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  #1251  
Old 09-12-2017, 07:12 AM
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KENTUCKY

http://wkuherald.com/news/wku-prepar...71dbadd43.html

Quote:
WKU prepares for potential changes to pension system

In the midst of a state-wide pension crisis, WKU is looking at how potential changes to the pension system may affect employees, according to university administrators.

In an email sent to all faculty and staff, President Timothy Caboni said "we must recognize that some change is likely inevitable, and it is better for us to engage proactively in a conversation with policy-makers as they wrestle with these very complex issues rather than waiting for them to make their decisions."

"To that end, representatives from the six public universities and the KCTCS system whose employees are impacted by changes to the pension systems have been working on a set of principles that we agree are in the best interests of our institutions and our employees," Caboni said. "The collective position advocates for no change for current employees."

According to the email, this may mean that all new hires will be using a "403(b) type defined contribution plan, which is consistent with what many public universities ... currently offer."

.....
Caboni also wrote about the Kentucky Employees Retirement System and Kentucky Teachers' Retirement System, saying "the current situation ... is unsustainable." Caboni said because of rising percentages universities contribute to retirement programs, other areas on campus, including "tuition revenue and state appropriations," are going toward contributions to pension.

"Without substantive reform, we soon may find ourselves in the untenable position of cutting campus budgets to cover our pension obligations," Caboni said. "Further, we should not balance the state pension systems on the backs of parents and students who already already are shouldering the majority of the burden of their public higher education costs."

Caboni concluded his email by saying recommendations from the state pension consultant are only recommendations and may not actually be implemented, and said the pension conversation will be ongoing at WKU.


http://www.glasgowdailytimes.com/new...69cf13735.html

Quote:
Riley talks pensions with teachers

GLASGOW — About 250 teachers and retired teachers showed up at the Barren County High School auditorium Monday evening looking for answers about their retirement security.

They got a few — but not all they wanted from Rep. Steve Riley, R-Glasgow, a former teacher, coach and administrator at the school because Riley, like the teachers, is still waiting to see the plan.

“The governor’s office, the House and Senate leadership are all meeting trying to come up with a proposal,” Riley said. “Now, what that is, I don’t know yet.”

Riley was responding to concerns by teachers over recommendations by a consultant hired to review Kentucky’s badly underfunded public pension systems. Combined, the multiple systems face anywhere between $37 billion and $60 billion in unfunded liabilities.

The PFM Group called for significant changes to the retirement systems in Kentucky which are among the worst funded in the country, including a “claw back” of cost-of-living adjustments granted over the years and raising the retirement age to 65.

Those haven’t been well received by state employees and especially by teachers.

Gov. Matt Bevin has said he’ll call a special session this fall to enact changes. Originally, Bevin wanted lawmakers to also enact tax reform in the special session, but he’s backed off that, heeding lawmakers concerns that it’s asking too much to do both in one special session.

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Old 09-12-2017, 12:07 PM
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KENTUCKY

https://www.city-journal.org/html/bl...ues-15436.html

Quote:
Bluegrass Blues
Kentucky’s pension troubles indicate where much of the country is headed.
Steven Malanga
September 8, 2017 Economy, finance, and budgets

