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  #251  
Old 02-13-2018, 06:20 PM
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Mary Pat Campbell
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KENTUCKY

https://surfky.com/index.php/henders...-state-pension

Quote:
CPC: Gambling to Save the State Pension
Spoiler:
KENTUCKY (2/12/18) — If enticement is inherent to gambling, then the lure of easy fixes to complex state problems is the curse of legislators. Such is the case with the latest proposal to amend the Kentucky Constitution to legalize casinos.

The question posed by HB 229 is straightforward: "Are you in favor of amending the Kentucky Constitution to allow the General Assembly to permit casino gaming if the proceeds are allocated to the public pension system for a twenty-year period?" The legislation guarantees 100 percent of the income to be dedicated to the state pension fund which is enticing to teachers and state workers unsure about their future and legislators averse to the heavy lifting necessary to restore Kentucky's fiscal health.

The bill's chief sponsor State Rep. Jerry Miller (R-Louisville) said “It’s much more palatable than a tax increase." State Rep. Adam Koenig (R-Erlanger) pointed to the pension crisis as the rationale for co-sponsoring the bill to legalize casinos. "With a[n] unfunded liability in our pension system of over $40 billion and a $1 billion hole in this budget, the time is now to raise revenue without raising taxes," Koenig said on his Facebook page.

Somehow we're made to believe that the pension crisis justifies a controversial casino bill. Never mind the negative secondary effects casinos bring to communities. Or that casinos promise pie in the sky but deliver crumbs to the state's fooled into believing they're a good thing for society.

The idea that gambling is a valid revenue stream for rescuing state government is counterintuitive. When people find themselves in financial straights, who would seriously advise them to roll the dice at a casino to solve their fiscal problems? As a matter of principle, people don’t gamble themselves to wealth. So why should the government believe it can do so? Yet, 13 House members, mostly Republicans, are advising just that.

A half-dozen gambling bills are being considered in Frankfort. State Sen. Julian Carroll (D-Frankfort) is proposing legislation to allow gambling on sporting events (SB 22). Rep. Koenig wants to legalize gambling for fantasy sports leagues (HB 248). Apparently, the lure of easy dollars coming into state coffers has confused what what was once considered common sense: "If it's too good to be true, it probably is."

Our moral imagination has been warped by vice masquerading as legitimate economic activity. Casino's promise a quick fix to long-term problems: They're an economic messiah come to save us. Or at least our pension system.

It will take a three-fifths vote by both the House and Senate to put this on the November ballot. The votes may not be there this session, but it's troubling that the leaders of our state would propose such irresponsible legislation.

If one believes in income without work; reward without sacrifice; fiscal health without fiscal discipline and simplistic solutions to complex problems, then it makes sense for Kentucky to roll out the red carpet to casinos. If you believe otherwise, then casinos aren't the answer.


https://insiderlouisville.com/metro/...fits-pensions/

Quote:
Business leaders tell lawmakers to dump teachers’ defined-benefits pensions
Spoiler:
Some of Kentucky’s wealthiest business leaders and best-connected Republican activists sent a letter to state legislators on Friday warning that schoolteachers and other public employees are getting too sweet of a deal on their pensions.

The one-page letter, apparently emailed to all members of the General Assembly, said any pension changes made during the 2018 legislative session must include “moving all future employees from a defined-benefits system to a defined-contribution system.”

Any pension bill that does not cut this benefit “willfully ignores the inherent structure problems at the heart of the crisis” and “is a disservice to the people of Kentucky,” the letter said.

Republican Gov. Matt Bevin likewise called for a switch to 401(k)-style accounts in a proposal he unveiled with GOP legislative leaders last October. But rank-and-file lawmakers rejected Bevin’s plan after facing protests from teachers in their home districts.

So far, with the 60-workday legislative session nearly half over, legislative leaders say they are not yet ready to file a pension bill of their own.

