quote:
Connecticut pension system worst in the nation, according to new study

Spoiler:
Connecticut has the most underfunded pension system in the nation, amassing more than $127.7 billion in liabilities, according to an annual study by the American Legislative Exchange Council.

The study entitled Unaccountable and Unaffordable showed Connecticut’s pension system dropping below Illinois and Kentucky when its pension liabilities were calculated with a “risk-free” discount rate equal to the rate of a U.S. Treasury bond.

Connecticut’s unfunded pension liability rose from $99.2 billion in ALEC’s 2016 study to $127.7 billion in 2017, leaving the pension system only 19 percent funded.

The debt from the public pensions amounts to $35,721 per person in Connecticut, the second highest per capita debt in the nation behind Alaska.




Co-author of the study and Connecticut native, Thurston Powers, says “These figures represent a history of pension fund mismanagement and an ongoing unwillingness to pursue meaningful reform.”

Wisconsin had the best-funded pension system at 61.5 percent, but still far below the recommended 80 percent minimum.

Officially, Connecticut claims the pension fund is 47 percent funded, but the study says this figure hides the fact that states use a discount rate much higher than the rate used by private plans, inflating the funding ratio.

Connecticut traditionally used an 8 percent discount rate, but Gov. Dannel Malloy and the State Employee Retirement Commission lowered the rate to 6.99 percent earlier this year.

The change was not reflected in the 2017 ALEC study which relied on the latest valuation from the state, but Powers said it should reflect positively on Connecticut next year. Other studies have also recommended using the rate of a U.S. Treasury bond – slightly more than 2 percent – when calculating pension liabilities.

The change in discount rate was part of a refinancing of the state employee pension debt, which extended payments out to 2046 in an effort to keep the costs from spiking to unmanageable levels.

But the study says this move could potentially cause more tax increases in the future. “Because the fund will have relatively fewer assets generating investment income over the next two decades as a result of this delay, a combination of higher taxes, reduced state services, and pension benefits cuts becomes more likely in future years.”

Even after delaying the payments on pension liabilities, Connecticut’s annual contribution toward the state employee retirement system will grow from $1.5 billion per year to $2.2 billion by 2022.

The state’s payment to the teachers retirement system is expected to grow much more, potentially topping out at over $6 billion by 2032 if the state fails to meet its annual discount rate of 8.5 percent, according to the Center for Retirement Studies at Boston College.

Gov. Malloy made several attempts to alter the funding of the teachers retirement system, including forcing municipalities to cover one-third the cost of the pensions and refinancing the unfunded liabilities, similar to what was done for the state employee system.

Neither plan made it into the final budget.

The authors of the study wrote that both politicians and union leaders have a vested interest in keeping the discount rate high as it hides the true debt and allows the state to contribute less toward the pension system than it actually requires. This leaves more money available for wages and state government expansion.

“While Connecticut is the worst, this is a ubiquitous problem,” Powers said. “The pension crisis is largely created by a set of poor incentives inherent to defined benefit plans. Politicians, union representatives, and fund managers all share a perverse incentive in underestimating the pension liability.”

But the years of underfunding those pension plans is catching up with Connecticut and neither lawmakers nor taxpayers can hide from the costs much longer.

Connecticut’s pensions are part of the state’s “fixed costs” of pensions, retiree healthcare and debt service, which now comprise over 50 percent of the state budget, crowding out other state services or forcing tax increases to continue funding those services.

Connecticut has already endured two large tax increases in 2011 and 2015 but, according to Office of Policy and Management Secretary Benjamin Barnes, the increased revenue from those tax increases has not been enough to keep up with the rising pension costs.

Tax revenue has also been stagnant and, in some cases, falling below state projections, leaving large deficits which lawmakers then scramble to fix with either service cuts or more tax increases.

Although lawmakers can change teacher pensions through legislative action, state employee pensions are set through collective bargaining. The SEBAC benefits contract, first signed in 1997, was extended until 2027 through a union concessions deal Malloy made with union leaders earlier this year.

This means that lawmakers have little recourse in reforming the state employee pension system until the contract expires in ten years.

Connecticut is one of only four states in the nation to set retirement benefits through collective bargaining rather than in statute.

The study did point out some states which have made reforms to their pensions systems. Pennsylvania and Michigan have both created new defined contribution or hybrid plans for new employees or teachers.

Although Connecticut ranked as one of the worst states for its unfunded pension liabilities, every state had underfunded their pensions and used overly optimistic discount rates. The total liability for all 280 state-administered pension plans included in the study exceeds $6 trillion.

“The most effective way to prevent Connecticut’s pension crisis from deepening,” Powers said, “is to remove the states ability to underestimate its liabilities by switching new hires to a defined contribution plan, as Pennsylvania has for hires 2019 and later.”


__________________
It's STUMP

LinkedIn Profile
Reply With Quote
  #1752  
Old 12-15-2017, 06:00 AM
campbell's Avatar
campbell campbell is offline
Mary Pat Campbell
SOA AAA
 
Join Date: Nov 2003
Location: NY
Studying for duolingo and coursera
Favorite beer: Murphy's Irish Stout
Posts: 82,048
Blog Entries: 6
Default

KENTUCKY

https://www.courier-journal.com/stor...get/897262001/

Quote:
Pension reform, taxes and the budget: Matt Bevin reaches his defining moment as governor

Spoiler:
FRANKFORT, Ky. — Drowned out amid the uproar over pension reform and stunning allegations of sexual harassment in the legislature this fall has been a public policy message that will have a far greater impact on the lives of Kentuckians:

The next state budget has a $1 billion hole to fill, and if there is no new revenue, massive cuts to programs are coming when the legislature convenes to tackle the problem.

John Chilton, Gov. Matt Bevin's budget director, told the state pension oversight board on Aug. 28 and again on Nov. 2, “To be fiscally responsible, we need to free up an additional $1 billion per year."

Chilton was describing the likely hole in the budget if lawmakers fully fund pension reform and meet other needs such as replenishing a depleted state "Rainy Day" fund. It's a hole that he said can be filled only by a combination of spending cuts, revenue increases and reducing the cost of pensions.


How the state deals with this intertwined mix of legislation — the long-simmering pension crisis, the 2018-20 state budget, and possibly tax reform — stands as the defining moment of the administration of Matt Bevin.

It will also be the first time in Kentucky history that a state budget will be crafted by a Republican governor, a Republican House and a Republican Senate.

More: Gov. Matt Bevin says he might not call special session on pension reform

More: Kentucky gave $15M to a manufacturer. Now, one of its investors is raising money for Bevin

House Speaker Pro Tem David Osborne, who has been leading the House GOP since Jeff Hoover stepped down as speaker over a sexual harassment scandal, said he could not dispute the estimate of a $1 billion budget problem. “I think the cuts are going to be significant. At this point I think that’s all the specificity I can give,” said Osborne, a Prospect Republican.

Rep. Jim Wayne, a Louisville Democrat, said that without new revenue, the budget outlook “is the bleakest it’s ever been in my 27 years in Frankfort. It’s really a disaster in terms of investing in our state and our people.”

