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  #31  
Old 10-17-2016, 09:16 PM
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Originally Posted by StillCrazed View Post
Under the Section 218 rules for CalPERS, I note this language "Certain services and positions can be excluded from Social Security coverage under the Section 218 Agreement, if requested by the state. Exclusions are limited to the services listed as optional exclusions in Section 218 of the Social Security Act. Those optional exclusions include:

Agricultural labor, but only those services that would be excluded if performed for a private employer
Elective positions
Election workers and election officials whose pay in a calendar year is less than the amount mandated by law, unless Section 218 agreement covers election workers
Part-time positions (as defined by the employer in terms of hours per week/month/year)
Positions compensated solely by fees that are subject to Self-Employment Contributions Act (SECA), unless Section 218 Agreement covers these services
Students enrolled and regularly attending classes at the school, college, or university where they are working"
So, is CalPERS required to offer a replacement for SS to those excluded (especially part-timers)?
First, standard internet disclaimer: I am not a lawyer.

I've never encountered a situation with a group that is not covered by Social Security or a public sector pension plan, but as I understand it, that possibility exists for the Section 218 exclusion classes, which as you noted, are operative for CalPERS.

Legally, what this means is that state governments were allowed to define categories of part-time employment not subject to a retirement mandate. I also understand that 218 agreements are said to be irrevocable after 1983. I'm not sure what these two facts mean together. I'm not sure if they are free to add any retirement plan to this employment with no other repercussions, or if they would have to make this a Social Security replacement plan or else the compensation would be subject to newly imposed FICA withholdings.

If it's required to be a Social Security replacement plan, it can't be opt out, and someone has to pay a 7.5% contribution rate (either the employer or the employee or some combination).
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  #32  
Old 11-01-2016, 05:43 PM
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Originally Posted by campbell View Post
This guy, Chuck DeVore, seems to think that these plans are intended to bail out state pensions.

among other things.

http://www.forbes.com/sites/chuckdev.../#20b055145295



Hmmm, didn't know these assets were supposed to be commingled. Most of these things are supposedly DC plans.



Calpers is already the largest pension fund in the U.S. I highly doubt they need more money to increase their clout.

It's a bit overwrought. I think these state-run plans are a bad idea, mainly because the money will be a political football. I have little trust that these DC plans will be well run at all.
This guy is still going on about it:
http://thefederalist.com/2016/10/31/...-savings-bail/

I assume he'll keep on keepin on.
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  #33  
Old 11-02-2016, 01:41 PM
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I suspect that the cross-subsidy DeVore is referencing is that the state systems will leverage the funds by paying a low "safe" rate on these accounts while investing for a higher probable return, so they end up with more funds for other purposes.
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  #34  
Old 11-02-2016, 03:04 PM
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It's not clear to me they're guaranteeing anything at all.
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  #35  
Old 11-28-2016, 06:37 PM
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http://www.bloomberg.com/news/articl...fix-retirement

Quote:
Is It Simpler Than Obamacare? California’s Retirement Mandate
The giant state and four others aim to use employers to revolutionize saving for millions of workers.

The last time millions of Americans were signed up for a new government-mandated benefit program, it didn’t go so well. The initial rollout of the Affordable Care Act, or Obamacare, resulted in broken websites, angry employers, and lots of confused consumers.

Now five states, where one in five Americans lives, are attempting a similar feat, this time with retirement. The goal in California, Oregon, Illinois, Maryland, and Connecticut over the next few years is to give nearly every worker the chance to save for retirement at work.
Currently, 36 percent of U.S. private-sector workers don’t have access to a pension or 401(k)-style plan on the job, according to the Pew Charitable Trusts. Even those who have a plan at work don’t always find it easy to sign up. As a result, 55 percent of workers aren’t saving for retirement at work. Young workers and Latinos are the least likely to have access to workplace retirement options.

The states are trying to get more workers saving for retirement by requiring employers either to offer a plan to workers or to connect them to a portable, state-run retirement option.

“It is an ambitious step that is part of a growing national movement aimed at protecting millions of Americans who are on track to retire into poverty,” California State Controller Betty Yee said in a speech earlier this month.

Almost 7 million people could end up enrolled in the California Secure Choice Retirement Savings Program, the state estimates. All employers with five or more workers would eventually need to comply.

