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  #1201  
Old Yesterday, 12:09 PM
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Mary Pat Campbell
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NEW JERSEY

https://burypensions.wordpress.com/2...ob-number-one/
Quote:
Job Number One

Spoiler:
The Sunlight Policy Center released another report yesterday blasting the New Jersey Education Association (NJEA), this time for their complicity in the bankruptcy of the retirement system that included a helpful history though I disagreed on a couple of points.


Unsurprisingly,the NJEA blames it all on the state: “The state’s failure to fund its share of pension costs is the only reason for [the] pension crisis faced by the state.” (page 6)

That wold be true if the state and localities were (a) provided with honest contribution amounts to fund the benefits being promised, and (b) had to put in the money. There would absolutely be no crisis if the state and localities were to put in annual contributions of $15 billion (to start).

Unions don’t object to the underfunding because they know the law protects their pensions no matter how bad the situation gets.

COLAs too?

The NJEA Flips the Legislature. In one of the more remarkable feats of political power in modern New Jersey history, the NJEA showed its enormous political clout when newly elected Gov. James Florio revived the idea of shifting responsibility for teacher pensions to school districts. After a New Jersey Supreme Court ruling mandated increased state aid to poor districts, Florio sought to raise taxes and devise a new school funding formula while relieving the state of the teacher pension burden as part of the 1990 Quality Education Act. NJEA President Betty Kraemer highlighted why the NJEA feared such a shift: “In a few scant years, increasing pension costs will eat into the dollars available for programs in schools. Local property taxes will have to rise to sup-port programs.” When Florio and other Democrats enacted the pension shift and subsequently moved tax dollars from state education aid to property tax relief, the NJEA endorsed 46 Republicans and three Democrats and put its full muscle behind flipping the legislature in the ensuing 1991 legislative election. The result: The NJEA was credited (and credited itself) with turning a Republican minority into a veto-proof Republican majority.As noted in a national news report, “Most observers said the NJEA played the biggest role in turning Democratic majorities in the Assembly and Senate into veto-proof Republican majorities.” The pension shift was postponed and ultimately repealed. (pages 15-16)

Faced with legislative elections in 2001, lawmakers fell over themselves to please the NJEA, granting both existing and prospective retirees a 9 percent pension increase. Further,the law was passed in conjunction with statutory provisions excusing non-funding of both the newly enhanced and preexisting benefits for several years. As a final sop to the NJEA, the law temporarily reduced employee contributions from 4.5 percent to 2.5 percent. In a particularly underhanded move aimed at creating “surplus” assets to fund the enhancement, the legislature reached back to June 30, 1999, to value pension assets when they were $5.3 billion higher than under the then-current valuation method—even though by 2001 the dot-com bust had in reality reduced the value of those pension assets by billions of dollars. (page 19)

The only thing the NJEA did not achieve was full funding. Politicians, keenly focused on self-preservation and presented with the choice of pleasing the NJEA or keeping state taxes down, did both—they gave the NJEA what it wanted on retiree benefits but did not spend the money to fund them. Sure, the NJEA made some noise at rallies and in the press and filed a few lawsuits, but until 2015, it never directly punished lawmakers for underfunding the way it punished them for trying to shift pensions to local districts, cutting state education aid, or reducing benefits. Instead, during the time that pensions were being shortchanged, both incumbents and NJEA-endorsed candidates were elected at extremely high rates. (pages 26-27)



https://sunlightpolicynj.org/wp-cont...ion-crisis.pdf

Quote:
JOB NUMBER ONE:
NJEA’S LEADING ROLE IN NEW
JERSEY’S PENSION CRISIS
Spoiler:
....
[page 28]

