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

Browse Open Actuarial Jobs

Life  Health  Casualty  Pension  Entry Level  All Jobs  Salaries


Reply
 
Thread Tools Search this Thread Display Modes
  #2041  
Old 12-31-2018, 03:08 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: 87,614
Blog Entries: 6
Default

CALIFORNIA

https://www.americanthinker.com/blog..._showdown.html
Quote:
California faces a pension showdown
Spoiler:
Governor Jerry Brown as he leaves office is warning that California and its public agencies are on the road to "fiscal oblivion" if pension benefits can't be adjusted down.

The media have been celebrating Governor Brown's management skills at reversing the $27-billion state deficit he inherited from in 2010 from his predecessor, Arnold Schwarzenegger, to leave office in January with a $13.8-billion surplus and a $14.5-billion rainy-day fund balance.

But Brown recently told reporters that California could be financially distressed again if the California Supreme Court rules in a case titled Cal Fire Local 2881 v. California Public Employees' Retirement System against Brown's 2012 California's Public Employees' Pension Reform Act that stopped the state and local selling of "airtime" that allowed public employees to spike their pension benefits by purchasing up to five years of unworked service credit seniority.

California drastically increased public employee pension benefits in the fall of 2003, when the state allowed employees to purchase "airtime." Prior to the pension spike, a 50-year-old fireman making $89,000 a year could retire at age 50 after 30 years of service and collect an $80,100-a-year pension with life expectancy of 76.3 years.

But under "airtime," the fireman could purchase extra years of seniority at a cost per of $0.18022 per year for every $1 of salary. For $80,197.90, the fireman could increase his pension by $13,350 to $93,450. Such an investment in "airtime" would return a spectacular income stream of $351,105 over the next 26.3 years of life expectancy.


With many California public employees purchasing "airtime" to retire at 50 and make more than when employed, Democrat Brown ended the practice in 2013 for new hires after criticism that the practice amounted to a "gift of public funds" to his union allies.

Stanford University's Institute for Economic Policy Research found that despite the state terminating "airtime" for new employees in 2013, the annual cost of funding the California Public Employee Retirement System (CalPERS) rose by 400 percent from 2003 to 2018 and would be up by 704 percent by 2030.

With an estimated unfunded pension liability of $464.4 billion in 2015, Stanford researchers estimated that the average unfunded liability per California household jumped from $9,127 in 2008; jumped to $21,491 in 2015; and would be over $40,000 in 2030.

The California Supreme Court heard testimony in Cal Fire v. CalPERS on December 5 over claims by the union that a 1955 decision set a precedent, referred to as the "California Rule," that bars state and local government from reducing any promised retirement benefits without equivalent new compensation.

Lawyers for the state argued that the California Constitution is not a "straitjacket" and that making pension benefit changes should not be illegal under the California Constitution:

If the impairment is limited and does not meaningfully alter an employee's right to a substantial or reasonable pension or if it is reasonable and necessary to serve an important public purpose, it may be permissible under the contract clause.

The biggest challenge for Brown's effort to eliminate the California Rule is that he successfully lobbied the state legislature to pass collective bargaining for public employees in 1982, just as he was retiring from his second four-year term as governor.

The Bureau of Labor Statistics reported that average cost for the average private sector employee contribution for retirement and savings was 3.9 percent, and the average public-sector cost was 11.6 percent.

But even if the California's Public Employees' Pension Reform Act survives it Supreme Court appeal, CalPERS' 2018 average cost for pensions as a percentage of worker compensation was 20.4 percent for State Industrial; 21.5 percent for State Safety; 43.5 percent for State Peace Officer/Fireman; and 55.2 percent for Highway Patrol.

The California Supreme Court is expected to release a decision regarding the California Rule in early 2019, just after Brown leaves office on January 7.

__________________
It's STUMP

LinkedIn Profile
Reply With Quote
  #2042  
Old 12-31-2018, 03:09 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: 87,614
Blog Entries: 6
Default

KENTUCKY

https://www.wdrb.com/news/sunday-edi...e0a92a565.html

Quote:
SUNDAY EDITION | Pension reform, charter funding will test teachers' clout in Frankfort

Spoiler:
LOUISVILLE, Ky. (WDRB) – Kentucky lawmakers will be heading back to the drawing board on pension reform when the 2019 legislative session gavels in Jan. 8 after some tumult during the holiday season.

The state Supreme Court ruled the pension reform law passed by the General Assembly this year unconstitutional on procedural grounds Dec. 13, and a hastily-called special session by Gov. Matt Bevin days later ground to a halt without a replacement bill after just two days.