It won’t be easy to set up such a program, Yee and other state officials acknowledge. “Other states will be watching closely,” Yee said, “and we are going to succeed. I’m confident of that.”
.....
It’s no coincidence that all five of the states preparing retirement mandates are heavily Democratic. Business and financial industry groups, which usually support Republicans on such issues, aren’t nearly as enthusiastic about the proposals. The Investment Company Institute, a trade group for fund companies, opposed the California plan, saying it opened up the state to legal and financial risks. The California Chamber of Commerce initially opposed Secure Choice as well.
......
Big questions still face the five state plans. Will fees be sufficient to cover the plans’ costs without using taxpayer money? Will the employer mandate prompt more companies to set up their own retirement plans, rather than link workers to the state system? That might be good for workers, especially if increased competition improves the often-inadequate 401(k) options for small businesses but might rob the state systems of fee-paying participants.

Finally, will workers actually save in the accounts, which are voluntary? Even if they’re able to save, what’s to prevent low- and middle-income workers from raiding their accounts during financial emergencies, compromising their retirements?
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  #36  
Old 03-10-2017, 09:29 AM
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ILLINOIS

https://401kspecialistmag.com/braind...ike-401k-fear/

Quote:
Braindead Dems Strike 401k Fear: Opinion

Think it’s tongue-in-cheek? Think again

Love or hate him, if you need another reason for why Donald Trump was elected, Illinois certainly has it. Call it the Chicago way.

The state’s pension debt hit a whopping $130 billion in 2016, up 17 percent from 2015. While many blame profligate government spending for the Land of Lincoln’s financial ills, the Chicago Tribune specifically points to said pension debt as its cause.

Now, barring a block from the feds, the Illinois Secure Choice Savings Program, a state-mandated IRA, is set for full implementation in June. It follows similar plans from equally frugal stewards of the people’s purse in other locales, most notably California. Apparently the introduction of state-run IRAs and 401ks like these, overseen by the same people, is the answer to our retirement woes.

(Rest assured, the mandatory Illinois plan is “designed to impose minimal burdens on employers.”)

We’re all for a 401k-style retirement system for government workers; anything is better than the outdated and antiquated DB pension system. Heck, we don’t even have an issue with state governments that simply establish a retirement marketplace to promote coverage, like New Jersey. But a mandatory government-run system for private sector workers is another matter.

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  #37  
Old 03-12-2017, 01:54 PM
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CALIFORNIA

http://californiapolicycenter.org/6700-2/

Quote:
Problems With California’s “Secure Choice” Pension Plan
March 5, 2017/by Jon Coupal
Editor’s Note: In this article, author Jon Coupal describes most of the problems with California’s “Secure Choice” pension plan for private sector workers, but he omits a big one: The plan is designed using realistic financial assumptions, i.e., relatively high contribution rates and relatively low rate-of-return assumptions, and a very modest retirement benefit formula. Put another way, “Secure Choice” is everything that government employee pensions are not. Unlike public sector pension funds, the Secure Choice fund will generate perennial surpluses. And where will those surpluses go? Perhaps to bail out the government worker pension funds? Here’s the difference in benefits: (1) Public sector: Teachers/Bureaucrats, 30 years work – pension is 75% of final salary. (2) Public sector: Public Safety, 30 years work – pension is 90% of final salary. (3) Private sector: “Secure Choice,” 30 years work – pension is 27.6% of final salary (learn more). Isn’t that special?

California’s “Secure Choice” program sounds harmless enough: A voluntary program — at least for now — that would enroll private sector employees who currently don’t have a retirement plan into a state-run retirement savings account.

When the initial program was announced in 2012 with authorizing legislation, taxpayers were skeptical. Now that the program is even closer to fruition, there is greater reason to be concerned. The good news, however, is that the U.S. Congress is now threatening to pull the plug on this foolish endeavor.

The first question is why is this program even needed? While many public employees don’t pay into Social Security (most receive generous public retirement benefits instead) workers in the private sector do receive Social Security. One might complain that Social Security benefits are inadequate but, because the program is backed by the federal government (which has the power to print money) the benefits promised are almost certain to be forthcoming. Not only that, under federal law, there are many programs to assist private-sector workers whose employers don’t offer 401(k) or other employer-based plans. These include individual retirement accounts, both traditional and Roth IRAs. For workers without an employer retirement plan, there are generous limits on how much can be saved tax deferred.

Given all the existing retirement programs authorized under federal law and managed by the private investment firms, why on earth would California want to adopt a massive new government program? The short answer is that progressives desperately desire to control every aspect of the economy, leaving no room for the private sector. Never mind that investment firms — of which there are thousands to choose from — offer competitive returns and efficient management of retirement accounts. Progressives truly believe that government can do it better.

But better than what? The California Public Employees’ Retirement System, which is carrying an unfunded liability of close to a trillion dollars, has a history of corruption and gross mismanagement.