Among the 19 people signing the letter were national anti-tax activist Grover Norquist; Mac Brown, state chairman of the Kentucky Republican Party and retired vice chairman of Brown-Forman Corp.; Larry Cox, retired state director for Republican U.S. Senator Mitch McConnell; Bill Samuels Jr., chairman emeritus of Makers Mark; Jim Stuckert, former chairman and chief executive of investment firm Hilliard Lyons; Terry Forcht, banking and nursing home magnate; Ed Glasscock, chairman emeritus of Frost Brown Todd; and Ann Wells, chairwoman and co-chief executive of Commonwealth Bank & Trust.

Collectively, the group has given huge sums to Kentucky political campaigns.

The private sector switched its employees to defined-contribution pensions decades ago, the letter said. In that model, employees must save enough money from their pay, sometimes matched by contributions from their employers, to carry them through their old age.

Unlike traditional pensions, the money can run out in a defined-contribution pension plan.

“Under the existing system, Kentucky taxpayers and businesses are forced to shoulder the entire burden of risk. Pension reform that fails to change the structure of the pension system is a disservice to the people of Kentucky,” the letter said regarding the existing defined-benefits system.

“Misinformation and a false narrative have dominated this conversation for too long,” the letter concluded. “The interest of Kentucky taxpayers and the future of the commonwealth must take center stage. We the undersigned urge members of the legislature, in both chambers, to adopt bold pension reform that solves this crisis once and for all.”

House and Senate Republican leaders could not immediately be reached over the weekend for comment on the pension letter.

The average pension benefit for a retired state government employee in Kentucky is $16,161, according to 2017 state data. For schoolteachers, who do not collect Social Security retirement benefits, it’s $36,244.

Kentucky faces more than $40 billion in unfunded public pension liabilities, due largely to decades of inadequate contributions by the state, disappointing investment returns and unrealistic assumptions about payroll and investment growth.


Senator Robin L. Webb, D-18
On Facebook, state Sen. Robin Webb, D-Grayson, posted a copy of the letter 20 minutes after receiving it Friday afternoon, expressing her irritation at what she took to be a private demand.

“I would welcome their testimony at a hearing on the subject,” Webb wrote. “Further, it continues to attempt to pit taxpayers against public employees and teachers when I would guess most, if not all, have received a benefit from both by offering protection to educating them, their children and their workforce and their children. Phase II of the attack has begun at the near-halfway point of our session.”

On Saturday, the pension advocacy group Kentucky Government Retirees sent its own letter to legislators reminding them of the sacrifices public employees have made so far.

Over the past decade, as lawmakers struggled with the pension shortfall, health insurance costs were hiked for state retirees; the defined-benefits plan was closed for state workers (although not for teachers) and replaced with a less generous hybrid “cash-balance” plan; cost-of-living adjustments ended; and various other cuts were made to benefits, wrote Jim Carroll, spokesman for the group.

“What is left to ‘reform’ for Kentucky Retirement Systems?” Carroll asked.

He warned lawmakers that switching Kentucky’s future public employees to a defined-contribution plan would be costly, although it’s hard to say how costly because Bevin has declined to release a financial analysis of his proposal for state employees.

Bevin’s proposal to switch teachers to a defined-contribution pension would cost an extra $4.4 billion, according to an analysis that was released.

“The single most important action that you can take to support pensions is to adopt the budget request that provides the full employer funding for KRS,” Carroll told the legislators.


http://www.kentucky.com/news/politic...199772204.html

Quote:
Days after controversial email, support eroding in House for 401(k)-style public pensions
Spoiler:
Sentiment appears to be waning in the Kentucky House to switch public pension systems to 401(k)-style accounts as Gov. Matt Bevin proposed last October.

House Education Chairman John “Bam” Carney, R-Campbellsville, said Monday he is “leaning against” moving public employees from a defined-benefits system to a defined-contribution system.

A defined pension plan is one in which an employer offers a specified pension payment on retirement predetermined by a formula based on the employee’s earnings history, tenure and age instead of depending directly on a person’s investment returns. A defined contribution plan depends on individual investments like (401)k programs.

Carney, a teacher, said he is not sure moving to a defined-contribution system would save the state money as some of its advocates have touted. “We just may be better off to stay with defined benefits and fully fund them.”

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Rep. Jason Nemes, R-Louisville, agreed with Carney.