The Inevitable Result: A Fiscal Calamity That Will Damage the Whole State

As a result, the state is headed toward a fiscal train-wreck. As Figures 3 and 4 show,
retiree benefit payments are predicted to climb to an unsustainable $11 billion and 26
percent of the budget by FY2024. As the Study Commission concluded—and even the
NJEA has acknowledged—the state simply does not have the money to pay for these
benefits without either severe cuts in services or massive tax increases—and most likely
both.132 Yet that was the broken system that the NJEA wanted to lock into the state
constitution – without any reform and regardless of the consequences to the state and
its citizens.
When these bills come due, important programs that our citizens rely on will be
negatively impacted and the whole state will suffer. The Path to Progress workgroup
summed up the situation well:
New Jersey faces a fiscal crisis of unsustainable legacy pension and benefit costs … if this crisis is
not resolved, it will be impossible to meet our commitment to fully fund public schools, expand
pre-school, and make New Jersey affordable for families, senior citizens, and businesses.133
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  #1202  
Old Yesterday, 12:56 PM
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CALIFORNIA
CALPERS

https://www.mercurynews.com/2019/06/...sion-windfall/
Quote:
Borenstein: CalPERS must stop transit workers’ pension windfall
BART employees, VTA trying to capitalize on six-year-old legal fight between Jerry Brown and Barack Obama

Spoiler:
It’s been six years since the Obama administration tried to block then-Gov. Jerry Brown from applying his pension law changes to transit workers.

Finally, in November, after losing four court rulings, the federal government, now under the control of the Trump administration, abandoned its misguided meddling in California’s efforts to make much-needed fixes to its underfunded public employee retirement system.

But the political hangover remains, as the South Bay 's Valley Transportation Authority and individual workers from BART on Wednesday try to convince CalPERS that they nevertheless deserve fatter pensions than other public employees hired since 2012.

The case affects 1,431 workers statewide. CalPERS ' board should reject their claim, protect taxpayers and uphold the <a href="https://www.mercurynews.com/wp-content/uploads/2019/06/Proposed-decision-Attachment-A.pdf" target="_blank" rel="noopener noreferrer">findings of its administrative law judge</a> that transit employees are bound by Brown 's pension law changes.

Those changes, which took effect in 2013, reduced retirement benefits for new employees. It quickly set off a legal showdown with Obama’s labor secretary, Thomas Perez, who sided with a national labor union looking to undermine the pension changes.

The fight centered on a 1964 federal law that was designed to ensure public transit agencies didn 't bust unions as they acquired financially troubled private transportation companies.

It was passed in an era when private-sector unions were more powerful. Congress was concerned that the new public transit workers would lose collective bargaining rights they had gained in the private sector.

So the Urban Mass Transit Act made transportation funding contingent on Labor Department determination that contract benefits would be preserved and bargaining rights would continue. The law remains in effect today.

Fast forward nearly half a century to 2013, when Brown’s pension law changes took effect. Perez, siding with the Amalgamated Transit Union, determined that the California pension changes violated the federal transit act because they restricted what could be collectively bargained — and he threatened to withhold $1.6 billion of federal transit grants. <div id="div-gpt-ad-Cube_Article" class="dfp-ad dfp-Cube_Article" data-ad-unit="Cube_Article">


But federal courts, <a href="https://www.eastbaytimes.com/2015/03/06/daniel-borenstein-obama-administration-punishes-gov-brown-for-pension-changes/" target="_blank" rel="noopener noreferrer">starting with Judge Kimberly Mueller</a> in Sacramento, repeatedly rejected Perez’ move. While the 1964 law protects collective bargaining rights, she ruled on Dec. 30, 2014, it does not insulate transit workers from statewide changes that also affect other workers and does not foreclose all state regulator powers.

The Department of Labor 's ``failure to consider the realities of the process of public sector bargaining renders its decision arbitrary and capricious,'' Mueller ruled.

Finally, in November, the U.S. Department of Labor, now a part of the Trump administration, dropped the court fight. In <a href="https://www.mercurynews.com/wp-content/uploads/2019/06/061419-DOL-ruling.pdf" target="_blank" rel="noopener noreferrer">a letter Friday</a> to ATU, the agency rejected the union’s latest bid to block funding for California transit agencies, and determined essentially that Brown and the state had been right all along.

Meanwhile, back in California, rather than risk losing federal transit funding, Brown and state legislators in late 2013 temporarily suspended implementation of the new pension law for transit workers.

While the fight over federal funding was being litigated, newly hired transit workers were granted the same ``classic'' pension benefits as those provided employees who started work before the state retirement law changes took effect.

But the terms of the suspension were clear: It would end if and when a federal court ruled that Perez had erred in his attempt to cut off federal transit funding, which is exactly what Mueller did on Dec. 30, 2014.