States like Illinois and New Jersey and cities like Chicago and Detroit have attracted national headlines for their pension problems, but for absolute distress, no place has greater trouble with its retirement system than oft-ignored Kentucky. The Bluegrass State’s pension plan has lower funding levels than any other state plan, and one of its major pension funds is just four years from insolvency. The state already devotes about 13 percent of its revenues to pensions—about double what other states spend—and it’s not nearly enough to fix the problem. What should be most troubling to people outside of Kentucky, however, is that what got it into this mess is only a more severe version of the problems afflicting many local-government pensions, whose funding levels have failed to recover even after a nine-year bull market. Where Kentucky stands right now, in other words, is where many other pension systems are heading.
According to Kentucky pension-system reports, the state owes at least $43 billion that it hasn’t funded in its pension system, though a state study, using more conservative estimates, suggests that the system could be as much as $64 billion in the hole—not counting $6 billion in unfunded retiree health-care costs. Since 2008, state contributions to the pension system have more than doubled, to $1.5 billion annually from $624 million, but it hasn’t been enough. Local governments face a 50 percent jump in pension costs next year. To fund the system adequately, the state would have to cut other spending by more than 15 percent, or raise taxes sharply. But Governor Matt Bevin rules that out: “I do not intend to raise taxes to pay for the sins of the past.”
Those sins are many. The conventional narrative is that government pension systems have gotten into trouble because politicians didn’t fund them sufficiently, but that’s only a small part of the story. According to PFM Consulting Group, about 15 percent of Kentucky’s debt can be traced to under-financing its annual required pension contributions. The far bigger problem is that Kentucky’s pension system, like those in other states, has employed dubious accounting standards that underestimated problems in the system. “Sadly, it seems past assumptions were often manipulated by the prior pension boards in order to minimize the ‘cost’ of pensions to the state budget,” Bevin and two legislative leaders wrote in a recent op-ed. “The result was to provide a false sense of security.”
Kentucky’s retirement system, for instance, used a technique known as “backloading,” which pushes off into the future payments that would reduce a system’s debt. That method sustained for years the illusion that the system was still affordable, even as its costs were mounting. Kentucky also used assumptions—such as how long its retirees would live—that proved wrong, with costs winding up higher than projected. Like many government systems, the state has also failed to meet its investment projections because they turned out to be too optimistic, and it enacted cost-of-living adjustments without properly accounting for them. Finally, the state designed costly benefits out of line even with other those offered to government workers in neighboring states—including allowing workers to retire early with full benefits. The average age at which Kentucky teachers retire, for instance, is 55, or about five years below the national average.

Still, Kentucky workers argue that their pensions are small and that they couldn’t possibly bear reductions to them. The state’s retired teachers receive on average a pension of just $36,244, according to press reports. But that number is misleading, because it includes everyone garnering payments, including those who worked only a few years and now receive partial pensions. By contrast, Kentucky teachers who retire with full benefits—and who generate the most costs in any system—do quite well. According to the pension plan’s most recent annual report, teachers retiring during fiscal 2016 with 30 years of service earned an average pension of $64,668, or 80 percent of their final average salary, while those who left with 25 years of service received $47,220, or 65 percent of final salary. By contrast, median annual household income in Kentucky is $43,470.

Facing this crisis, the state is considering recommendations made by its consultant, PFM Group, to end cost-of-living adjustments, raise the retirement age to 65, and enroll new hires in a 401(k) style plan instead of a defined-benefit pension. Employees object to any changes for current workers, arguing that their pension plans cannot be altered because of legislation that declares that retirement benefits for government workers “constitute an inviolable contract” in Kentucky. To them, this means that workers have the right to keep earning benefits for an entire career at the rate in effect when the state first hired them. By contrast, in federal court cases, judges with jurisdiction over private-sector pensions have consistently ruled that while a pension contract protects benefits that a worker has already earned, it doesn’t prohibit an employer from changing the terms of a pension plan for work that an employee hasn’t performed yet. How Kentucky courts resolve this issue may very well determine whether the state has a chance to fix its pension problems without steep tax increases or devastating cuts in government services. Though the state can’t make its current pension debt go away, it could save substantially by reforming benefits and then applying the savings to paying off its pension debt. One Kentucky labor leader has promised that if the state attempts such reform, workers “will storm the Capitol with torches and pitchforks.”
Whether taxpayers promise to do the same, if they get stuck with the state’s huge retirement bill, will probably determine Kentucky’s fiscal future.
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  #1253  
Old 09-12-2017, 01:35 PM
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KENTUCKY

http://www.kentucky.com/news/politic...172601831.html

Quote:
‘Irresponsible and defamatory.’ Ex-pension chief responds to Bevin’s ‘jail’ comment.

The former executive director of the Kentucky Retirement Systems, who Gov. Matt Bevin said “should be in jail,” defended himself Monday, blaming the massive state pension shortfall on governors and legislators who failed for decades to provide the retirement system with enough money.