“We do not need to be going to defined contributions,” said Nemes. “If we are building a system from scratch, let’s have that conversation. We’re not building a system from scratch, and it would cost a great deal more money to close down the defined-benefit plan. So I don’t think we should do that.”

Nemes said the House Republican caucus “is not favoring going to a defined contribution plan” and predicted that the Republican-controlled House “will maintain some form of defined benefit plan.”

House Speaker Pro Tem David Osborne, R-Prospect, had little to say Monday on what pension changes the House might make.

Asked if thinks the state should go from a defined-benefit system to a defined contribution, Osborne said, “I think once we file a bill, we will address more specifics regarding that. Until the entirety of the bill becomes public record, I will withhold comment.”

Osborne said he is “hopeful” the long-awaited public pension bill will be filed this week, which will mark the halfway-point of the 2018 Kentucky General Assembly.

Osborne said no decision has been made as to whether the bill will start in the House or Senate.

Osborne also said he has not seen a one-page email high-profile business leaders and Republican activists sent to state lawmakers last Friday, urging lawmakers to end defined-pension benefits.

“I don’t know if I accidentally deleted it,” he said of the email that was greeted with outrage by many public employees.

The email said any pension changes made during the 2018 legislative session must include “moving all future employees from a defined-benefits system to a defined-contribution system.”

Any pension bill that does not cut this benefit “willfully ignores the inherent structure problems at the heart of the crisis” and “is a disservice to the people of Kentucky,” the letter said.

Among the 19 people signing the letter were national anti-tax activist Grover Norquist; Mac Brown, state chairman of the Kentucky Republican Party and retired vice president of Brown-Forman Corp.; Larry Cox, retired state director for Republican U.S. Senator Mitch McConnell; Bill Samuels Jr., chairman emeritus of Makers Mark; Jim Stuckert, former chairman and chief executive of investment firm Hilliard Lyons; Terry Forcht, banking and nursing home magnate; Ed Glasscock, chairman emeritus of Frost Brown Todd; and Ann Wells, chairwoman and co-chief executive of Commonwealth Bank & Trust.

Carney said the letter “didn’t speak for me and any of my colleagues. At the end of the day, I’m not sure it helped.”

Nemes said he appreciates any input but thinks the letter “came late in the process. It was not something we have not considered before.”

“The letter was insulting and offensive to all public employees,” said Brian O’Neill, a Louisville firefighter who is spokesman for the Kentucky Public Pension Coalition. The group says it represents about 350,000 Kentuckians, including firefighters, police officers and teachers.


http://kentuckytoday.com/stories/pen...islation,11779

Quote:
Pension crisis doesn't justify controversial casino legislation
Spoiler:
If enticement is inherent to gambling, then the lure of easy fixes to complex state problems is the curse of legislators. Such is the case with the latest proposal to amend the Kentucky Constitution to legalize casinos.

The question posed by House Bill 229 is straightforward: "Are you in favor of amending the Kentucky Constitution to allow the General Assembly to permit casino gaming if the proceeds are allocated to the public pension system for a twenty-year period?" The legislation guarantees 100 percent of the income to be dedicated to the state pension fund which is enticing to teachers and state workers unsure about their future and legislators averse to the heavy lifting necessary to restore Kentucky's fiscal health.

The bill's chief sponsor, Republican state Rep. Jerry Miller of Louisville, said “it’s much more palatable than a tax increase." State Rep. Adam Koenig, R-Erlanger, pointed to the pension crisis as his rationale for co-sponsoring the bill to legalize casinos, saying because of an “unfunded liability in our pension system of over $40 billion and a $1 billion hole in this budget, the time is now to raise revenue without raising taxes.”

Somehow, we're made to believe that the pension crisis justifies a controversial casino bill. Never mind the negative secondary effects casinos bring to communities, or that casinos promise pie in the sky but deliver crumbs to the state's fooled into believing they're a good thing for society.

The idea that gambling is a valid revenue stream for rescuing state government is counterintuitive. When people find themselves in financial straits, who would seriously advise them to roll the dice at a casino to solve their fiscal problems? As a matter of principle, people don’t gamble themselves to wealth. So why should the government believe it can do so? Yet, 13 House members, mostly Republicans, are advising just that.