Next year’s legislative session will provide a sense of how influential Kentucky educators will be over the next two years with issues like pension reform and public charter school funding on the horizon.


spaceplay / pause qunload | stop ffullscreenshift + ←→slower / faster
↑↓volume mmute
←→seek . seek to previous 12… 6 seek to 10%, 20% … 60%
Thousands of teachers protested against the pension reform bill at the Capitol during this year’s session. Across the state, many appeared on ballots challenging the very lawmakers who voted for the now defunct law.

But their electoral success was limited, giving a number of Republican legislators who survived such challenges comfort in forging ahead with their agendas.

Rep. Bam Carney, a Campbellsville Republican who was elected majority floor leader for the next two years, said three general camps have emerged in the House Republican caucus: those who want to pass a pension reform bill similar to Senate Bill 151, those who want to go further in reform efforts and those who don’t want to take up pension reform at all next year.

Polling the 61-member caucus, which will feature 16 first-term representatives elected in November, and consulting with Senate Republican leaders will be key in determining how House GOP leaders proceed during next year’s 30-day session, he said. All eyes will be on the lower chamber after the House failed even to vote on a pension reform bill during this month’s special session.


“I think that’s an issue that will take some time to sort through,” said Carney, who currently chairs the House Education Committee. “You have a lot of members who want to revisit where we were at with Senate Bill 151 when we set those guidelines. You have some members who want to go further, and then you have some members who maybe want to just let things ride for a little bit.”

“Right now I think if anybody says that they know the definitive answer on any of those, I think that would be a little bit of a stretch,” he added.

For Jefferson County Teachers Association President Brent McKim, standing pat and pumping more money into the Kentucky Teachers Retirement System is the ideal option. He noted that the pension system’s funded status has improved to nearly 58 percent thanks to lawmakers dedicating more money to KTRS and other public pension plans in recent budgets. At the close of the 2016 fiscal year, which covered Bevin’s first months in office, KTRS had a funded ratio of 54.6 percent.

“We’re on an upward trajectory, and there’s every reason to anticipate that as long as the state keeps making its required payments … our status will improve,” McKim said.

Bevin, however, doesn’t share McKim’s optimism. He’s painted Kentucky’s combined $43 billion in unfunded pension liabilities, among the highest in the country, as a looming financial crisis for the state.


“For the sake of our financial future, we must believe and demand that the General Assembly will return to Frankfort in January with renewed focus and determination to fully address Kentucky’s pension crisis,” Bevin said in a statement after lawmakers adjourned the special session Dec. 18.

If lawmakers pursue amending the state’s pension offerings for the second consecutive session, McKim said he hoped lawmakers would consult with educators and employee groups to build consensus on a path forward on pension reform.

SB 151, which was opposed by the Kentucky Education Association, JCTA and others, would have moved future teachers into new retirement plans that blend elements of defined-benefit and defined-contribution pensions. For those currently in the system, their unused sick days, which can be counted toward retirement eligibility, would have been capped at a certain date.

Charter school funding

Teachers could also see a renewed push to fund public charter schools in Kentucky, one of Education Commissioner Wayne Lewis’s legislative priorities for next year’s session and an item that many educators say would siphon needed tax dollars from traditional public schools.


After failing to pass such a funding mechanism this year, the idea of looking at options in the upcoming session has been endorsed by Senate President Robert Stivers, R-Manchester. Carney says there are some in the House Republican caucus who are interested in the topic as well, including him.

Bevin is also a proponent of charter schools, testifying for the legislation that ultimately became law in 2017 and made Kentucky the 44th state with such schools. Charters are schools that are publicly funded, privately managed and exempt from a number of laws and regulations governing traditional public schools, giving them more autonomy in instruction.

Still, Carney reiterated that House Republican leaders would need input from the caucus on how, or whether, to move the issue forward. One idea he floated as a possibility to get more legislators on board: setting some sort of population qualifier before charter schools can open in a county.

The General Assembly legalized charter schools during the 2017 session, months after Republicans wrested control of the House from Democrats for the first time in nearly a century.

“I certainly think we have to fund options for children and families to make choices that they feel best fit their needs, whether that be via charter schools or some other mechanism,” said Carney, who sponsored the charter school bill. “Ninety percent of our students, I feel, are always going to attend traditional public schools, and most of those schools can meet those needs. But we have families out here looking for options that frankly deserve them.”


Lewis, Kentucky’s education commissioner, agrees.