Progressives also see Secure Choice as a means to crowd out private firms which attempt to maximize returns for their investors while public-sector retirement funds engage in “social engineering,” investing in speculative industries and firms, many of which require government subsidies to survive. At the same time, these public funds eschew well-performing investments such as in the oil industry. This might explain, in part, why the investment returns of California’s public employee retirement funds badly underperform.

Then there is the cost to taxpayers. While the program is ostensibly voluntary, the startup costs of the program exceed $100 million. Taxpayers didn’t have much of a choice in seeing their dollars spent on this questionable program. We suspect that most Californians would prefer that money to go to projects that are truly public in nature such as highway maintenance and fixing dams. Finally, there is the risk to taxpayers in the event Secure Choice goes bankrupt. Defenders claim that this can’t happen but we recall officials in Stockton, Vallejo and San Bernardino saying the same thing.

The good news is that the days of Secure Choice may be numbered because of the political sea change in Washington. It is important to understand that the program would not even be legal were it not for regulations issued by the Obama administration. State programs such as Secure Choice were never authorized by Congress. Rep. Tim Walberg, R-Mich., chairman of the subcommittee on Health, Employment, Labor and Pensions, sponsored a resolution that most believe nullifies the Obama administration’s regulations. Just last week, that resolution passed on a party line vote meaning that Secure Choice and other similar state programs are now on life support.

California has enough problems to deal with. There is no need for it to get into the private retirement plan business.

Jon Coupal is president of the Howard Jarvis Taxpayers Association.
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  #38  
Old 03-30-2017, 04:53 PM
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https://cv.actuary.org/members/alert...2017-PEB-5.pdf

Quote:
PENSION ISSUES
Alert No. 2017-PEB-5
March 30, 2017
U.S. Senate Passes Joint Resolution to Repeal Rule on
Government-Sponsored Retirement Accounts

The U.S. Senate today passed by a vote of 50-49 a joint resolution, H.J. Res 67, which if enacted would
repeal a U.S. Department of Labor (DOL) final rule that provides municipalities a safe harbor to
facilitate government-sponsored individual retirement accounts (IRAs) for private sector employees who
do not have access to workplace retirement savings programs. The rule was published in the Federal
Register on December 20, 2016. The Congressional Review Act permits Congress to pass disapproval
resolutions to block federal agencies from implementing new rules (within certain time periods).

On Feb. 15, the U.S. House of Representatives passed both H.J. Res 67 and H.J. Res 66, a measure to
repeal a DOL rule applicable to state plans. The U.S. Senate is expected to vote on H.J. Res 66 although
no vote has been scheduled.

The Trump Administration issued a statement in support of both resolutions on March 13.

https://www.congress.gov/115/bills/h...hjres67rds.pdf

Quote:
JOINT RESOLUTION
Disapproving the rule submitted by the Department of Labor
relating to savings arrangements established by qualified
State political subdivisions for non-governmental employees.
https://www.gpo.gov/fdsys/pkg/FR-201...2016-30069.pdf

https://www.whitehouse.gov/the-press...labor-relating

Quote:
H.J. Res. 67 and 66 – Disapproving the rule submitted by the Department of Labor

March 13, 2017
(Senate)

STATEMENT OF ADMINISTRATION POLICY
H.J. RES.66 — DISAPPROVING THE RULE SUBMITTED BY THE DEPARTMENT OF LABOR RELATING TO SAVINGS ARRANGEMENTS ESTABLISHED BY STATES FOR NON GOVERNMENTAL EMPLOYEES
(REP. WALBERG, R-MI, AND SEVEN COSPONSORS)
H.J. RES.67 — DISAPPROVING THE RULE SUBMITTED BY THE DEPARTMENT OF LABOR RELATING TO SAVINGS ARRANGEMENTS ESTABLISHED BY QUALIFIED STATE POLITICAL SUBDIVISIONS FOR NON GOVERNMENTAL EMPLOYEES
(REP. ROONEY, R-FL, AND SEVEN COSPONSORS)


The Administration strongly supports Senate passage of H.J. Res. 66 and H.J. Res. 67. These joint resolutions of disapproval would nullify two rules promulgated by the Employee Benefits Security Administration of the Department of Labor: (1) Savings Arrangements Established by States for Non-Governmental Employees, 81 Fed. Reg. 59464 (Aug. 30, 2016); and (2) Savings Arrangements Established by Qualified State Political Subdivisions for Non-Governmental Employees, 81 Fed. Reg. 92639 (Dec. 20, 2016), respectively. The rules allow a new type of State-based retirement plan that would lack important Federal protections, and they would give a competitive advantage to these public plans. These joint resolutions would prevent the Department of Labor from reissuing a rule that is substantially the same as the disapproved rule absent specific future congressional authorization.