A half-dozen gambling bills have been filed in Frankfort. State Sen. Julian Carroll, D-Frankfort, is proposing legislation to allow gambling on sporting events. Koenig wants to legalize gambling for fantasy sports leagues. Apparently, the lure of easy dollars coming into state coffers has confused what was once considered common sense: "If it's too good to be true, it probably is."

Our moral imagination has been warped by vice masquerading as legitimate economic activity. Casino's promise a quick fix to long-term problems. They’re being promoted as an economic messiah to come to save us, or at least our pension system.

It will take a three-fifths vote by both the House and Senate to put this on the November ballot. The votes may not be there this session, but it's troubling that the leaders of our state would propose such irresponsible legislation.

If one believes in income without work; reward without sacrifice; fiscal health without fiscal discipline and simplistic solutions to complex problems, then it makes sense for Kentucky to roll out the red carpet to casinos. If you believe otherwise, then casinos aren't the answer.

Richard Nelson is executive director of the Commonwealth Policy Center.

Print
https://www.courier-journal.com/stor...ngs/328398002/

Quote:
Conservative group urges lawmakers not to stick taxpayers with the tab for pension reform
Spoiler:
FRANKFORT, Ky. — A group of business leaders, conservative activists and big political donors is making a late plea to lawmakers to spare taxpayers from bearing too much of the burden for pension reform.

“Pension reform must protect the taxpayers of Kentucky, which can only be done by embracing the same structural reforms that were adopted by the private sector decades ago,” the group of 19 said in a letter to members of the General Assembly on Friday.

The letter urges that pension reform include moving future public employees into 401(k)-like savings plans.

The latest on pension reform: Here's what you should know

More: Kentucky's budget has reached a crisis and lawmakers say there's little relief in sight

Those who signed the letter include businessmen and major political donors (Corbin banker Terry Forcht, Maker’s Mark Chairman Emeritus Bill Samuels Jr., Louisville businessman Jim Patterson, Republican Party of Kentucky Chairman Mac Brown, Louisville attorney Ed Glasscock), prominent conservatives (national tax-cutting advocate Grover Norquist, Pegasus Institute Co-Executive Director Jordan Harris) and others (Lexington attorney Bill Lear, former Republican Party of Kentucky Chairman Steve Robertson).


“Under the existing system, Kentucky taxpayers and businesses are forced to shoulder the entire burden of risk. Pension reform that fails to change the structure of the pension system is a disservice to the people of Kentucky,” their letter says.

Jim Carroll, president of the advocacy group Kentucky Government Retirees, was quick to respond: “We find it remarkable that the message made no acknowledgment of the profound changes already made to (Kentucky Retirement Systems) over the past decade.

Carroll cited five reductions in benefits since 2003 including a 2013 reform bill that moved future state and local government employees from a traditional pension plan to a “hybrid plan that reduced employer risk.”

Carroll also repeated the argument that public employees have been making for months that moving to a 401(k) plan would incur new costs as mature traditional pension plans lose contributions from any new members and are eventually closed.


Harris, of the Pegasus Institute, said he was one of the key players in organizing the group and that he wrote the letter. He said Gov. Matt Bevin and his staff played no role in the decision to send the letter.

"Frankly, I don't know if it's too late, but we have been concerned that the policy debate has become one-sided. We want to be sure that the needs of taxpayers are a hefty consideration in a holistic approach to considering pension reform and the budget," Harris said.

House Speaker Pro Tem David Osborne, R-Prospect, said Monday he had not yet seen the letter. While he said he highly regarded the opinions of Kentuckians who he has been told signed the letter, Osborne said, "I'm certainly not going to allow Grover Norquist to tell me how to conduct my business."

Harris said he is a friend of Norquist, who is president of Americans for Tax Reform, and asked him to add his name to the letter because the two have discussed Kentucky's pension and budget crisis.

Kentucky’s public pension plans have a combined debt of more than $43 billion, making Kentucky’s retirement systems among the very worst-funded in America. Bevin's proposed 2018-20 state budget provides more than $3 billion for pensions. His administration has warned that pension costs that consumed 5.4 percent of state General Fund spending in 2008 will consume 14.3 percent in 2020.