Charter school funding is one piece of his agency’s legislative agenda, and he stressed that other priorities for the upcoming session, such as giving school districts more flexibility in firing ineffective teachers and allowing superintendents to hire principals rather than school councils, are equally important in improving education for students throughout the state.

Without funding, Kentucky’s charter school law has been rendered “useless” so far, he said.

“I don’t believe they ever passed (charter school legislation) with the intention of not providing a funding mechanism,” Lewis said.

But Lewis and others are in the dark on whether lawmakers will ultimately take up charter school funding in the upcoming session. He reiterated his belief that spelling out how charters would get money should not be considered an appropriation measure, which requires three-fifths approval from each chamber.


“At this time of the year as we’re preparing for the legislative session, I think many of us in Frankfort are just like folks outside of Frankfort,” Lewis said. “All we can do is guess. I’m hopeful whether it’s this session or a future session that the General Assembly does decide to take the issue up again.”

Tiffany Dunn, an English as a second language teacher at Lassiter Middle School and co-founder of Save Our Schools Kentucky, and McKim remain optimistic that charter school funding will not be passed by lawmakers in the upcoming 30-day session.

Dunn said that based on her group’s talks with lawmakers, she has a sense that school choice measures like charter school funding won’t go far in next year’s session.

“The word that we’re getting from them is that they don’t really have a tolerance for scholarship tax credits at this point and they don’t for charter school funding either,” Dunn said.

If lawmakers want to pursue charter school funding, they'll have to maneuver legislation to Bevin's desk in 30 days.


"It's probably not a session where you're going to change the world for anything that requires funding and expenditures," McKim said.

Electoral consequences

Exactly how much deference Republican lawmakers in the House and Senate majorities will give teachers in the sessions ahead remains to be seen.

Even before legislators passed SB 151, dozens of educators filed to run for seats in the General Assembly. In the aftermath of SB 151’s passage, a few more filed to run as write-in candidates.

But despite the surge in political interest from teachers and the fervor surrounding pension reform, only 11 candidates with education backgrounds were successful in the Nov. 6 elections.


What’s more, Republicans retained super majorities in both chambers. The Democratic super PAC Kentucky Family Values benefited from significant contributions from PACs for KEA, JCTA and the National Education Association – $300,000, $40,000 and $250,000, respectively, according to Kentucky Registry of Election Finance records – that Carney alluded to in a phone interview with WDRB News.

Those developments, Carney says, have put lawmakers who voted for and ran on pension reform more at ease heading into next year’s legislative session.

“The results of the election validate the policies of our caucus that we’ve tried to pass over the last two years not only around education reforms, but also on job creation and other things,” he said. “I do think that some in the education community, what I would call a silent majority, sit back and realize and agree that some things need to be change.”

“I think that should give us confidence in the policies that we’re trying to promote,” he added.

Dunn and McKim see things differently. Dunn says Save Our Schools Kentucky has made significant inroads with lawmakers since it formed in 2017 but needs to recruit more pro-education Republicans to seek office if it wants to make an impact politically.


“Our success was not necessarily winning elections,” she said. “It was forming relationships with legislators and getting people involved.”

From his perspective, McKim doesn’t see the influence of teachers waning at the Capitol.

“I think that (House Republicans) will be interested in finding common ground on what makes sense going forward,” McKim said.


__________________
It's STUMP

LinkedIn Profile
Reply With Quote
  #2043  
Old 12-31-2018, 03:11 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: 87,614
Blog Entries: 6
Default

ALABAMA

https://reason.com/blog/2018/12/29/n...-24-million-an

Quote:
Coach Nick Saban Could Get a $2.4 Million Annual Pension, Courtesy of Alabama Taxpayers
America's highest paid public employee might win another college football national title, but he's also a good argument for pension reform.
Spoiler:
University of Alabama head football coach Nick Saban is America's highest paid public employee, pulling down a cool $11 million from the publicly funded college this year.

On its own, that fact is probably not too surprising. College football coaches are the highest paid public employees in most states, and Saban is the best college football coach in the country. When his Crimson Tide take the field on Saturday in one of the national semifinal games, he will be two wins away from a second consecutive national championship (and a sixth in just 12 seasons at Alabama).

Yes, $11.25 million is a heck of a lot of money for a public employee, especially since Alabama's football program is $225 million in debt. In the fundamentally corrupt world of college sports, however, Saban is at least a winner.