The bleak outlook means there will be no new money to fight the opioid crisis or hire more social workers to deal with burgeoning numbers of abused and neglected children coming into the state’s care.

Universities are sure to take another big whack. Even the core funding program for public schools — a priority spared from earlier rounds of cuts — might well be cut this time.

Small agencies and programs considered nonessential could be abolished. State workers, who haven’t gotten raises in six of the last eight years, will get none for the next two. In fact, the tight budget raises the prospect of layoffs.

Bevin has ruled out alternative ways to raise revenue such as legalizing casinos or recreational marijuana. And pushing anything that could be called a tax increase through Republican-dominated legislative chambers would be the tallest of orders.


http://www.sentinel-echo.com/kentuck...4dfeaaea9.html

Quote:
KEA hosts pension forum with state representatives

Spoiler:
CORBIN — The Kentucky Education Association hosted the Tri-County Pension Forum Tuesday evening, the final pension forum of the year, at the Corbin Center where lawmakers answered questions from a series of community members representing teachers, state workers and retirees regarding Gov. Matt Bevin's proposed pension reform plan.

These community members had the opportunity to ask Republican State Representatives Regina Huff, Jim Stewart III and Tim Couch, who all attended the forum, along with KEA President Stephanie Winkler, any questions they had regarding the pension reform plan.

"As an administrator, as a superintendent, the school districts are being asked to do more and more and more with less and less revenue — it just continues," said Williamsburg Independent Superintendent Amon Couch. "We're producing results in our school systems but let me give you an example, all of these pension systems have different needs, they should not be treated the same. Please, dear God, whatever plan that we have, don't put the burden of revenue production on the school districts that don't have enough money as it is."

Although the three state representatives didn't all agree on how the state would produce this revenue, they all agreed that tax reform needed to happen before making any changes to the current pension system.

"My thoughts are we do need the revenue before we can work on the pension," said Stewart. "The pension went from about 55 percent funded to about 56 or 57 and it's going up. It's going the right way, we just need to continue to put the funding to it and it will recover on its own."

The biggest question on everyone's mind was whether or not Bevin would call a special session this year, as previously said.

"We have no intentions of passing the 505-page document that was his (Bevin's) proposal," said Huff.

"Basically we don't need a special session if you do not have an agreement on some type of proposal," said Couch. "Right now, the proposal is, I guess it's up in the air. As far as a special session, I can't see it because we're at the end of the year, we're ready to go into our legislative session, our budget session."

All three state representatives in attendance agreed that it was highly unlikely that a special session would be called this year.

Huff, who is also a special education teacher in the Whitley County School district, said she's had the "unique opportunity" to work in both the House of Representatives and as a teacher, which she said has given her a "totally different perspective."

"You will not have a bigger cheerleader, I assure you, on this subject than myself. I take it personally," said Huff. "We should be ashamed of where we are today, as far as what we are paying the hard working people of the Commonwealth."

Winkler, who said this was the 47th pension forum she has attended, praised the three state representatives in attendance, along with the work the KEA has done since Bevin first began discussing a possible pension reform plan.

"I think that is the reason why we are in such a position right now that we weren't shoved a 505-page bill down our throats," said Winkler. "Because of the good advocacy and the work we've done to try and educate folks and bring legislators to people and bring people to legislators and try to work to make sure that we stop things that are going to be devastating to our, not just our public schools but our communities."


__________________
It's STUMP

LinkedIn Profile
Reply With Quote
  #1753  
Old 12-15-2017, 06:01 AM
campbell's Avatar
campbell campbell is offline
Mary Pat Campbell
SOA AAA
 
Join Date: Nov 2003
Location: NY
Studying for duolingo and coursera
Favorite beer: Murphy's Irish Stout
Posts: 82,048
Blog Entries: 6
Default

SAN LUIS OBISPO, CALIFORNIA

http://www.sanluisobispo.com/news/lo...189669044.html

Quote:
SLO faces millions in pension-related cuts. Here’s how it will attack the crisis

Spoiler:
The city of San Luis Obispo has a major financial crisis looming — a projected budget gap of $8.9 million annually over the next few years due to rising pensions costs — but the city now has a framework in place for how to attack it.

The City Council expressed its support for a fiscal health plan presented Tuesday by city staff that would use a balanced approach to slashing costs and generating new revenues.

The proposal seeks to make up for about $7.5 million in the city’s general fund under the following formula: a 30 to 40 percent operating reduction including new ways of doing business, 20 to 30 percent increase in employee contributions to help meet budgetary goals, and 30 to 40 percent in new revenue sources.

“I am in alignment with the recommendations,” said Councilwoman Andy Pease. “I think the distribution is an appropriate target.”

Never miss a local story.
Sign up today for unlimited digital access to our website, apps, the digital newspaper and more.

SUBSCRIBE NOW
I AM IN ALIGNMENT WITH THE RECOMMENDATIONS. I THINK THE DISTRIBUTION IS AN APPROPRIATE TARGET.

Councilwoman Andy Pease

An additional $1.4 million would come specifically from the city divisions that handle sewer, water, parking and transit, through cost-cutting strategies and employee negotiations on wages, hours and working conditions. Rate increases on customers aren’t being considered to address the pension problem.

Without a balanced financial strategy, the cuts could mean 68 employee layoffs or an 18 percent decrease in employee compensation, options the city believes would severely impact morale and the city’s ability to attract and retain employees.

San Luis Obispo’s outstanding unfunded pension liability is $148 million. That’s the difference between the estimated cost to pay retirement obligations and the market value of the city’s assets currently set aside to fund them.


California's public pension crisis is bad and getting worse
California's two major public pension systems are underfunded and are asking local governments to pay more. Critics want to reduce benefits, while others say policymakers should allow time for recent changes to take hold.

Emily Zentner The Sacramento Bee
A variety of factors have contributed to the pension problem, including losses from the Great Recession, more conservative investment assumptions and increasing city costs to cover pension payments.

New revenue sources the city proposes include marijuana taxation that projects revenues increasing by $500,000 next year up to $3 million annually by 2020-21.

City Council members suggested other ways that the city might generate new funding, such as installing new solar panels on city properties to save on electricity costs and partnering with other cities on emergency and safety response.
__________________
It's STUMP

LinkedIn Profile
Reply With Quote
  #1754  
Old 12-15-2017, 09:24 AM
campbell's Avatar
campbell campbell is offline
Mary Pat Campbell
SOA AAA
 
Join Date: Nov 2003
Location: NY
Studying for duolingo and coursera
Favorite beer: Murphy's Irish Stout
Posts: 82,048
Blog Entries: 6
Default

ILLINOIS

http://www.chicagotribune.com/suburb...y.html#new_tab

Quote:
Mundelein approves property tax hike to cover pension payments
Spoiler:
Mundelein trustees voted Monday night to raise the property tax levy by nearly $630,000 to cover increased payments to police and fire pensions, but the decision didn’t arrive without debate.

The approved levy of nearly $13.2 million keeps all village operations at the same funding level and only raises the portion for police and fire pensions, according to village documents.