Thus, CalPERS determined that workers who were hired between Jan. 1, 2013, and Dec. 30, 2014, accrued pension benefits at the more-generous ``classic'' rates for that time period. But, after that, they were ratcheted back to the rates in the new pension law — making them subject to the same limits as all other public employees in the state.

Now the South Bay’s Valley Transportation Authority and individual employees of BART hired during that time period are challenging the CalPERS rollback.

They essentially argue that the Legislature didn’t mean what it said in the law. They say that the Legislature intended for them to permanently receive the higher benefits.

A CalPERS administrative law judge has rejected that tortured reasoning. Now it’s up to the pension system’s board to decide whether to uphold the ruling or hear the case itself.

It’s time to put an end to this political silliness. As it is, thanks to the misguided rulings of the Obama administration, those workers received up to two years of inflated pension accruals.

The Legislature was clear that it intended the windfall to be temporary. Anything more would be a giveaway of public money.

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  #1203  
Old Yesterday, 03:03 PM
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Mary Pat Campbell
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ILLINOIS

https://willcountygazette.com/storie...their-pensions

Quote:
Roll Call: DeLuca votes for allowing teachers to “spike” their pensions

Spoiler:
State Rep. Anthony DeLuca (D-80) on May 31 voted for a $40 million budget package that included a hidden gem for teachers -- the removal of a 3 percent cap on end-of-career pension spiking for Illinois educators.

Signed into law by Gov. J.B. Pritzker on June 5, Senate Bill 262 included a provision that effectively doubles the cap for four years. If a school district increases a teacher’s salary by 6 percent each of those four years before he or she retires, the pension payout from the Teachers Retirement System (TRS) also increases by more than 24 percent.

The average Illinois teacher saves about 3 percent of what they will eventually collect in retirement, or $30,000 for every $1 million in pension benefits. The difference is picked up by taxpayers.

With TRS only 40 percent funded and currently holding $75 billion in debt -- the most of all five state-run pension funds -- analysts say higher property taxes will result from the pension spiking.

A report by independent research firm Wirepoints.com calculated that Illinois teacher pension benefits have grown 1,092 percent since 1987, or about 10 times inflation.

District 80 includes all or parts of Chicago Heights, Matteson, Andres, Olympia Fields, University Park, Park Forest, Wilton, Wilton Center, Symerton and Manhattan.


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Old Today, 10:58 AM
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CALIFORNIA
CALPERS
MANAGEMENT

https://www.nakedcapitalism.com/2019...h-bourqui.html

Quote:
Why Is CalPERS Still So Afraid of Elisabeth Bourqui?
Spoiler:
Those of you who follow the ever-lengthening chronicle of misconduct by CalPERS’ staff may recall l’affaire Bourqui. CalPERS is acting like it still has an awful lot to hide about her abrupt departure.

In early January, Chief Investment Officer Ben Meng, who had joined mere days before, sent an e-mail which quickly got to the press, that star hire Elisabeth Bourqui, who had joined as Chief Operating Investment Officer in May 2018, had resigned. CalPERS pointedly failed to resort to any of the normal face-saving devices when an executive is pushed out.

Since the defenestration can’t have originated with Meng (he was barely on board and could not have formed an impression of Bourqui), the only other possible instigator is CEO Marcie Frost. The manner of Bourqui’s departure reflects poorly on her maturity as a manager and as a person. Thuggish behavior by a second-tier financial player like CalPERS toward a star recruit will make other high caliber players think twice about joining CalPERS. So Frost did damage to CalPERS…to what end?

As we wrote in January:

It is hard to convey adequately how badly this resignation reflects on CEO Marcie Frost. It confirms her inability to attract and retain competent professionals. Recall that Frost not only hired but doggedly defended resume fabulist Charles Asubonen, who was booted shortly after CalPERS did what it should have done when we presented Frost and the board with detailed documentation of his fabrications.

For such an accomplished professional as Bourqui to join CalPERS said that the institution still had enough cachet to attract top people. Her unceremonious exodus is sure to give pause to anyone capable that CalPERS tries to recruit for a senior position.