If these bills were presented to the President in their current form, his advisors would recommend that he sign them into law.
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  #39  
Old 03-31-2017, 12:25 PM
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California don't care

https://calmatters.org/articles/reti...-d-c-obstacle/

Quote:
Retirement savings for all? California vows to proceed despite new D.C. obstacle


California’s grand plan to extend retirement security to millions of workers, a cornerstone of the economic agenda put forward by state Democrats, is looking a little bit less secure.

That’s because Republicans in the U.S. Senate voted on Thursday to roll back a little-known Obama administration regulation, putting California’s “Secure Choice Retirement Savings Program” in jeopardy.
…..
“We’re not going to throw in the towel,” Treasurer spokesperson, Marc Lifsher, said before the Thursday vote. “We’re going to press ahead—even if the Senate goes south on us and the whole thing probably ends up with the courts.”

That outcome is looking increasingly likely. Secure Choice has long been in the cross hairs of the financial services industry, which considers it an unwelcome intrusion of government into their business. Reversing the Obama-era rule that provided regulatory cover for the program makes an ultimate legal challenge all the more likely.

As devised by Senate President Pro Tem Kevin de León, California’s Secure Choice program would automatically enroll the approximately 6.8 million eligible workers into individual retirement accounts. Participating employees would see 3 percent of each paycheck placed into a state-wide coffer, which would be overseen by a board chaired by the State Treasurer, but managed by a private investment manager. Eligible workers will have the option to bow out of the program. But by placing all eligible participants into the program by default from the get-go, the program’s designers hope to provide the California workforce with a helpful nudge toward financial prudence.

…..

ERISA (rhymes with “Marissa”) is meant to prevent employers from “using the pension plan as a cookie jar,” explains Bruce Wolk, a professor emeritus at the UC Davis School of Law and an expert on pension law. Thus, the law saddles employers with strict reporting requirements and places them on the legal and financial hook if anything should go wrong with the plan.

To get around ERISA—and the objections of business groups like the Chamber of Commerce—Sen. de León structured Secure Choice to ensure that federal regulators would not consider it an “employer pension benefit plan.” Namely, employers would not be asked to contribute to, accept money from, or endorse Secure Choice plans in anyway. Likewise, employee participation would be “completely voluntary.”

Maybe.

Under the Secure Choice program, eligible workers are automatically enrolled into the system, but given the option to opt out. It’s an idea that harnesses the widely-observed human tendency to go with the flow: Researchers have found that simply switching from a savings program that requires workers to proactively opt in to one where participation is set as the default can double the share of workers socking money away. Still, auto-enrollment is an ERISA red flag.

“What does ‘completely voluntary’ mean? Nobody knows,” says Wolk. “That was one of the reasons that everyone wanted the Department of Labor to issue a ruling.”

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Old 04-10-2017, 12:22 PM
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http://www.ai-cio.com/channel/NEWSMA...-Pension-Rule/

Quote:
NYC Comptroller Decries Senate Vote to Roll Back Pension Rule
Vote reversed Labor Department rule allowing cities to create savings plans.
New York City Comptroller Scott Stringer had some harsh words for US. Senate Republicans who voted to reverse a Department of Labor (DOL) rule that allowed cities and counties to organize retirement savings accounts for workers who have no access to retirement plans.

“Republicans in the Senate just voted to make it harder for Americans to save for retirement,” said Stringer in a statement. “This vote was an active, willful attempt to undermine the economic security of Americans.”

By a vote of 50-49, the Senate voted to overturn the US DOL’s rule “Savings Arrangements Established by State Political Subdivisions for Non-Governmental Employees.” The rule allowed cities to expand access to retirement savings plans to private-sector workers.
......
“Every New Yorker and every American should be able to save for a lifetime,” said Stringer. “But instead of lifting them up, Republicans in the Senate have sold out hardworking families who want to have secure retirements.”

The vote came under the Congressional Review Act of 1996, which established fast-track procedures that allows Congress to disapprove regulatory rules issued by federal agencies. To qualify for expedited consideration, a disapproval resolution must be submitted within 60 days after Congress receives the rule.

The current Congressional Review Act window applies to any significant Obama administration rule that was either finalized or made effective after June 13, 2016. Because the DOL’s city and county plan rule was finalized in December 2016, and became effective in January 2017, both rules fall within the current Congressional Review Act window.

The White House is expected to approve the legislation, and has already expressed its support for it. It said in a statement in March that the Labor Department rules had allowed “a new type of state-based retirement plan that would lack important federal protections.”

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