FROM OUR PARTNERS:
Inside the 35th Anniversary of Nike's Air Force 1 | Esquire
Pause
Unmute
Current Time 1:35
/
Duration Time 3:03
Loaded: 0%Progress: 0%
Fullscreen
Mundelein maintained an $11.8 million levy for five straight years until raising it to $12.5 million last December. Officials stressed that they maintained the same rate as the year before, $1.57 for every $100 of assessed value.

Village Trustee Ray Semple, who chairs the finance committee, led Monday’s discussion and voting. He said the $630,000 in new payments was met with approximately $350,000 in lost sales tax and income tax revenue garnished by the state as part of Illinois’ new budget.

“Before we even started the process of working on the levy, we were already sitting in a hole of $1 million that we had to make up or figure out how to handle,” Semple said. “The pension contribution, every year it’s becoming more and more of a surprise.”

Police pensions levied more than $1.4 million this year but would pull in slightly more than $1.8 million next year, the levy ordinance shows. Fire department pensions levied $618,000 this year and would collect more than $786,000 next year.

Semple said trustees during a planning meeting in October decided to increase pension payments and then make around $350,000 in cuts when budget workshops take place in April.

No residents commented during the public hearing, but Village Trustee Dawn Abernathy lobbied for alternatives to raising property taxes. She was the only official to vote against the proposed levy.

“When is enough enough?” Abernathy said. “Just because the state is telling us we have to 90 percent fund our pensions, when they decide to fund their pensions plans at 90 percent I think we should start worrying about it. Their pensions are in the hole and I think our pensions are pretty well funded.”

The law Abernathy referenced says municipalities need to achieve at least 90 percent funding by 2040.

Mayor Steve Lentz, who also voted in favor of the increase, said Mundelein’s portion of a person’s property tax bill is only 13 percent, and pointed to school districts, Lake County, Fremont Township and Libertyville Township as the other 87 percent.

“The suggestion that we don’t fund our pensions to the level that the state is requesting for us to do to have funding compliance, I don’t think there’s a strong argument for that, to say it nicely,” Lentz said.

Abernathy repeated her belief that alternatives could be found.

“I’m not saying that we’re not going to fund it to the level they’re requesting, I’m saying that’s a poor excuse to say ‘oh we have to do it,’” Abernathy said. “Well, we don’t have to it that much. Ninety percent?”

At some points in the discussion, Lentz said Mundelein’s residential growth requires more government services but also said new homes brought new tax revenue that helped keep Mundelein’s levy frozen for several years and he hoped to keep growing.

In response, Abernathy said she doesn’t believe police or fire staffing has increased for new services.

Semple said prospective new hires look at Mundelein’s entry level pay, scheduling, and pension situation. He said he doesn’t want Mundelein to be a town where first responders leave after getting trained and earning a year or two of experience.

“We can pat ourselves on the back and underfund it this year and parade around town and brag about how we didn’t raise the tax levy, but all we’re doing to is passing the buck to a future mayor and a future village board,” Semple said.

Village Trustee Kerston Russell, who in 2015 voted to keep taxes flat, supported the hike during Monday’s discussion. He said sales tax is one way residents can contribute toward keeping their property taxes lower, but many take those dollars to Cook County and neighboring communities.

“It doesn’t make any sense that we have businesses and consumers in this town taking their sales tax dollars and leaving town, and then complaining about the cost of running this village,” he said.

Although property tax levies have to be submitted to the state by the end of December, Mundelein's fiscal year starts on May 1. Budget hearings will be held in April to review all forms of revenue and spending.



Quote:
US markets up 200 percent, Illinois pensions down 65 percent – Wirepoints Original

Spoiler:
Wirepoints recently reported that the shortfall in Illinois’ five state-run pension funds failed to improve the past year despite the nation’s booming stock markets.

The government released a report showing the state’s unfunded pension liability barely dropped to $129.1 billion from $129.8 billion in 2016. That was despite above-market returns from the pension funds.

But the bigger story is how Illinois’ pension funds have collapsed – putting both state workers and taxpayers at risk – during one of the longest bull markets in history.

Since the end of the Great Recession, the S&P 500 index has recovered and grown by more than 200 percent, including reinvested dividends, to reach record highs.

At the same time, Illinois’ pension shortfall worsened by 65 percent, to reach $129.1 billion. In 2009, it was $78 billion.



Some of the growth in debt was due to the pension funds changing their actuarial assumptions, including a drop in assumed rates of return in 2016. Regardless, the systems’ overall downward trend is clear.

And the warning this trend provides is even more stark: if the state’s pension debts continue to worsen during a period of remarkable market returns, imagine how those funds will collapse when the next recession inevitably hits.

Not only will state workers’ retirement security be put at greater risk, but taxpayers will be forced to pour billions of extra dollars into the pension funds when they can least afford it. And those most dependent on government services will only experience further pain.

Taxpayers do their share

Not only have stock market returns been favorable for a recovery of Illinois pensions, but so have taxpayer contributions.

Illinois taxpayers have paid almost $24 billion more into the pension funds than Governor Edgar’s original 1994 funding ramp called for. In 2017 alone, taxpayers will contribute nearly $4 billion more than Edgar’s plan required.



In fact, taxpayer contributions have gotten so large they now consume more than 25 percent of the general fund budget of the state. Virtually every core government service in Illinois has been cut to make way for larger pension costs.



Which makes the thought of next year’s election season sobering.

The likelihood of a budget – let alone the passage of comprehensive pension reform – is very dim.

That means Illinois’ pension crisis is only going to get worse. And that’s bad news for every Illinoisan.
__________________
It's STUMP

LinkedIn Profile
Reply With Quote
  #1755  
Old 12-15-2017, 12:27 PM
campbell's Avatar
campbell campbell is offline
Mary Pat Campbell
SOA AAA
 
Join Date: Nov 2003
Location: NY
Studying for duolingo and coursera
Favorite beer: Murphy's Irish Stout
Posts: 82,048
Blog Entries: 6
Default

COLORADO

http://www.chieftain.com/opinion/edi...7a78e0ed8.html

Quote:
PERA pension peril
Spoiler:
State treasurer Walker Stapleton is on the right track, prodding the Colorado Public Employees' Retirement Association to restore the state and local government pension fund to financial soundness.

Stapleton plans to run for governor next year and we don't know if his proposed PERA fix -- freezing pension benefits and cost-of-living increases -- is the best approach. It does have the merit of forcing the PERA board of trustees to coming to grips with the problem, which is serious. PERA's projected revenues fall $32 billion short of meeting the pension benefits due to 566,000 current and retired members over the next 30 years.

Usually at odds with Stapleton, the PERA board of trustees grudgingly recommended a two-year freeze in cost-of-living increases and a modest reduction in benefits for the time being.


Trouble is, temporary fixes aren't enough.

PERA needs to bring revenues closer to pension liabilities. Stapleton recommends 80 percent funding for the pension currently funded at only 58 percent.

PERA pension benefits far exceed Social Security and most private employer retirement plans (few small businesses offer any). The others cannot compete with PERA, which bases monthly benefits on the average of the 36 highest-paid months that members put in their entire working years. Nor do private plans typically offer the annual cost-of-living increases that PERA and other government pensions do.