More: Roads, libraries and wildlife habitats: You probably haven't heard of these budget cuts

Last October, Bevin and top Republican leaders in the House and Senate released a sweeping reform plan that would eventually shift all public employees into 401(k)-like plans and would cut several current benefits.

Bevin said the plan would keep all promises made to public employees and retirees, but leaders of groups representing teachers and public employees said that was not so. And lawmakers heard their objections.

The plan never won sufficient support in the Republican-dominated Kentucky House, and plans for a special session to pass the reforms late last year were scrapped. Republicans had hoped to quickly pass a revised reform measure in the current regular legislative session.

But private negotiations between House and Senate Republican leaders have yet to produce a revised bill. Monday is the 28th day of the current session that under the Kentucky Constitution can last no more than 60 days and the revised bill has not yet been filed.

Osborne repeated Monday, however, that a bill will be filed and that he expects significant pension reform will be passed during this legislative session.
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  #252  
Old 02-13-2018, 06:21 PM
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Mary Pat Campbell
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RHODE ISLAND

http://ripr.org/post/ri-supreme-cour...-case#stream/0

Quote:
RI Supreme Court Sides With State In Cop Disability Pension Case
Spoiler:
In a split decision, The Rhode Island Supreme Court has decided that the state Retirement Board was entitled to question a tax-free disability pension paid to a former Cranston police officer who objected after his pension was cut by the state.



The decision, released today, overturned a 2015 ruling by Superior Court Judge Netti Vogel that stated that the onetime police officer and now lawyer –John R. Grasso – could not have his pension reduced even though he has since found another occupation.

The court stated in the opinion authored by Justice William Robinson that the “specific purpose” of disability pensions for cops and firefighters is to give them pensions for injuries suffered on the job.

“We simply cannot say…that the intent and purpose of the statutes was to provide such a benefit for life regardless of whether or not the police officer or firefighter is still disabled or is able to earn from another source the same (or greater) income that he or she would have earned as a police officer,” stated the opinion.

Police officers and firefighters are eligible for tax-free disability pensions of about 67 percent of their salaries for life. Those pensions have long been the subject of political debate in Rhode Island, particularly in cases where those granted pensions have gone on to other jobs or been observed engaging in vigorous exercise, such as weightlifting.

A crucial issue before the court focused on what the General Assembly’s intent was when it approved the disability pension regime. Chief Justice Paul Suttell and Justice Francis Flaherty dissented from the 3 to 2 decision.

Suttell said that the legislative intent of the pension law was not ambiguous. Rather, he said, it was “very clear and crystalline” and specifically prescribes the allowance for police and firefighter disability and does not contain authority for reducing retirement payments.

“I might agree with my colleagues in the majority that, as a matter of policy, an accidental disability beneficiary…should be subject to periodic medical examinations if gainfully employed. The situation before us concerning Mr. Grasso is a prime example,” wrote Suttell.

Yet, the chief justice said, “there are legitimate reasons for treating police and firefighters who receive an accidental disability retirement allowance differently from other accidental disability beneficiaries. In my view, it is a question properly assigned to the legislature.”

Grasso is a Providence lawyer. His website says he focuses on criminal defense law
http://www.providencejournal.com/new...ficers-pension

Quote:
R.I. high court sides with state in cutting former police officer’s pension

Spoiler:
PROVIDENCE, R.I. — The Rhode Island Supreme Court has sided with the state Retirement Board in a case centering on the $48,893 disability pension paid to lawyer and former Cranston police officer John Grasso, who fought back after then-General Treasurer Gina Raimondo suspended his pension.

In a decision issued Monday, the state’s high court vacated a Nov. 15, 2015, decision by Superior Court Judge Netti Vogel that, in effect, said Grasso — who had been receiving a tax-free, disability pension since 2002 — was not subject to an earnings offset in the event he found other “gainful employment” and independent medical examinations in order to continue receiving his tax-free pension.

The high court disagreed, noting that the purpose of the law is “to provide for an accidental disability pension for a police officer or firefighter who is injured on the job and cannot work due to his or her disability.