ADVERTISING

But what about when he retires? Long after the glory of Saban's national championships fade, it turns out, the taxpayers of Alabama will continue to fork over seven-figures in annual pension payments. That's according to Adam Andrzejewski, founder and CEO of Open The Books, a nonprofit that claims to have the largest database of state and federal spending records. In an article for Forbes, Andrzejewski calculates that Saban is due $2.4 million in annual pension payments from the state of Alabama, based on the coach's current salary and tenure with the school.

That staggering figure reveals one of the major flaws with the so-called "defined benefit" structure used by most public pension systems. Under a defined benefit plan, an employee is guaranteed an annual pension that's based on an employee's years of service, final salary (or, as is common, an average of the employee's salary during his or her last three or five years on the job), and a multiplier that's a special bonus for employees with special status (cops will generally have a higher multiplier than desk clerks in the Department of Motor Vehicles, for example).

Plug in the numbers, do the math, and the pension amount is set. An investment portfolio's earnings don't matter, and neither does the state's contributions to the pension plan. This largely why some states have fallen so far behind in their pension obligations: because the benefits keep accumulating even though they aren't being adequately funded.

One of the problems with a defined benefit system is that, for employees at the very top of the earnings scale, the pension plan becomes a massive transfer of wealth rather than a retirement safety net. It's certainly not in the best interest of Alabama taxpayers to continue spending $2.4 million on Saban every year for the rest of his post-retirement life. And with a state pension system that's already more than $16 billion in the red, it's also not in the best interest of Saban's fellow government pensioners.

The same is true of other highly paid public employees. As I've previously covered, California has more than 62,000 retirees getting six-figure salaries and seven retirees getting $1 million annually—led by Earl Paysinger, a former deputy police chief in Los Angeles.

Defenders of traditional, defined-benefit pension systems will often argue that the average pension is far less than what these outliers receive. That's true, of course, but the outliers are still a problem, even if they're a lesser concern than the overal structure of public pensions. As America slowly reckons with its massive pension liabilities, means-testing retirement payments for recipients with seven-figure net worths—maybe even eight figures, in saban's case—should be a no-brainer.

Saban, Paysinger, and the rest should, of course, be allowed to reclaim whatever percentage of their pensions they funded with their own contributions (a significant amount, in Saban's case). That's what 401k participants get.

But if Alabama, California, or any other state has to dig into its own tax revenue to fulfill pension promises, those six- and seven-figure pensions should not be part of the obligation. Better yet, switching to a 401(k)-style pension system for all public sector employees would remove those obligations from the outset, allowing the next Nick Saban to invest his massive salary and save for his own retirement without obligating taxpayers to replenish his pantry with oatmeal creampies until he croaks.

Put another way: Alabamans might worship Nick Saban for what he's accomplished on the gridiron, but that doesn't mean they should be forced to add to his already astounding personal wealth with their own hard-earned money.


__________________
It's STUMP

LinkedIn Profile
Reply With Quote
  #2044  
Old 01-01-2019, 10:26 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: 87,614
Blog Entries: 6
Default

UTAH

https://www.deseretnews.com/article/...h-problem.html

Quote:
Pensions, pot and gambling? Not a Utah problem

Spoiler:
SALT LAKE CITY — Don't look for the legalization of recreational marijuana or establishing a city-run casino as ways to bail out a pension fund in Utah — unlike what Chicago Mayor Rahm Emmanuel proposed to plug $28 billion in pension plan debt in his city.

Pot, gambling and poorly run government pension funds just aren't a thing in Utah, where the Utah Retirement System for school teachers, police officers, firefighters and other government workers earned a 13.6 percent rate of return in 2017.


Aaron Thorup, Utah State Retirement System
Chicago's lame-duck mayor proposed those solutions in December to fix the cash-strapped pension fund before he leaves office next May and his successor faces ballooning pension payments.

Utah's pension plan, with assets of $5.8 billion, ranks No. 8 in the country and its liabilities for future retirees are funded at 86 percent.

Some of the country's most pitiful pension plans hover in a funded ratio of just 30 percent.

Kentucky lawmakers convened an emergency legislative session this month to grapple with a $43 billion pension hole there, and California's Supreme Court heard arguments in early December challenging a reduction in pension plan benefits.

New Jersey, which is also grappling with $40 billion in pension debt, is also considering the legalization of marijuana to address its fiscal woes.

"The overall condition of public pension plans is in a wide range. There are some that are in bad condition and some that are in very good condition. There are more that are good than are bad," said Keith Brainard, research director with the National Association of State Retirement Administrators.