Stapleton is absolutely correct that PERA inflates its future earnings from investments by forecasting a 7.25 percent annual return. This allows for more generous benefit payments. He wants PERA to scale back the estimated return to a more realistic 5.5 percent or even less.

Colorado taxpayers have a direct stake in PERA fiscal operations. Their taxes go into the public employee pensions.


Whereas most Americans pay 6.2 percent in mandatory payroll taxes to Social Security, almost no PERA members do. Private sector employers match the 6.2 percent worker contribution for a combined 12.4 percent of payroll to Social Security.

Yet all taxpayers foot the bill for PERA employer contributions, such as 20.15 percent for state and school pensions while the employees pay 8 percent. And remember, PERA employers are the state and local governments and participating school districts that collect the taxes that go into the pension fund.

Most PERA beneficiaries can retire at 50 with 30 years of service, or 60 with at least 20 years or 65 with fewer years paying into pension. More recent hires have to wait until age 55 or 58 with 30 years in. PERA members with less than a year in by now must wait until 60.

The state treasurer is often criticized for taking the PERA board on when, in fact, something akin to his plan is essential to the long-term financial integrity of Colorado's largest public retirement plan.

In the end, Stapleton supports the taxpayers' best interest whether they benefit from PERA or not.


__________________
It's STUMP

LinkedIn Profile
Reply With Quote
  #1756  
Old 12-15-2017, 01:30 PM
campbell's Avatar
campbell campbell is offline
Mary Pat Campbell
SOA AAA
 
Join Date: Nov 2003
Location: NY
Studying for duolingo and coursera
Favorite beer: Murphy's Irish Stout
Posts: 82,048
Blog Entries: 6
Default

http://www.governing.com/week-in-fin...sion-fees.html

Quote:
The Week in Public Finance: Tax Reform Games, a Mad Rush to Issue Muni Bonds and Pension Fees

Spoiler:
Finicky Investment Fees
It’s been tricky for pension funds to figure out exactly how much they’re paying Wall Street managers to oversee their investments in hedge funds and private equity. Two events this week show a pension fund’s response to those figures can be even trickier.

The board of the Pennsylvania Public School Employees' Retirement System approved a plan to reduce investment fees paid to external managers, among other cost-saving initiatives. The vote came just months after the Pennsylvania State Employees’ Retirement System voted to do the same. Both boards were urged to cut investment costs in a letter earlier this year from State Treasurer Joe Torsella and Gov. Tom Wolf. In September, a report found that the state employees' fund alone had paid $858 million in management fees since 2012, a figure Torsella described as "outrageous."

Meanwhile, Nashville has learned that its public employees' fund has spent 40 percent more in fees than it had disclosed previously. The new $39 million figure represents 1.3 percent of its assets in fiscal 2017 and includes previously undisclosed costs for private equity funds and other alternative investments. Despite the fact that the fee costs were far higher than the average pension fund, the Nashville Tennessean reports that fund officials were largely dismissive of the number.

The Takeaway: Digging into the true cost of alternative investments often results in dramatic figures like Nashville’s. A Pew Charitable Trusts report earlier this year on the topic estimates that $4 billion in investment fees go unreported each year.

The different reactions between Pennsylvania and Nashville is likely to do with funding and other pressures. Nashville’s public employee’s fund is robust, with more than 95 percent of the assets it needs to meet its future liabilities. The city has a growing and healthy economy. Pennsylvania’s two state pension plans, on the other hand, are about 60 percent funded and the state has faced chronic cash shortages and budget shortfalls.
__________________
It's STUMP

LinkedIn Profile
Reply With Quote
  #1757  
Old 12-15-2017, 03:06 PM
campbell's Avatar
campbell campbell is offline
Mary Pat Campbell
SOA AAA
 
Join Date: Nov 2003
Location: NY
Studying for duolingo and coursera
Favorite beer: Murphy's Irish Stout
Posts: 82,048
Blog Entries: 6
Default

CALIFORNIA

INVESTMENTS
https://californiapolicycenter.org/c...nia-taxpayers/

Quote:
CalPERS’ social investing comes at steep cost paid for by California taxpayers
Spoiler:
The California Public Employees’ Retirement System, the nation’s largest state pension fund, claims that making investments based on myriad social priorities is good for business, even though a newly released report found that such investments are some of its poorest stock performers and are increasing the public’s risk in the vastly underfunded system.

CalPERS invests its own money in social-oriented ventures and pressures other investors to do so, as well. In fact, a CalPERS spokesman called it “laughable” that anyone suggest that fund stop having a “say in how the companies we invest in are run.” It’s more laughable that CalPERS thinks that Californians ought not to have a say in how it manages the $345 billion in assets that originated from taxpayers, who pay the compensation packages for the government employees whose pensions CalPERS provides.

Taxpayers also are, ultimately, financially responsible for any funding shortfalls from CalPERS’ investment strategy. The system is awash in “unfunded liabilities.” That term refers to the accumulating debt that’s being amassed to pay for the pension promises. As a senior obligation, pension debts must be paid out of the public till first – before public funds are used to pay for bond debt, or any other important financial obligations.

In other words, if CalPERS invests poorly, then California taxpayers must foot the bill. Their taxes will go up; their level of services will collapse. Such consequences already are taking place, especially at the local level as cities struggle to pay higher fees to make up for previous poor decisions by the pension fund. Perhaps it’s time for taxpayers to have more of a say in how CalPERS and the California State Teachers’ Retirement System are run.

The new report, by the American Council for Capital Formation, found that the fund’s “environmental-related investments comprised four of its nine worst performing private equity funds last year, accounting for more than $600 million in committed capital.” It noted that “none of the system’s leaders put their own money into environmental investments.”

Last year, CalPERS announced its “Environmental, Social, and Governance (ESG) Five Year Strategic Plan,” which is a blueprint for the agency’s so-called socially responsible investment strategy. As CalPERS explains on its website, “The plan identifies six strategic initiatives that will direct staff’s work. The initiatives are data and corporate reporting standards; UN PRI Montreal Pledge company engagement; diversity and inclusion; manager expectations; sustainable investment research; and private equity fee and profit sharing transparency.”

CalPERS has stepped up such social investments even though its returns over the past decade – even after stellar performance last year – averaged only 4.4 percent. The fund has assumed a rate of return of 7.5 percent, which it recently lowered to 7 percent. The higher the assumed rate, the lower the taxpayer-backed unfunded liabilities. The unfunded liabilities also are caused by benefit increases, including a 1999 CalPERS-backed proposal that sparked a wave of retroactive pension hikes.

ACCF argues that CalPERS has not only received lower returns than it should have received because of these politically correct priorities, but its board “appears to use its size and beneficiaries’ money to wage action on companies not aligned with its political views, and spends time and resources influencing other large institutions … to fall in line alongside it.”

It’s the latest evidence of CalPERS’ recklessness, which is the result of having taxpayers to rely upon. The fund has a fiduciary responsibility to maximize investment returns on behalf of the retirees whose money it controls – and on behalf of state taxpayers. Yet this isn’t the first time its politically oriented investment strategy has raised questions about returns.