The fact that Bourqui left without any transition or advance warning means it is well nigh certain that she had a dispute with Marcie Frost. Recall that the departures of the head of private equity, Real Desrochers, the former Chief Operating Investment Officer Wylie Tollette, and Chief Investment Officer Ted Eloupoulos were all announced in advance.

Initial reports indicated that Bourqui was well liked and well respected by employees, so it seems inconceivable that her performance was sub-par. It seems pretty clear what the real issue was. As one said:

There is no way this is not about private equity.

And from another prominent stakeholder:

This is bad. She was honest.

So Frost did damage to CalPERS…to what end?

The plot thickened later in January when Bouqui took the very unusual step of appearing at that month’s board meeting with a prominent employment lawyer in tow. Bourqui was seeking an audience with the board, which was obviously a non-starter.

Nevertheless, Bourqui’s bold move sent a clear public message that she thought there was something of significance that the board needed to hear, meaning staff was withholding important information.

As we wrote:

Recall that Bourqui’s sudden departure didn’t smell right….

Even though the Ben Meng e-mail of January 7 started, “Elisabeth Bourqui has submitted her resignation as CalPERS Chief Operating Investment Officer (COIO) effective today,” tellingly, CEO Marcie Frost was using a different formulation to stakeholders on Tuesday: “I didn’t fire her.”

Bourqui’s remarkable public appearance sends a strong message that she didn’t regard her departure as voluntary and intends to Do Something about that. And Frost’s statement is awfully convenient. It leaves open the question as to whether someone else fired Bourqui, or whether she technically wasn’t fired, but was “rejected on probation,” which the term of art for how California civil service employees who have not finished the one-year probationary period are terminated.

However, it does not appear that Bourqui followed up on her saber-rattling. Even though the bar for dismissing an California state employee on probation is very low, one grounds for contesting “rejection on probation” is retaliation.1 And given that the firing was carried out in a manner intended to harm Bourqui (and Frost has a reputation for vindictiveness going back to Washington), it would lend credence to a charge of retaliation.

But judges don’t like people showing up in court who have not exhausted other channels first. If Bourqui were going to go toe to toe with CalPERS, you’d have expected her first to appeal her rejection on probation to the State Personnel Board. The window for Bourqui to have appealed closed months ago.2

So why is what happened to Elisabeth Bourqui still of interest? CalPERS is going to way too extreme lengths to stymie Public Records Act requests about her.

We requested a copy of Bourqui’s resignation letter on January 8. CalPERS made a number of spurious claims for claiming the document didn’t have to be disclosed, when the First Amendment Coalition has explained why that is bogus. It provides case citations, discusses the relevant rulings, and concludes:

Based on the foregoing, Courts have found letters rescinding employment (i.e., termination) were subject to disclosure…

Additionally, California courts however have established a fairly liberal standard for disclosure of public records relating to complaints or investigations of misconduct by public employees.

So in other words, if Bourqui had been terminated and CalPERS had written a letter with derogatory information about her, that would still be disclosable, as in the personnel exemption would not apply. CalPERS’ refusal to produce Bourqui’s letter implies it was not of the “I quit Monday” sort, but had derogatory information about CalPERS, which CalPERS is not entitled to hide.

Although CalPERS is so clearly in the wrong that its refusal to provide the Bourqui letter sets up a comparatively easy Public Records Act suit, it didn’t seem worth the energy and outlay,3 particularly since all it might do is confirm that Bourqui was unhappy about the private equity investment scheme, which seems to be foundering under its own weight anyhow.

But CalPERS is acting guilty as sin regarding Bourqui, which in turn raised the possibility that her resignation letter had a damning bill of particulars about CalPERS leadership. Support for this view comes from the way CalPERS is refusing to cough up documents on a very simple Public Records Act request, which as you’ll see, we sent in on January 7. CalPERS said it would get the response to us on April 17, which already looked like slow-walking the response.



Contrast the three-months plus CalPERS allowed for the production of Bourqui-related documents to the actual response to this Public Records Act request on JJ Jelincic, e-mailed on June 7:



In a bit over two months, CalPERS found all the Jelincic documents, screened them, and sent the response over 11 e-mails, most of which contained 20 to 30 documents.