“The governor’s statements are completely without foundation, totally irresponsible and defamatory,” said Bill Thielen, who led Kentucky Retirement Systens from 2011 to 2016.

In August, Bevin told a conference of local government leaders in Louisville that Thielen should be jailed over the current status of Kentucky’s public pension systems, which face tens of billions of dollars in unfunded liabilities.

“The former head of KRS, the director who oversaw this, is a guy named Bill Thielen,” Bevin said. “Bill Thielen should be in jail, and that’s a fact. And I don’t know who’s here from the media, but if this was a private company, if this was a private pension plan, he would be.”

Bevin never publicly explained what crimes he thought Thielen committed. The governor’s office didn’t respond that day to requests for more information about Bevin’s accusations.

In a lengthy statement Monday, Thielen said Kentucky’s elected leaders failed for 15 of 22 years, from 1992 to 2014, to pay the full “ARC,” or annual required contribution, that was deemed necessary every year to keep the state pension fund solvent. During the same period, state employees made their full contributions to KRS through paycheck deductions.

Thielen said this inadequate funding was aggravated by two economic recessions, in 2001 and 2008, that shrank the pension fund’s investment returns, and by cost-of-living adjustments that the General Assembly awarded to retirees without providing the money to pay for them.

By last year, the primary state pension fund had less than 14 percent of what it’s expected to need to meet future obligations to state retirees.

As executive director, Thielen said, he had no control over state leaders’ decisions to inadequately finance KRS. Nor did he control the agency’s investments, he said. The KRS board of trustees decides where to invest the pension money, based on the advice of KRS’ chief investment officer, he said.

“I have experienced an unblemished legal and administrative career of over 40 years serving federal, state and local governments,” Thielen said in his statement.

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  #1254  
Old 09-12-2017, 02:22 PM
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CHICAGO, ILLINOIS
TEACHERS

http://www.daily-journal.com/opinion...4.html#new_tab

Quote:
Chicago teacher pensions should be part of state plan

During the long-running school funding debate, there was much banter about Chicago getting $250 million for its teacher pensions.

The people from Chicago saw it as fair play. The state already kicks in for all other school pensions. Why shouldn't it pay for Chicago? Downstaters saw it as a big payoff for years of mismanagement.

In the end, it turns out Chicago didn't get the $250 million. They got $430 million. Moreover, the promise is that they will get continuing pension payments every year. No matter how you look at this agreement, the precedent has been set. More state funds will be flowing their way. A state that can't find a rational way to pay for its pension obligations has just taken on a whole big, new burden.

It's like the Titanic sending lifeboats to the Lusitania, saying "I can get that."

It might surprise you to learn the Teachers Retirement System for Illinois (TRS) does not include Chicago. Does that make any sense to you?

The pension system for Chicago teachers began in 1895. The state pension system for downstate teachers did not start until 1939. There were folks drawing pensions in Chicago when some downstate had nothing similar in place.

If you read the annual reports of these two institutions, you will find a surprise or two. Both are available online. The Chicago system claims that it is 51.8 percent funded. The state system is 39.8 percent funded. Maybe Chicago should send a payment to Springfield. In truth, neither of these numbers should make you feel proud.

Now, if Chicago gets the same share of funds from the state that everyone else does, it only makes sense to combine the two systems. That should save on administrative costs. A larger pot might also bring along better investment opportunities.

This is not going to save $430 million, of course. But it ought to save some. And in Illinois' condition, every dollar counts.

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Old 09-18-2017, 04:06 PM
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ILLINOIS
TEACHERS


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

Quote:
Former Lincoln-Way chief Wyllie could lose
$321,000 annual pension if convicted

Since the former superintendent of Lincoln-Way High School District 210 retired in 2013, his annual pension, currently north of $321,000, has ranked among the top teacher pensions in Illinois.

But after a federal grand jury this week indicted Lawrence Wyllie on fraud charges stemming from his tenure leading the south suburban school district, he stands to lose that pension distinction — and income — if convicted.