As Reuters reported last December, “CalPERS staff had recommended that the board remove its 16-year ban on tobacco investments in light of an increasing demand to improve investment returns and pay benefits. But the board voted to remain divested and to expand the ban to externally managed portfolios and affiliated funds.” An independent report estimated that exclusion of tobacco cost the fund $3 billion over 13 years.

There were similar reports regarding CalPERS’ divestment from coal-related stocks. “Coal stocks are on the rebound, but California’s main public pension fund won’t see investment gains from that industry,” the Sacramento Bee reported last August. In that case, the state Legislature was the prime culprit, as it passed a law calling for the divestment.

But the law mandated that CalPERS do so “consistent with its fiduciary responsibilities,” which means the pension fund had plenty of wiggle room had it been more interested in higher returns than social issues. Even some union officials complained at a public meeting about this policy, which suggests that things really may have gone too far.

Don’t expect the push for social investing to relent. The Bee noted that the ACCF report “comes at the end of a year in which CalPERS repeatedly faced calls from environmental advocates and left-leaning politicians to more aggressively confront climate change, make a stand on gun violence or take activist stands against Trump administration policies.” Some included divesting from the Dakota Access Pipeline or companies that work on the proposed border wall.

Yet, as ACCF noted, these are tough arguments to make when one considers that CalPERS’ had a $2.9 billion surplus in 2007 and now has an estimated deficit of more than $138 billion. CalPERS is funded at only 68 percent and California cities are becoming increasingly vocal about their fees – and what that means for the provision of public services.

Few policies are more emblematic than the fund’s ongoing program to promote “diversity” on corporate boards. Last summer, CalPERS sent letters to 504 companies represented on the Russell 3000 Index calling for them to develop and disclose a board diversity policy. “Simply put, board diversity is good for business,” said a CalPERS official on the fund’s website. “It is essential in today’s global economy that boards avoid ‘group think’ and ensure there is the breadth of experience, skills and knowledge necessary to meet complex business needs.”

Yet few organizations are mired in groupthink more than CalPERS. Its board currently is comprised of two government employees, one retired government employee, one former government employee, two former union presidents, one union vice president, one board member from a government-run utility and two union-backed Democratic elected officials. One member was a member of the Principles for Responsible Investment, “a United Nations-supported organization that promotes active ownership and responsible investment throughout the investment ecosystem.”

The board make up is by statutory design, but this is still one of the least diverse boards imaginable despite the election this week of a board member who is a CalPERS critic. If a diverse board is good for private business, it would be good for a public pension fund, as well.

As long as the pension fund is run by public employees and retirees for the benefit of public employees and retirees and backed by the state’s taxpayer, nothing much will change. Wouldn’t we all enjoy making investments based on our political and social interests rather than on the hard reality of return rates? But few of us have other people’s money to depend on if they don’t pan out as well as we’d like.

Steven Greenhut is a contributing editor to the California Policy Center. He is the Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.


CAMARILLO
https://www.thecamarilloacorn.com/ar...d-pension-gap/

Quote:
Camarillo considers investment plan to help fund pension gap
Spoiler:
The looming pension crisis has California cities looking for ways to cover the retirement benefits of millions of public employees— now and in the future.


How do public agencies take care of the basics—water services, parks upkeep and street repairs—when so much money is being spent on former workers? The costs are multiplied across hundreds of other agencies, including school districts and police and fire departments.

As people live longer, the amount of money required to pay retirement benefits grows. By 2019, the state will be faced with an estimated $11 billion in unfunded pension costs, according to a recent report in the Los Angeles Times.

Those pension benefits are protected under the state constitution.

Camarillo is different in its pursuit to cover the promised payouts to its employees at City Hall.

As of now, the city is faced with nearly $ 32 million in unfunded liabilities that aren’t covered by the shrinking rate of return promised by the California Public Employees’ Retirement System, better known as CalPERS.

This leaves Camarillo looking for ways to make up the funding gap before the city is forced to start making cuts in other areas of the budget.

Genie Rocha, Camarillo’s director of finance, said the city’s pension program with CalPERS is just short of 70 percent funded, even though the city will pay $3.7 million this year to cover pension costs.

She said it would take an additional $31.8 million to pay the pensions of all former and current employees.

The city created a $5-million pension liability reserve in this year’s budget as a way for the city to help fill that deficit, the finance director said.

But those half measures aren’t enough to make up for what is expected to be an ever-growing amount of unfunded liabilities.

Case in point, CalPERS will lower its expected rate of return from 7.5 to 7 percent.

That’s why representatives from Public Agency Retirement Services, a Newport Beachbased nonprofit, are pitching public agencies across the state to invest tax money into the stock market through a trust as a way to generate money.

The idea, according to Mitch Barker, executive vice president of PARS, is to use that revenue to cover the CalPERS’ shortfall. Barker was on hand last month to ask the Camarillo City Council to consider the investment opportunity.

He was joined by Salvatore Milazzo, vice president and senior portfolio manager of High- Mark Capital Management, the San Francisco-based firm that handles Public Agency Retirement Services’ investments.

“You can’t just keep the money in your general fund, earning 1 percent, and expect to get ahead,” Barker said.

The council seemed receptive to the idea.

Councilmember Tony Trembley said investing in a program like the one offered by PARS would allow the city to create a rainy-day fund to cover pension costs.

“I think it’s a smart and a financially prudent move to consider it,” he said.

There’s been widespread criticism aimed at CalPERS because of the financial difficulties the pension deals have created for the state.

David Grau, who serves on the board of directors for the Ventura County Taxpayer Association, said it’s an escalating problem that could have dire consequences in the future.

Grau said until there’s a sweeping change in legislation that puts an end to the pension crisis, investing public funds in the stock market is the best short-term solution available.

“The only way they’re going to get out of this thing is to kick more money into the pension system itself, to put more money into the stock market,” he said.

“There’s no such thing as a free lunch, so they’re going to have to take money out of the general fund, and so far, they’re loath to do that.”

But the strategy only works if the stock market continues to climb. That’s an uncertainly that can keep many city managers up at night with thoughts of cuts to other services that would come in the event of an economic downturn.

“It’s going to be a combination of increased sales tax and reduced services,” Grau said. “You’re going to run into a situation where pension costs will crowd out other costs.

“Pensions are a legal liability. You have to do it. There’s no legal liability to fix a road.”


SAN LUIS OBISPO

http://www.ksby.com/story/37071979/c...ion-budget-gap

Quote:
City of San Luis Obispo works to close projected $8.9 million budget gap
Spoiler:
The City of San Luis Obispo is working to close its multimillion dollar budget gap.

The San Luis Obispo City Council on Tuesday directed staff to take a balanced approach to address the city's projected $8.9 million budget gap.

The gap is from increased pension costs mandated by the California Public Employees' Retirement System.

The balanced approach includes operating reductions and new ways of doing business, new revenues, and employee concessions, while minimizing impacts on the community.

The recommendations total $7.5 million from the General Fund and $1.4 million from the City's Enterprise Funds, including water, waste water, transit and parking.