“We simply cannot say ... that the intent and purpose of the statutes was to provide such a benefit for life regardless of whether or not the police officer or firefighter is still disabled or is able to earn from another source the same (or greater) income than he or she would have earned as a police officer or firefighter.”

The legal dispute came to light in October 2014, when then-gubernatorial candidate Raimondo drew attention to the $1 million that, she said, had been saved on her watch as state treasurer by reducing or suspending the disability pensions of 16 former state and municipal workers who had been overpaid.

The retirees — including several former police officers, a former lieutenant in the Cranston Fire Department and a former Charlestown police chief — all “earned income in excess” of what they were allowed to earn and still collect their full disability pensions, according to the treasurer’s office.

The alleged overpayments ranged from $1,168.79 in one case to $388,953 in another case that spanned more than a decade.

The state retirement system had hired an independent auditing firm — and ultimately an investigator — who identified a total of $1,052,406.42 in “over-earnings” by these 16 retirees. One of those retirees was Grasso whose reinstated pension will now be suspended again.

The way the Retirement Board interpreted the law: a disability pensioner has excess earnings when his or her “total earnings” exceed his or her projected salary, which is defined as the amount the pensioner would have earned “had he or she still been working in the position from which he or she retired.”


For example: if a retiree with a $20,000 pension had continued working in a job that now pays $50,000 a year, he or she could keep $30,000 of their earnings from a new job outside government, but any income above that would be deducted from their pension.

Grasso’s lawyer Joseph Penza argued that the Retirement Board not only violated Grasso’s due-process rights by suspending his pension, without a hearing, until it recouped at least $81,000 in alleged overpayments, but it also disregarded a 1980 law that “specifically and unequivocally revoked” the state Retirement Board’s power to “adjust” accidental disability pensions paid to former police officers and firefighters based on their other earnings.

Vogel sided with Grasso. The state appealed.

“While we respect the court’s decision, we do not believe that individuals of working age who engage in highly compensated careers after leaving public service should continue to receive lifetime, tax-free disability pensions,″ General Treasurer Seth Magaziner said at the time.

In Monday’s ruling, the justices said, “While we admire the trial justice’s thoroughness and respect her perspective, we simply cannot agree with her conclusion. We do agree with the trial justice that granting an accidental disability pension which would continue with no requirement for submitting to IMEs or for the reporting of other gainful employment would not necessarily be absurd.”

“However, the General Assembly would have to be pellucidly explicit if it should wish to do something so extraordinary. Statutory silence alone is quite inadequate to convey such an intent in a case of this nature.”

A “disappointed” Grasso said, “I feel bad that we lost and I feel bad for the police and firefighters who sustain career ending injuries in the line of duty who will be affected by today’s decision. I fought hard for myself and I fought hard for those men and women.”

“Wow,″ said Penza. “I’ve been doing this for 45 years. There’s not too many times that I get shocked, but this was one of them.” He said he represents about a half dozen others in the same legal situation as Grasso, and he will likely recommend they voluntarily dismiss their cases.

At last report, the retirement system was taking steps to recoup alleged overpayments to Cranston police Sgt. Martin Cappelli; former Smithfield police officer Carson Orellana; former North Cumberland firefighter Paul Smith: former airport crash-rescue worker Michael L. Williams; former corrections officer Michael Warner; former South Kingstown police detective Caleb George; former Cranston fire Lt. Alfred Benjamin; former Central Coventry Assistant Fire Chief Joseph McAllister; former Cumberland fire Lt. Buddy Bonollo; former state environmental management officer Scott McNamee; former Tiverton fire Capt. David Homen; former Lincoln rescue worker Kimberly Arnold; former correctional officer Joseph Neto; and former Charlestown Police Chief Michael Brady.
http://wpri.com/2018/02/12/west-warw...pension-board/

Quote:
West Warwick police, firefighters take $364,000 question to pension board
Spoiler:
WEST WARWICK, R.I. (WPRI) — A number of former police officers and firefighters, concerned about a retirement fund that was closed 50 years ago but possibly never invested or distributed, brought their questions to the town’s Pension Board meeting Monday night.