Felony convictions for crimes related to a person's work as a school official qualify for pension forfeiture, and Wyllie's case would qualify if he's convicted, Teachers' Retirement System spokesman Dave Urbanek said Friday. Wyllie's current annual pension is $321,443.52.

Federal prosecutors this week alleged Wyllie, 79, of Naperville, hid the "true financial health" of District 210 by misusing millions in bond money and fraudulently spent district funds on personal projects, including Superdog, a dog-training school he ordered built.

Wyllie also pocketed more than $30,000 in unused vacation days and a retirement bonus he wasn't entitled to, prosecutors charged.

The charges against Wyllie marked the latest turn in a long, winding saga at the financially troubled school district and follow a yearlong investigation by the Daily Southtown that exposed questionable fiscal practices at Lincoln-Way, private uses of public resources and deals benefiting insiders, including Superdog.

In large part due to decisions made under Wyllie, the district's finances atrophied over the past decade, and its leaders in 2015 made a controversial decision to shutter Lincoln-Way North, a school opened in August 2008.

.....
But the former superintendent's pension is bigger than any of his annual salaries because it's derived through an obscure actuarial calculation that boosted his pension higher than the payment he would've received under the standard formula. That actuarial calculation has been eliminated for newer members of the Teachers' Retirement System.

Wyllie's initial pension was $289,860, according to the state.

As superintendent, Wyllie's highest gross earnings reached $276,307 during his last year — $13,000 less than his initial pension.

....
But, Urbanek said, TRS does two calculations on pensions: an actuarial assessment that he described as "something that's (not) easily understood" and a standard formula used for most.

No one who entered TRS on or after July 1, 2005, is eligible for the actuarial calculation, Urbanek said.

.....
There were two reasons why the actuarial formula created a pension "that exceeded (Wyllie's) highest salary," Urbanek said.

Wyllie had more than five decades of service with TRS, which is about double the average time a typical TRS retiree accumulates with the system, Urbanek said. He also retired in his 70s, while the average age last year for all TRS retirees was 59.

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Old 09-18-2017, 06:36 PM
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KENTUCKY

http://www.state-journal.com/2017/09...ension-letter/

Quote:
Chilton warns of dire consequences in
pension letter

State Budget Director John E. Chilton warned there will be huge increases in employer contributions to public pension systems unless lawmakers enact reform.

Chilton sent out a letter Friday to employers whose workers are covered by the Kentucky Employees’ Retirement System that hikes will range from 66 to 88 percent without pension reform.


In the latest letter, Chilton told the employers that for ��scal year 2019, KERS contributions for non-hazardous employees will increase 66.68 percent and 88.45 percent for hazardous duty employees. The jump will be 71.85 percent for those in the State Police Retirement System.

“It is well known that all of the Commonwealth’s pension plans are in a crisis. Using the same investment rates of return that corporate plans are required to use – the Corporate Bond Index rate – the aggregate underfunding for all of Kentucky’s eight plans goes from $33 billion to $64 billion,” he wrote in the letter.

“Furthermore, if Kentucky plans were subject to federal standards for single-employer private plans, six of the plans would be designated as having severe funding shortfalls because their funded status is less than 60 percent. As such, federal law would require that all benefits be frozen and the plans terminated. This is true even using the old
2016 actuarial assumptions, rather than the more realistic discount rates and other assumptions required of private plans.

“The need for significant reform is evident to anyone looking at the health of the Commonwealth’s plans within that larger context.”

Chilton said to address the predicament, Gov. Matt Bevin and legislators believe it is appropriate to do two things:

1. Assess the status of all the plans, using conservative and realistic actuarial assumptions. No more pretending that everything is just fine. Everyone needs to understand the severity of the situation. To do otherwise will lead to solutions that fall short of solving the problem.

2. Examine the benefit structures with a view to lowering future costs without jeopardizing employee and retiree retirement security. To address budgetary implications to the Commonwealth and to all employers, priorities must be set and choices must be made. Unfortunately, the choices are not happy choices – make structural changes to the pension plans and/or reduce other spending. Governor Bevin and the members of the General Assembly are considering, but have not decided upon, changes to each of the plans. The PFM report [the state’s pension consultant] identified changes to bene��t
structures that would reduce the cost of each of the eight plans. These need to be considered and some of the suggested options should be implemented. I urge you to consider options that will put the financial condition of the plans and employer organizations on a sustainable path forward.