The plan includes a three-pronged approach:

1. 30-40% through operating reductions and new ways of doing business

2. 20-30% through employee concessions


In keeping with the City Council's adopted compensation and financial responsibility philosophies and labor relations objectives that include cost sharing of employee benefits such as health insurance and retirement, the recommendation assumes approximately $1.7 million will be achieved through employee concessions.

3. 30-40% through new revenue sources

Two areas that would generate additional revenue would be:

a. Cannabis taxation: $500,000 growing to $3 million annually by 2020-21

b. Storm water parcel tax: $1.5 million
Would require two-thirds voter approval with the first revenue collection realized in fiscal year 2020-21.

To manage future fiscal uncertainty, another key component of the staff recommendations is for the city to establish a Section 115 Pension Trust Fund.

Following Tuesday's meeting, city staff will work through details of the Fiscal Health Response Plan, including additional community and staff engagement, and present a final plan to council for adoption in April 2018.

The FHRP will be applied to the city's 2018-19 Supplemental Budget, to be adopted in June 2018.


__________________
It's STUMP

LinkedIn Profile
Reply With Quote
  #1758  
Old 12-15-2017, 03:40 PM
campbell's Avatar
campbell campbell is offline
Mary Pat Campbell
SOA AAA
 
Join Date: Nov 2003
Location: NY
Studying for duolingo and coursera
Favorite beer: Murphy's Irish Stout
Posts: 82,048
Blog Entries: 6
Default

http://observer.com/2017/12/senate-p...r-politicians/

Quote:
Senate Panel Quickly Passes Pension-Padding Bill for Politicians
Spoiler:
A state Senate panel quickly advanced a bill that would give some elected officials bigger pensions, plowing through a vote on Thursday in roughly one minute and without any debate or public testimony.

The bill (S3620) would allow certain elected officials, such as outgoing Camden Mayor Dana Redd, to re-enroll in the Public Employees’ Retirement System (PERS) even if they were removed due to switching from one elected office to another.


Effectively, the bill creates a special exemption that allows Redd to cash in on a bigger public pension at a time when public workers who are not politically connected have seen cutbacks to their benefits and a freeze in yearly cost-of-living adjustments for retirees since 2011.

The legislation — first reported by Observer — is moving quickly in part because Senate President Steve Sweeney (D-Gloucester), a Redd ally, has given it special status, allowing it to move forward without a customary review by a public body that scrutinizes the cost of pension and health benefits legislation and makes recommendations to lawmakers.

The bill could be approved by the Assembly and Senate and signed by Gov. Chris Christie — another Redd ally — during the waning days of the lame-duck Legislature. A full vote in the Assembly and Senate could be held on the bill before the legislative session ends on Jan. 9.


The legislation was introduced this week and cleared the Senate Budget and Appropriations Committee on Thursday by a 9-2 vote with one abstention. The Assembly Appropriations Committee will hear the bill on Monday, according to a spokesman for Assembly Speaker Vincent Prieto (D-Hudson).

That the bill was referred to the Appropriations Committee is of note, since that panel is chaired by a South Jersey Democrat and Sweeney ally, Assemblyman John Burzichelli (D-Gloucester). Prieto could have referred the bill instead to the Budget Committee, which is led by a North Jersey Democrat, Assemblyman Gary Schaer (D-Passaic).

A similar version of the bill that was introduced and then yanked in 2014 would have benefited Redd and Assemblyman Ralph Caputo (D-Essex), a Prieto ally.


Typically, any bill that establishes or modifies pension benefits for public employees is first reviewed by the Pension and Health Benefits Review Commission, a panel established in 1991 that is made up of administration officials and union representatives.

Sen. Sam Thompson (R-Middlesex) told lawmakers after the Senate budget committee approved the bill that several measures up for a vote Thursday that would modify benefits did not get vetted by the Pension and Health Benefits Review Commission.

Sen. Paul Sarlo (D-Bergen), the chairman of the budget committee, then called for a brief recess, and a few minutes later, emerged from a back room and said Sweeney had signed letters waiving the commission’s right to review several bills, including S3620.


Sarlo said after the meeting that he did not have a copy of Sweeney’s letter for S3620. Thompson was given and showed reporters copies of similar letters Sweeney wrote for other bills.

On Thursday evening, after the committee vote, a spokesman for Sweeney provided a copy of the letter for S3620. It notified the Pension and Health Benefits Review Commission that senators would vote on the Dana Redd pension bill “as soon as practicable” because it was an “urgent matter.”

The Senate sponsor of the bill is Sen. Sandra Cunningham (D-Hudson), who sits on the Senate budget committee but was not present for the vote on her bill. She left a yes vote.

At issue is a 2007 law that put new elected officials in a retirement plan, similar to a 401(k), called the “Defined Contribution Retirement Program.” That plan offers less generous benefits than PERS, one of the state’s largest and least financially sound pension funds.

Elected officials already enrolled in PERS before July 1, 2007, however, were allowed to keep building up their heftier PERS pensions as long as they remained in the same elected office, with an exception for lawmakers who jumped between the Assembly and Senate.

Redd, a Democrat allied with Christie and South Jersey power broker George Norcross, became Camden’s mayor in 2010. She had to resign the simultaneous offices she held in the city council and state Senate when she became mayor, and the PERS pension she had been accruing was frozen.

The new Senate bill would allow Redd and others who served in elected office on July 1, 2007 — but later jumped to another elected office — to re-enroll in the PERS fund, so long as they have served at least 15 years with no break in time between holding different offices. Those elected officials also would be able to make their pension enrollment retroactive to the date of taking any previous elected office.

Sweeney said lawmakers in 2007 never intended to block officials such as Redd from being able to collect their pensions. Sweeney was not a sponsor of the 2007 law.

“When we changed the rules for people not getting in the pension system, it was for newly elected officials,” Sweeney said Thursday. “The people that we’re talking about were in the system and they just moved to a different office. That’s not what the intent ever was for the bill.”

The 2007 law, however, specifically says the exception for officeholders who wished to remain enrolled in PERS after July 1, 2007, only applied as long as “that person continues to hold that elective public office without a break in service.”

Sweeney and Sarlo could not say who would benefit from the bill. “Our guys have some [names] we can give you,” Sweeney told reporters after the bill passed the committee. A spokesman for the Senate Democrats did not provide those names upon request Thursday.

But an amendment to the bill would ensure that Redd benefited from the legislation. The amendment, read aloud during the committee hearing, says qualifying elected officials would be eligible to re-enroll in PERS “on the effective date of the bill if the person’s term of office expires within 30 days before the effective date.” Redd’s term expires in January, and the full Assembly is not scheduled to meet again until Jan. 4. The Senate’s next scheduled voting session is on Monday.

Sarlo said the bill would benefit fewer than five people. A Democratic legislative source who spoke on the condition of anonymity told Observer on Wednesday that “several people were taken out of the PERS system” as a result of the 2007 pension overhaul, but the source only named Redd specifically.

Sen. Kristin Corrado (R-Passaic), who voted against the bill in the budget committee, said, “I believe it was aimed at a select few getting that benefit, and we shouldn’t be doing that.”