It is pretty sure that some of the documents were improperly withheld, since CalPERS has a policy of making less than complete Public Records Act request responses, and then coughing up more records when the requester gets ugly. Needless to say, this is not the behavior of a governmental body that believes in accountability and is conducting itself with the best interest of the public in mind.

One tell is the response letter’s invocation of the catchall, Government Code 6255, which “exempts records from disclosure when the public interest in nondisclosure clearly outweighs the public interest in disclosure.” Courts almost without exception reject withholding records based on this “balancing test”. Not only is it tantamount to an admission that the government body has no real basis for hiding those particular documents, but judges are wise to the fact that agencies like CalPERS treat hiding their dirty laundry as somehow being in the public’s interest, when the language is clear that the only thing that matters is the public’s interest, not the agency’s.

But CalPERS would nevertheless at least be taking the time to screen out all of its internal nattering about its efforts to pin the “leaks” tail on the Jelincic donkey via a sham investigation conducted by Lily Becker in the corporate-whistleblower-squasing section of law firm Orrick, in addition to looking for any embarrassing material and then coming up with thin excuses as to why they didn’t turn it over.

That is a long-winded way of saying that if CalPERS could process the Jelincic PRA in two months, there’s no reason for it taking three-plus for the Bourqui documents I requested.4

Except CalPERS isn’t taking three months. We’re now up to eight months plus.

On April 17, CalPERS sent a letter pushing back its delivery date to June 17.

On June 14, CalPERS blew off producing the documents again:


Now it may be that CalPERS has decided to retaliate for my submitting this request on June 3, even though public agencies are subject to the requirement to produce documents on a timely basis, and CalPERS was already not timely. The fact that both sets of records are now set for August 23 sure looks like CalPERS is playing cute:



This isn’t the first time that CalPERS has all too obviously withheld Public Records Act requests in an effort to feather its own nest.

Recall that last July, CalPERS tried to engage in election-rigging. It had set the delivery date for records that would have supported statements that Jason Perez made in his ballot statement in challenging Board President Priya Mathur’s seat for July 31, too late for him to use them to rebut her objection before an administrative law judge.

But the administrative law judge unexpectedly said she wanted to see Perez’s evidence and gave him till August 2. Without going through the gory details, here is the bottom line:

As you can see from the document embedded at the end of this post, the claim that the Public Records Act response was not ready was false. The cover letters are the very last thing to be prepared in the Public Records Act process. The cover letter was dated July 31, showing that the response was ready on July 31 and there was no legitimate reason for delaying its release until August 3. CalPERS is trying to damage control for Mathur’s misrule as Board President.

Mathur lost by a 16 point margin, so CalPERS’ efforts to put its finger on the dial proved futile. But look at the lengths to which they went.

But another way to look at this is that CalPERS’ desperate efforts to hide the Bourqui matter is merely an augury that whatever end they are trying to achieve will fail. As a wag put it, it’s not hard to notice that the rug under which CalPERS is trying to shove things is already awfully lumpy.

_____

1 As we discussed in our earlier post:

But…you might be saying….what if Bourqui really did resign? It’s not so clear cut. California recognizes that there is such a thing as resigning under duress, which in California is called “constructive dismissal” and is categorized in the California Civil Jury instructions as a sub-set of the law on “wrongful termination”.

2 Perhaps Bourqui’s lawyer did such a good job of persuading CalPERS that they’d overplayed their hand with Bourqui and she had a strong case that CalPERS decided to make a financial settlement in return for a gag order. As we discuss soon, Bourqui’s resignation letter is disclosable under the Public Records Act, and on top of that, Bourqui would largely control the one area where CalPERS could argue for redactions, that of personnel privilege. But a cash for release deal should not take all that long to negotiate.

3 If I prevailed, I would have my legal fees and costs reimbursed, but suits also take time and energy, plus some judges are super deferential to state agencies.

4 Dear Matt Jacobs and Brad Pacheco, if you think the answer is to drag your feet on all my PRAs, I can easily establish that you are discriminating against the press in your response time by looking at other PRAs. And bear in mind that a deep-pockets news organization that has won FOIA fights against government bodies much bigger and better lawyered-up than CalPERS is mucho unhappy with your PRA responses and already looking for a point of entry. So it would not be wise to establish a track record that would aid them in litigation.
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