The letter said total employer contributions for Fiscal Year 2017, which ended June 30, were $857,311,370. If there is no legislative action, that rises to an estimated $872,677,346 in FY 2018, the current fiscal year, and $1,483,863,927 in FY 2019, an increase of over $611 million, from this fiscal year.

Bevin said on Friday that he still plans to call a special session of the General Assembly to address the public pension crisis, sometime this fall. However, he won’t issue the call until a framework is in place to shore up the systems.
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Old 09-18-2017, 06:49 PM
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http://siepr.stanford.edu/pension-debate-live-streaming

Quote:
Media Workshop: Understanding the Public Employee Pension Debate
It's been going on for several hours now.

http://siepr.stanford.edu/events/med...pension-debate

Spoiler:

9:30am to 9:45am
Welcoming Remarks
Presenter(s) :
Mark Duggan, The Trione Director of SIEPR; The Wayne and Jodi Cooperman Professor of Economics, Stanford University
Joe Nation, Professor of the Practice of Public Policy, Stanford University

Related Pension Tracker Projects
Olympia Nguyen, Research Manager, Public Employee Pension Project

9:45am to 10:00am
Session I
There Isn’t Really a Pension Problem, Is There?
Presenter(s) :
Joe Nation, Professor of the Practice of Public Policy, Stanford University

Topics:
Funded Ratios (CA, other states, local agencies)
Unfunded Liabilities (CA, other states, local agencies)
Public Pensions Relative to Other Debt Challenges
Employer Contribution Requirements and Crowd Out
10:00am to 10:50am
Session II
Pension Basics
Presenter(s) :
Jay Peters, Pension Consultant
Jonathan Holtzman, Public Law Group
Josh Rauh, The Ormond Family Professor of Finance, Graduate School of Business, Stanford University

The State Pension Actuary (Video)

Topics:
California Public Sector Pension Funding Policies: How Do They Compare with Private Sector Rules?
The “California Rule”

10:50am to 11:00am
Break
11:00am to 12:00pm
Session III
What is a Discount Rate, Anyway? And Why Do They Matter?
Presenter(s) :
William Sharpe, STANCO 25 Professor of Finance, Emeritus, Stanford University
Jeremy Bulow, The Richard Stepp Professor of Economics, Stanford University
Scott Terando, Chief Actuary, CalPERS

12:00pm to 12:45pm
Session IV
Pension Governance
Presenter(s) :
David Crane, Lecturer, Stanford University
Sean Bill, former Trustee, City of San Jose Retirement Board
Richard Costigan, CalPERS Board of Administration

Topic:
Who Sits On Public Pension Boards?


12:45pm to 1:30pm
Lunch
1:30pm to 2:15pm
Session V
Pension Crowd Out
Presenter(s) :
Joe Nation, Professor of the Practice of Public Policy, Stanford University
Chuck Reed, former Mayor, City of San Jose
Dev Davis, Councilmember, City of San Jose

2:15pm to 3:15pm
Session VI
Pension Reform
Presenter(s) :
Chuck Reed, former Mayor, City of San Jose
Olympia Nguyen, Research Manager, Public Employee Pension Project
Richard Costigan, CalPERS Board of Administration

Topics:
Governance
Operations
Benefits
Investments
Transparency
Models for Reform

3:15pm to 3:30pm
Break
3:30pm to 4:30pm
Session VII
Media Tool Kit and Q&A
Presenter(s) :
William Sharpe, STANCO 25 Professor of Finance, Emeritus, Stanford University
Joe Nation, Professor of the Practice of Public Policy, Stanford University
Olympia Nguyen, Research Manager, Public Employee Pension Project

4:30pm to 5:30pm
Reception
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Old 09-20-2017, 11:17 AM
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CALPERS
CALIFORNIA

https://www.ai-cio.com/news/calpers-...ricts-default/

Quote:
CalPERS to Declare Two Districts in Default


The $336 billion California Public Employees’ Retirement System (CalPERS) will likely cut loose two pension plans by declaring them in default of their financial obligations at its monthly board meeting this week.