Sen. Jennifer Beck (R-Monmouth) was the other no vote.

New Jersey’s pension system is one of the worst-funded in the nation, with nearly $90 billion in unfunded liabilities, according to a report released this month by a Christie-appointed commission.

“This doesn’t hurt the pension system,” Sweeney said. “It’s a small number of people. It’s a $90 billion deficit. We’re adding money. We’re going to fully fund the pension like [Governor-elect] Phil Murphy said. So it’s not hurting the pension.”

But Hetty Rosenstein, the state director of the Communications Workers of America union, said the legislation was ill-advised. The CWA opposed the bill in Thursday’s committee hearing but did not submit testimony.

“Adding unfunded liabilities to the pension at this time is grossly irresponsible and should not be done,” Rosenstein said.

Christie is one of Redd’s closest allies. The governor and the mayor have been in a close partnership for years on charter schools, police issues and economic development in Camden.

Christie spent years blasting “greedy” public workers who complained of cuts to their pension benefits. Lately, he has been warning of the dire shape of the pension system, urging Murphy to adopt new reforms.

Christie could veto the pension bill. “As we always say, we don’t discuss pending or proposed legislation until a final bill is delivered and we have had ample time to fully review it,” Brian Murray, a spokesman for the governor, wrote in an email. (Christie and his office sometimes comment on pending legislation.)

Redd’s office did not respond to requests for comment Thursday.

In 2014, a similar bill that would have boosted Redd’s pension was introduced by Assemblyman Craig Coughlin (D-Middlesex). But Coughlin, who is now set to become speaker in January, pulled the bill and took his name off of it when it sparked controversy.
__________________
It's STUMP

LinkedIn Profile
Reply With Quote
  #1759  
Old 12-18-2017, 04:43 PM
campbell's Avatar
campbell campbell is offline
Mary Pat Campbell
SOA AAA
 
Join Date: Nov 2003
Location: NY
Studying for duolingo and coursera
Favorite beer: Murphy's Irish Stout
Posts: 82,048
Blog Entries: 6
Default

FLORIDA
PALM BEACH

http://www.palmbeachdailynews.com/ne...bl3bl2Uh7dBgK/

Quote:
Palm Beach tackles $100 million pension shortfall
Spoiler:
A Town Council workshop Monday, called to take the pulse of the town’s retirement system, focused heavily on the disappointing performance of market investments that helped dig it into a $100 million hole.
An exodus of employees from the mature system — meaning there are considerably more retirees than current employees to support the system — is another reason cited for the long-term shortfall in the town’s ability to meet its obligations to retirees. People also are living longer.

+ Maggie Zeidman photo
Maggie Zeidman
“It’s a living thing,” Councilwoman Margaret Zeidman said of the town’s retirement system. “There are so many variables and they’re moving targets.”

The town is gradually lowering the amount it plans to earn from its investments — what the town calls its “assumption on investment returns” — from 8 percent a few years ago to 7 percent in 2021. Each tenth of a percent lower requires a town contribution of $3.5 million to keep the system from slipping further behind.

Actual returns have been 6.5 percent over the past 30 years and 4.3 percent over the past 16 years.

Last year, the council invested $2.5 million, above its annual legal obligations to the fund, to help roll back the shortfall. For the year that began Oct. 1, it put in an extra $5.4 million and set a policy to continue the “extraordinary contributions” each year until the plan is healthy.

“The stock market is volatile,” Councilwoman Julie Araskog said. “If we have another recession, what happens to the $5.4 million we are putting in?”

Dan Stanton, chairman of the Retirement System Board of Trustees, said there is no “silver bullet” to protect town investments. The market is a gamble and it’s only a question of when, not if, the next recession is coming.

But the mix of investments has been changed for the better since 2015 when the retirement fund lost a staggering $24 million.

Assets at the time were heavily invested in natural resources and were geared to benefit from higher inflation, which didn’t happen, Stanton said. Oil dropped from $100 to $30 a barrel, hammering a portfolio that, in retrospect, wasn’t diversified enough.

“When things started going down, they went down with a vengeance,” Stanton said. “It was because the allocation was set up for [conditions] that didn’t exist.”

The town has a new investment manager and has a new, more diverse portfolio, Stanton said. Plus, the market is up, and this year the fund earned 11 percent. But “I don’t think we should bank on that going forward,” Stanton said.

The town’s fiduciary duty to taxpayers requires a conservative investment portfolio, Stanton said. “You’re dealing with a plan that’s got to stand the test of time for very many years,” he said.

Peter Strong, the plan actuary and a senior consultant with Gabriel Roeder Smith and Co., said its 120 clients average a 7.35 percent assumption on investment returns. The firm is encouraging all clients to lower that number to about 7 percent.

“Over a 30-year period, I think 7 percent is reasonable,” Strong said. “But for the next 10 to 15 years, the forecasts are coming in lower than that.”

If the market were to average 7 percent throughout the next 30 years — the period on which its long-term calculations are based — it could be fully funded even without the $5.4 million extra payments, Strong said.

In that scenario, “You should be fully funded in 28 years,” Strong said.

But given the market performance over the past 15 years, no one is counting on that rose to bloom.

Mayor Gail Coniglio said the town must continue to be proactive while keeping its eye on the big picture. “It’s taken us a long time to get here,” she said. “It’s going to take a long time to get us out.”

+ Gerry Goldsmith photo
Gerry Goldsmith
Strong said the annual $5.4 million extra payments are a good move. “You never know what the next 10 or 15 years will bring,” he said. “This kind of gets you ahead of the curve.”

The nine-member retirement board meets quarterly and consists of five citizens, the town manager, and representatives for police, firefighters and general employees.

“We have a very good board now that understands the problems,” longtime member Gerry Goldsmith said. “Finally, we are being more realistic on the investment return.”
__________________
It's STUMP

LinkedIn Profile
Reply With Quote
  #1760  
Old 12-18-2017, 04:46 PM
campbell's Avatar
campbell campbell is offline
Mary Pat Campbell
SOA AAA
 
Join Date: Nov 2003
Location: NY
Studying for duolingo and coursera
Favorite beer: Murphy's Irish Stout
Posts: 82,048
Blog Entries: 6
Default

CRIMINAL OFFICIALS

http://www.providencejournal.com/new...nsion-benefits

Quote:
After 20 years of court battles, Frank Corrente found entitled to pension benefits

Spoiler:
PROVIDENCE, R.I. — Frank E. Corrente, a former city employee convicted in the “Operation Plunder Dome” case, is entitled to pension benefits from his first time working in City Hall, the state’s Supreme Court found.

In a ruling issued Friday afternoon Chief Justice Paul Suttell affirming three Corrente-related decisions from the state’s Superior Court.

Corrente will now be able to collect his monthly pension of $1,852.61 based on his first City Hall salary.

The decision closes the book on more than 20 years of pricey court battles. Since the city became involved in the case in 2008 it spent $233,610 in legal fees, according to a summary of costs obtained by The Providence Journal through a Access to Public Records Act request.

Corrente, 88, worked as Mayor Vincent “Buddy” Cianci Jr.’s director of administration in the 1990s. He stayed in that job for almost 10 years and when he retired in 1999, he received a monthly pension benefit of $5,881.30 based on a gross salary of $91,656.58, according to court documents.