Documents indicate the John Hancock Annuity account, comprised of contributions from several police officers and firefighters and the town, was worth almost $364,000 in 1969, when it was closed.

But it dwindled to a check for just over $66,000, mailed to the pension board about a year ago with no explanation, according to board members. That provoked retired police officer Kevin O’Connell, whose father is one of the officers who contributed to the annuity, to start asking questions.

“It didn’t make any sense,” O’Connell said. “What happened to the money?”

Town Solicitor Timothy Williamson said West Warwick “is attempting to obtain information from John Hancock” to provide evidence about the annuity and possible disbursements.

“At this time, the town has no evidence to believe that the terms and conditions of the original or modified contract(s) have not been complied with; nor have been altered in any manner,” Williamson said.

He has not responded to a question about whether or not the $66,000 check came without any additional correspondence or explanation.

Target 12 has called, emailed and contacted John Hancock Investments through Facebook, without a response.

Members of the Pension Board agreed at Monday night’s meeting that the retirees deserve their money and they will work to find out what happened.

“What is it gong to take for this pension board and the Town of West Warwick?” O’Connell asked at Monday night’s meeting. “The time is ticking. They deserve some answers.”

O’Connell said he is giving the board 60 days before he hires a lawyer.

Retired police officer Jean Tellier contributed to the annuity and wonders what the 1969 total might’ve grown to with even 4 to 5 percent compound interest over five decades.

A compound interest calculator indicates $364,000 with 5 percent interest compounded annually over 50 years would’ve grown to be just over $4 million.

“The thing is back then we took people at their word,” Tellier said. “I just assumed all of these years that money was going where it was supposed to go.”

Tellier remembers hearing the money would be added to the new pension system. But the pension report states, “John Hancock will not transfer the money” to the new pension fund.

O’Connell said there are about 20 living retirees and widows who potentially have a stake in the old account.

“They put $72,000 of their own money into that John Hancock policy [that with the town’s contribution and interest totaled $364,000 in 1969], and never derived a benefit from it,” O’Connell said. “And that’s concerning.”
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Old 02-13-2018, 06:22 PM
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ARIZONA

https://www.azcentral.com/story/news...ons/324653002/

Quote:
Arizonans may pay higher court fees with new bill to fund pensions for judges, politicians
Spoiler:
It may cost Arizonans more to use the state's court system, after a House panel Monday voted to increase judicial fees to prop up the severely underfunded pension fund for politicians and judges.

HB 2564 raises 55 Superior Court and 15 justice base court fees, while slightly cutting the distribution formulas for domestic-violence services, child-abuse prevention and county general services.

If the legislation becomes law, it will cost a bit more to file for divorce, obtain a power of attorney or file a subpoena. Fees will increase from $2 to $18, depending on the court service. For example, an application for probate court will increase to $149 from $131.

MORE: Arizona pension system for police, firefighters hires contractor for media outreach

The House Banking and Insurance Committee approved HB 2564 in a 7-1 vote.

Money for elected officials' pensions
The legislation is projected to raise up to $2.5 million for the Elected Officials' Retirement Plan, according to Jerry Landau, the government affairs director for the state Supreme Court and a supporter of the bill.


Landau said while the distribution formula is being lowered for social services they should receive the same amount of money because the fees will be higher and they will be "held harmless."

A portion of court fees have historically been used to help fund the pension plan, as $8.6 million was brought in last year.

SEE ALSO: Study concludes Arizona's public-safety pension fund among worst-performing in nation

Rep. Eddie Farnsworth, R-Gilbert, cast the lone no vote. He said the legislation amounted to trying to fix a funding problem with hidden taxes. The Legislature needs to make a comprehensive fix that includes asking voters to change the state Constitution, which prohibits state public pension benefits from being cut.

A majority of funding for the pension plan comes from government employers (taxpayers); elected officials contribute a portion of their pay, 13 percent, toward their pension benefits. Pension officials have said the amount coming from government employers — 23.5 percent of an employee's pay — is not enough to keep the system afloat.

Lawmakers also are considering raising contributions from employers to about 61 percent, though a bill to do that failed Monday. That legislation likely is to be reintroduced.