CalPERS’s Finance and Administration Committee has recommended that the board declare the Trinity County Waterworks District and the Niland Sanitary District in default, and has called for a reduction in benefits for their workers. Trinity County Waterworks, located in Northern California, owes more than $1.5 million, while the Niland Sanitary District, which is in Southern California, owes $204,000.

Under California law, if an agency fails to pay the full amount owed upon termination of their contract, the CalPERS board can declare the agency in default and reduce retirement benefits in proportion to the amount of the deficiency in accumulated contributions.

In September 2016, Trinity County Waterworks voluntarily terminated its contract with CalPERS, and in January and February of 2017, the two had multiple discussions about the water utility’s inability to pay the preliminary termination amount.

CalPERS balked at Trinity’s request for a 20- to 30-year no-interest payment plan, and the two sides were unable to agree on a resolution for Trinity to pay the amount owed. In March, CalPERS sent Trinity an invoice for a little more than $1.5 million for the termination cost, and in April, Trinity became delinquent on its termination liability obligation.

CalPERS said it contacted the agency multiple times and sent several notices to request payment of the termination cost. Meanwhile, Trinity said it could not pay due to budget constraints, and repeated its request to pay its obligation over 30 years. In May, CalPERS sent a final collection letter to Trinity demanding payment of the outstanding amount within 10 days of the date of the letter.

The Finance and Administration Committee has also recommended that the board declare the Niland Sanitary District in default of its obligations, and reduce retirement benefits paid to employees and retirees of the agency over its failure to pay required pension contributions of just under $204,000.

CalPERS says Niland entered into a retirement contract with CalPERS in 1995 to provide retirement benefits for its local employees, but decided to terminate the contract in 2015. According to the committee, in September 2016, Niland was delinquent due to nonpayment of employer-paid contributions, associated administrative fees, and unpaid unfunded liabilities.

In June of 2017, CalPERS sent Niland an invoice for the termination liability in the amount of $203,997, and subsequently contacted the company multiple times to collect the amounts owed. CalPERS said Niland refused to pay the termination liability, and insisted it did not have a contract with CalPERS despite initiating a voluntary termination of that contract.

The CalPERS board is meeting between Sept. 18 and 20 at its headquarters in Sacramento, California.


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Old 09-20-2017, 01:40 PM
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CALIFORNIA

https://medium.com/@DavidGCrane/ca-s...s-c2804b212632

Quote:
CA Should Raise Teacher Pay By Reducing Unfunded Retirement Obligations

Fast-rising spending on pensions and other retirement costs is crushing teacher staffing and pay in California. As an example, retirement spending at San Francisco Unified School District grew 3x faster than district revenues over the last five years, absorbing $35 million that could have gone to current teachers. Worse, that happened despite record stock market gains and school revenues. Absent reform, teacher staffing and pay will decline further.

Something must be done. Public school students and teachers deserve fully-staffed classrooms and sufficient salaries. While the children of well-to-do parents can attend private schools or privately-subsidized public schools, most of California’s six million K-12 students cannot.

Someone must step up. Potential candidates fall into five categories: (i) the people who created the problem, (ii) taxpayers, (iii) students, (iv) current teachers, and (v) pension beneficiaries.

Self-serving pension fund board members and elected officials blocked honest pre-funding of retirement promises, causing today’s unfunded liabilities. While it would be wonderful justice if they could be forced to pay for the problem they created, at nearly $100 billion and growing the problem is too big for their resources.

Taxpayers didn’t cause the problem but they’ve been paying for it. Income taxes were raised 30 percent in 2012 and school revenues are up 60 percent since then but pension spending in districts like SFUSD grew more than 100 percent over that same period and are heading higher.