In 2002, he was convicted on racketeering and corruption charges that muddled his right to that money. A jury found that Corrente, recently featured in the hit podcast “Crimetown,” took payoffs while working for Cianci from a business man working undercover for the FBI.

But before joining Cianci’s City Hall team, Corrente worked as a financial specialist in the controller’s office starting in June 1967. He was promoted to the city controller position in 1981, and retired in April 1987. At that time he was awarded a monthly pension of $1,852.61 based on a gross salary of $42,098.45.

Justices ruled on three issues Friday:

— They denied an appeal from Corrente who wanted, at minimum, a tax credit for the money he already paid to the government for the pension that was revoked. Corrente is being represented by John B. Harwood, former speaker of the Rhode Island House of Representatives.

— In the same vein, justices upheld a decision by the Retirement Board, represented by Raymond A. Marcaccio, who argued that Corrente should not receive the credit because there is no evidence that any taxes were taken from his pension payments from 1999 to 2002.

— The justices denied a cross appeal from Mayor Jorge Elorza and the city, represented by John D. Plummer. Plummer argued Corrente was not entitled to either pension and had requested a new Superior Court trial.


https://www.usnews.com/news/best-sta...-state-pension

Quote:
Nurse Charged With Abusing Patients Files for State Pension
A nurse accused of abusing a patient at Connecticut's only maximum-security psychiatric hospital has filed for retirement benefits.
Spoiler:
HARTFORD, Conn. (AP) — A nurse accused of abusing a patient at Connecticut's only maximum-security psychiatric hospital has filed for retirement benefits.

Mark Cusson is one of 10 workers at the Whiting psychiatric hospital in Middletown who have been charged with the abuse of patient William Shehadi, including kicking him and throwing food at him.

The Hartford Courant reports a lawyer for 49-year-old Cusson says his client is allowed to receive a state pension, even if he is eventually convicted.

Cusson was the hospital's head nurse and qualifies for retirement because of his 21 years of service. He was paid a salary of $173,000 last year.

The state can challenge a pension based on felony-level financial crimes, such as bribery, theft, fraud or embezzlement. Other crimes are not covered, even if they occurred on the job.

http://journalstar.com/news/state-an...4dcce7d37.html

Quote:
You can commit a crime and still collect a public pension in many states
Spoiler:
Former Nebraska State Patrol Maj. Billy Hobbs, convicted of sexually assaulting a child, has been receiving at least $1,800 a month in pension benefits during the 11 years he’s been in a state prison.

His ex-wife also continued to collect more than $1,800 each month from his pension following Hobbs' conviction, part of their divorce, according to court records.

That's because Nebraska law allows public employees to collect pensions even if they are convicted of serious crimes.

In fact, the Nebraska Supreme Court in 2014 declared a state law unconstitutional that would have required Hobbs to use his retirement benefits to pay $325,000 in court-ordered restitution to his victim.

The pension question has resurfaced this year in the case of a former Lincoln police officer who is charged with first-degree sexual assault of a person mentally or physically incapable of resisting.

Gregory Cody, who retired several weeks before he was charged with sexual assault in November, is receiving $1,965 a month in city pension benefits.

In addition to the sexual assault charge, he is accused of using his position of authority to coerce a mentally ill woman into a sexual relationship that lasted more than a year.

And Lancaster County Treasurer Andy Stebbing would face no loss of retirement funds if he is convicted of any of the five felony counts he faces, most related to selling used cars and trucks. He has publicly denied those charges.

Stebbing, like most city and county employees, including sheriff's deputies, has a defined contribution plan, where the employer and employee each contribute. That money is invested to be used by the person when they retire.

City police, like state troopers, teachers and judges, have a defined benefit pension, with monthly pension amounts guaranteed for life based on the person's salary at retirement.

Every state treats public pensions differently, based on research done by the National Association of State Retirement Administrators.

Some, like California, remove retirement benefits only from elected officials who are convicted of certain crimes. But most state laws apply to anyone who is part of a public retirement system.

Many states, like Maryland and Illinois, tie forfeiture of pension benefits only to crimes relating to the duties of the employee.

A few states, including Minnesota and Delaware, have slayer provisions, which preclude a person from receiving a pension as the beneficiary of someone they killed, such as a spouse or other family member.

And in some states, public employees convicted of serious crimes can continue to collect on the portion of their pension they funded themselves, but not the employer-funded share.

Pause
Current Time 0:00
/
Duration Time 0:00
Stream TypeLIVE
Loaded: 0%Progress: 0%0:00
Fullscreen
00:00
Mute
Eight states, including Nebraska, plus the District of Columbia, have no law allowing government to reduce or end a public pension.

Although many people are incensed when government employees continue to collect pension payments after being convicted of serious crimes, there are arguments on both sides of this issue.

A person's opinion often depends on whether they consider a pension a perk or part of the employee's compensation, said Keith Brainard, research director of the National Association of State Retirement Administrators.

Some believe a pension is a perk which is funded largely by public money or taxpayer dollars. If those public servants violate the trust of their positions, critics say it is reasonable to expect to have their pension confiscated.

But there are others who view the pension as a form of deferred compensation — another way of paying employees for doing their jobs. The argument here is that it is wrong and potentially unconstitutional to take away that compensation.

The argument is that you don’t go looking for back pay if someone is found guilty of a crime, so why should a pension benefit be treated any differently, Brainard said.

In recent years more states have allowed pensions to be forfeited for specific crimes, said Brainard, whose organization monitors these issues nationally.

Nebraska state senators have been unsuccessful in trying to change the state's pension law.

Former state Sen. Colby Coash was frustrated by the Supreme Court’s decision to declare the garnishment law he sponsored unconstitutional.

"This was a very broken, very injured young woman, who won in a civil case. The judge said, 'yes, she should get some money,' but she couldn’t collect from his pension," said Coash.

He said public employee unions fought his garnishment legislation because they believe those pensions shouldn't be touched.

“It was terribly disappointing. It was the right thing to do, to take that money and make this victim whole,” he said.

The law allowed garnishment of retirement funds for certain felonies, namely felony assault, sexual assault, kidnapping, child abuse, false imprisonment and theft by embezzlement. But the state Supreme Court said it arbitrarily benefited certain public employees because it didn’t apply to all retirement plans or to those who committed similar crimes.

No other senator has tried to change Nebraska's pension policy in recent years, according to legislative staff.
NASRA table on how states terminate/garnish pensions:
https://bloximages.newyork1.vip.town...6c505f.pdf.pdf
__________________
It's STUMP

LinkedIn Profile

Last edited by campbell; 12-18-2017 at 04:55 PM..
Reply With Quote
Reply

Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off


All times are GMT -4. The time now is 08:30 AM.


Powered by vBulletin®
Copyright ©2000 - 2018, Jelsoft Enterprises Ltd.
*PLEASE NOTE: Posts are not checked for accuracy, and do not
represent the views of the Actuarial Outpost or its sponsors.
Page generated in 0.72708 seconds with 9 queries