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


Fill in a brief DW Simpson Registration Form
to be contacted when new jobs meet your criteria.


Reply
 
Thread Tools Search this Thread Display Modes
  #1381  
Old 07-17-2019, 02:03 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: 88,629
Blog Entries: 6
Default

OHIO

https://perspective.opers.org/index....rt-released-2/

Quote:
New financial report released
OPERS’ CAFR focuses on working together to preserve our system


Spoiler:
By Michael Pramik, Ohio Public Employees Retirement System

July 17, 2019 – OPERS has released its 2018 Comprehensive Annual Financial Report, a yearly look at our financial, investment, actuarial and demographic measurements.

This year’s theme is “Working Together: Responsible actions take us forward.” It focuses on the change that often must take place to ensure sustainability of a pension system: “Only with responsible change can OPERS continue to provide the financial security enjoyed by current retirees and to be enjoyed by the retirees of the future.”

OPERS employees work daily to make sure each step we take propels the organization forward to achieve five main goals:

Provide a stable pension for all OPERS retirees.
Continue to provide a meaningful retire health care program.
Minimize drastic plan design changes.
Be financially positioned to react to market volatility.
Maintain intergenerational equity.
Here are some of the facts you’ll discover about OPERS in the 2018 CAFR:

OPERS had a net position of $94.1 billion at the end of 2018.
The system’s funded status at yearend was 78 percent.
We are able to pay off our unfunded liabilities within 27 years, within the 30-year period mandated by Ohio law.
Health care expenses in 2018 were $0.9 billion, down from $1.0 billion a year earlier.
The OPERS defined benefit investment portfolio returned a loss of 2.99 percent for the year; the health care portfolio lost 5.76 percent; the defined contribution portfolio had a loss of 6.65 percent.
In 2018, member and employer contributions in all our pension plans totaled $3.5 billion.
Of the 303,920 active members in our system, 94 percent have chosen the defined benefit plan, 3.5 percent the defined contribution plan and 2.5 percent the hybrid plan.
Our new retirees’ average pension was $2,281.
Of the 212,937 retirees in OPERS, 89.3 percent remained Ohio residents as of Dec. 31, 2018.
OPERS made $5.5 billion in pension benefit payments last year to Ohio residents.

__________________
It's STUMP

LinkedIn Profile
Reply With Quote
  #1382  
Old 07-17-2019, 02:10 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: 88,629
Blog Entries: 6
Default

https://wirepoints.org/unfunded-pens...mpetitiveness/

Quote:
Forever Behind: Unfunded Pensions as a Permanent Hindrance to Competitiveness
Spoiler:
Why worry about unusually large unfunded pension liabilities? Why not let them run, or maybe even let them grow until the pensions become simple pay-as-you-go systems? Some pension reform opponents say that’s the best approach. In truth, with ever-growing unfunded pension liabilities, that’s effectively the path Illinois and some other states have been on.

The answer is that the enormous cost renders those states permanently uncompetitive. Every state seeks to maintain levels of services and tax burden that are at least competitive with other states. Exceptionally large legacy pension debt, however, makes that impossible. Services suffer and taxes increase, as they have in Illinois, because of out-sized pension costs.

Most importantly, the disparity between the least funded and best funded states accelerates. Illinois and the other worst-off states are becoming less and less able to maintain competitive levels of service and taxation compared to more responsible states.

New data from Pew Charitable Trust illustrate that result.

Their report released last week shows that the gap between well-funded public pension systems and those that are fiscally strained has never been greater. To illustrate, Pew focused on the best three states and the worst three. South Dakota, Tennessee, and Wisconsin had, on average, 97 percent of the assets needed to fully fund their pension liabilities in 2007 and remained at 95 percent funded or higher in 2017. Conversely, the three states with the lowest funded ratios—Illinois, Kentucky, and New Jersey—saw a drop from 69 percent funded, on average, in 2007, to 36 percent funded in 2017.

The same pattern applies to other states. According to Pew:

Across the country, we see this same pattern of disparity…. And although all states suffered declines in reported funded status over the five years between 2007 and 2012, states that were at least 90 percent funded by 2017 had seen their funding levels increase in the years following 2012. On the other hand, states that were less than two-thirds funded in 2017 reported further declines in financial position from 2013 to 2017 despite strong investment performance over that period.

The result? The better-off states feel little pressure on their budgets and the worse-off states have enormous portions of their budgets gobbled up by pension costs. Those three healthy states – South Dakota, Tennessee and Wisconsin – face true, total costs for pensions, pensioner healthcare and bonded debt** of less than 7% of their budget towards pensions and pensioner healthcare. But Illinois, Kentucky and New Jersey face costs of 50%, 27% and 37%, respectively.

Or look at unfunded liabilities as a percentage of personal income, also provided by Pew. For the country as a whole, unfunded pension and pensioner healthcare debt represents 11.1% of personal income. For those three best-off states, it’s under 2%. But in Illinois, Kentucky and new Jersey those costs represent 26%, 18% and 23% of personal income.

The disparity is worsening for several reasons. Pensions as badly unfunded as Illinois’ cost three or four times as much to service annually as properly funded pensions because they don’t have assets invested, returns from which funds the bulk of the cost for healthy funds. A healthy stock market like we’ve had since the Great Recession doesn’t help much if the assets simply aren’t there. Finally, at least in Illinois, we don’t even pay interest effectively accruing. The hole deepens every year just like a negative amortization mortgage, even though a quarter of our budget goes to pensions alone.

In short, the most underfunded states are tied to a ball-and-chain, consuming their budgets and overburdening their citizens. States that have addressed their pension problems properly are free to improve service, cut taxes or both.

And the gap is growing.

*Mark Glennon is founder of Wirepoints.

**See our report on this analysis prepared by Michael Cembalest at J.P. Morgan Asset Management linked here. Service on bonded debt is a small part of the total.
__________________
It's STUMP

LinkedIn Profile
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 04:47 AM.


Powered by vBulletin®
Copyright ©2000 - 2019, 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 0.15242 seconds with 9 queries