Students and current teachers didn’t cause the problem but they’ve been paying for it in the forms of understaffed classrooms and inadequate salaries, especially in school districts without well-to-do parents to subsidize school budgets. It’s no wonder poor and minority students in California perform worse than their counterparts in Texas, which spends less per student but has a better student-teacher ratio.

Pension beneficiaries didn’t cause the problem but unlike students, teachers and taxpayers they have NOT been paying for it. In fact, they garnered additional financial benefits from the actions that created the problem, as explained here. They need to step up.

Reducing unfunded obligations would free up billions for current teachers.

Shrinking unfunded retirement obligations by reducing un-earned future benefits would allow school districts to divert fewer dollars to retirement costs. For example, Rhode Island suspended annual increases until pension funds are better funded and moved some to-be-earned benefits to hybrid plans. Acting similarly in California could free up billions with which to boost current teacher staffing and pay. Such sacrifices by beneficiaries would be no greater than those of students, teachers and taxpayers and beneficiary retirement benefits would still be greater than those of the vast majority of their fellow citizens.

No one can be happy about making any innocent person sacrifice to meet unfunded liabilities created by corrupt pension fund board members and elected officials. But students need fully staffed classrooms and teachers need adequate salaries. Everyone needs to chip in to reach those goals.

One cannot both be progressive and be opposed to pension reform.

Unfunded retirement obligations are crushing the hopes and dreams of California’s public school students and teachers. Policymakers need to act.

NB: A different set of unfunded liabilities is crushing higher education. The University of California is losing $600 million this year compared to what it would’ve received had it simply maintained the same share of the state budget as it garnered a decade ago. Retirement beneficiaries didn’t cause that problem either but only they have avoided the consequences as taxpayers are paying more and citizens are receiving less. The state needs to reduce its unfunded liabilities. Beneficiaries must chip in there too.
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Old 09-20-2017, 01:44 PM
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Mary Pat Campbell
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Join Date: Nov 2003
Location: NY
Studying for duolingo and coursera
Favorite beer: Murphy's Irish Stout
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ARIZONA

(a little old, but just came across tabs I've had opened and hadn't closed yet)

http://www.azcentral.com/story/news/...nts/549897001/

Quote:
Pension executive defends six-figure retirement payouts for police, firefighters

Jared Smout, administrator of the financially troubled Arizona Public Safety Personnel Retirement System, on Thursday defended a pension benefit that has provided six-figure, lump-sum payouts to manyretired police officers and firefighters.

Smout told a special legislative panel there was a perception problem with the Deferred Retirement Option Plan — or DROP — and that it was a "myth" that the program has cost the pension trust a "huge" amount of money.

PSPRS records compiled by The Arizona Republic show DROP has paid out at least $1.2 billion to retirees since fiscal 2002, and it recently provided a record $944,287 payout to Kevin Robinson, a former Phoenix assistant police chief who retired July 1.

.....
PSPRS records obtained under the state's Public Records Law show that at least 316 PSPRS retirees have received DROP payments in excess of $500,000. Of those, 38 are retirees from the Phoenix police and fire departments, and each received a DROP payment in excess of $700,000.

The average DROP payment for retired police officers is $249,932, while the average DROP payment for retired firefighters is $330,282.

Smout gave a presentation called "Debunking the Myths" to a state House Ad Hoc Study Committee on PSPRS at the Capitol. Legislators did not ask questions, and they plan to have another Capitol meeting after Labor Day, with similar hearings scheduled for Yuma, Tucson and Miami-Globe.

The group, which has met three times, in January plans to formally recommend to the Legislature how to fix the PSPRS. While lawmakers in the past have tried to improve the pension system, it still is in a financial hole because of court decisions rolling back reforms, poor investment performance in the past and lucrative benefits.

That has necessitated a hike in contributions from state and municipal employers, making it difficult for some communities to meet their pension obligations.

....
Campbell also characterized DROP's guaranteed rate of return as too generous, noting it would be nearly impossible to find in the private sector. He said DROP prevents local governments from hiring new, less costly employees to replace "retired" officers in DROP for five years. Unlike many officers in DROP, those new employees also would be making individual contributions to the retirement system.

That Campbell is not me, fwiw.
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