Sponsored Minky Couture
5 ideas for gifts that are lasting
‹ Previous Next ›
A defined benefit pension plan is a perk for government employees who often sacrifice higher salaries during the career for a job they love, such as teaching, policing or being a firefighter.

Jerry Silva, with South Salt Lake Police Department, will retire next July after 23 years on the job.

When the stock market tanked in 2008, he worried about his pension.

"When it crashed, everybody was concerned, everybody was worried," he said. "Since then, it has bounced back."

Silva, who works in the crime prevention unit and oversees the department's athletic league, got into law enforcement when officers could retire after 20 years and draw half their pay.


Jeffrey D. Allred, Deseret News
South Salt Lake police officer Jerry Silva watches warmups as he works with youth at Central Park Community Center in Salt Lake City on Wednesday, Dec. 19, 2018. Silva is set to retire soon.
Since reforms instituted in 2010, police officers and firefighters who hire on after July 2011 must wait 25 years to retire, and then they get a reduced benefit.

Brainard said Utah also uniquely — the only state in the nation — adopted a two-tier program that gives employees the option of having a pension and 401(k) or 401(k) only with a employer contribution of 10 percent of their pay or 12 percent of pay if they are in the public safety system.

Utah, Brainard added, is unique, too, in that it has a noncontributory system in which employees are not required to pay into their own retirement.

Changes to the Utah plan came at a time when multiple pension plan reforms were going on around the country, Brainard said.

Lawmakers also put new restrictions on so-called "double dipping" or post-retirement income, making those who retire wait at least a year after retirement before they can go back to work for a local or state government entity.

Silva said that change puts people like him in a bind.

He got a job offer from the University of Utah Police Department, where he would continue to get health insurance benefits, but the year's wait put that plan on hold.


Jeffrey D. Allred, Deseret News
South Salt Lake Police officer Jerry Silva works with Jason Garcia at Central Park Community Center in Salt Lake City on Wednesday, Dec. 19, 2018. Silva is set to retire soon.
"Pretty much all the changes we have seen in the last 10 years have been benefit reductions," Brainard said, as pension plans seek to meet their funding obligations long term.

Pension plans get in trouble because the government doesn't pay its required contributions.

In Chicago, leaders there diverted money from the pension plan for teachers and spent it on education.

New Jersey had a law on the books requiring the state make a full contribution.

"But the legislature just blew off its own statute," Brainard said.

Utah has that same statutory requirement, but follows it, Brainard noted.

"Utah is one of those states that has always faithfully made its full contribution, which is one of the reasons Utah is in a good actuarial position," he said.

Utah also has a conservative rate of return for its investment goal of 6.95 percent rather than the median assumption of 7.5 percent.

3 comments on this story
"We’ve avoided pitfalls and problems potentially experienced by other public pension funds by carefully managing the risk of the investment portfolio and setting a realistic and comparatively low assumed rate of return," said Daniel Andersen, executive director of the Utah State Retirement System.

"Counting on aggressive future investment earnings means you don’t have to collect as much money now from participating employers to pay for their workers’ pensions," he added. "This might sometimes be tempting and politically convenient in the short term, but it can eventually cause funding shortfalls if a pension fund doesn’t meet its aggressive earnings projections."

The fund paid out $1.7 billion in pension payments last year.


__________________
It's STUMP

LinkedIn Profile
Reply With Quote
  #2045  
Old 01-02-2019, 08:41 AM
Brian Grinnell Brian Grinnell is offline
SOA
 
Join Date: Mar 2016
Posts: 12
Default

Quote:
Originally Posted by campbell View Post
CALIFORNIA
CALSTRS

https://www.ai-cio.com/news/calstrs-...s-hope-future/



I cannot find this supposed study.
I can't find the full study, but a PowerPoint of the results was imbedded in the links from the November board meeting.

There is a lot of good information in there. CalSTRS will be vulnerable to market downturns for a long time, all the while remaining dependent on a willingness from the state and its citizens to commit to sustained, substantial funding levels.
Reply With Quote
  #2046  
Old 01-02-2019, 09:15 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: 87,614
Blog Entries: 6
Default

Thanks for the link!

(now it's time to build the 2019 thread...)
__________________
It's STUMP

LinkedIn Profile
Reply With Quote
  #2047  
Old 01-02-2019, 09:18 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: 87,614
Blog Entries: 6
Default

2019 thread here:

http://www.actuarialoutpost.com/actu...d.php?t=337178
__________________
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 12:51 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 0.38615 seconds with 10 queries