The pension system for politicians and judges is managed by the Public Safety Personnel Retirement System, which also oversees pensions for correctional officers.

Fund could go under
Arizona's pension system for public safety workers,
Arizona's pension system for public safety workers, politicians and guards is among the worst performing in the U.S., a national report found. (Photo: Tom Tingle/The Republic)

The EORP fund is in danger of going bankrupt in less than 10 years because of generous benefits, poor investment returns, court rulings and legislative decisions to close the plan to new enrollees.

A Maricopa County judge last year ordered the Legislature to significantly increase funding for EORP. Superior Court Judge Timothy Thomason did not tell the Legislature how, specifically, to fix the shortfall but he advised that payments from public employers would need to nearly double or lawmakers would need to pump an additional $43 million a year into the trust from the general fund.

SEE ALSO: Arizona legislator kills bill that would have given female inmates free feminine products

Rep. David Livingston, R-Peoria, sponsored the legislation to raise court fees. He said he's trying to fix the problem, otherwise the system will go broke and the state will face lawsuits from retirees. EORP only has about 33 cents for every dollar needed to pay the benefits of those collecting a pension and those who qualify.

The average EORP pension last year was $53,088, according to system records. That's up 41 percent from 2008, when the average pension was $37,668. The consumer price index, a key measure of inflation, rose 11.55 percent in the metro-Phoenix area during that time, according to the federal Bureau of Labor Statistics.

The state's pension problem is nothing new. An Arizona Republic investigation in 2010 found dozens of elected officials made more in retirement pay than they earned while in office. Legislative efforts that followed to fix the financially troubled EORP were thrown out in court.

Other legislative fixes
Meanwhile, other bills in the House and Senate would alter pension benefits for elected officials and judges.

Those retirees have historically received benefit increases of 4 percent a year. Legislation in both chambers would change to a cost-of-living adjustment not to exceed 2 percent, which is expected to save money for the system.

RELATED: Phoenix approves plan that could add billions to pension debt

Retired teachers and state employees who are part of the more financially sound Arizona State Retirement System have not received a permanent benefit increase in retirement payments since 2005.

It will likely be several years before ASRS hits a trigger to grant a pension increase for its members, said David Cannella, an ASRS spokesman. The ASRS pension fund must post investment returns that exceed 7.5 percent over a 10-year rolling period for an increase to occur.
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Old 02-13-2018, 06:23 PM
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NEW YORK

http://www.nydailynews.com/news/poli...icle-1.3814796

Quote:
New York pension fund reaches record $209B
Spoiler:
ALBANY — The state pension fund ended 2017 at an all-time high, state Controller Thomas DiNapoli is set to announce Monday.

The fund has hit $209.1 billion, said DiNapoli, the state pension system’s sole trustee. That’s up 8.7% from the fund’s $192.4 billion value at the start of the fiscal year on April 1. The overall third-quarter rate of return in the final three months of 2017 was 4.1%.

“A strong equities market continued to provide solid returns on investments during the last three months of 2017,” DiNapoli said.

The numbers do not include the dramatic drop in the market last week.

N.Y. pol to pension fund: Pull out of private prison companies
“Notwithstanding recent volatility, we have welcomed the stock market’s nearly decade-long rise,”DiNapoli said.

“Our foremost goal will always be to find stable, long-term returns that will continue to provide retirement security for the pension fund’s more than 1 million members, retirees and beneficiaries,” DiNapoli said.

The fund had 40% of its assets invested in publicly-traded domestic equities, 23.7% in bonds and mortgages, and 18.1% in international public equities, 7.6% in private equities, and 6.5% in real estate.

The plan, the third-largest public pension fund in the country, covers more than 1 million current and retired workers from state and local governments, excluding New York City.

DiNapoli argues the system remains among the best-funded in the country.


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Old 02-13-2018, 06:40 PM
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PROVIDENCE, RHODE ISLAND

Quote:
Riley: $1 Billion is Cost of Providence Pension Lies to Taxpayers

Spoiler:
If Providence had contributed an appropriate amount to their police and fire pension plans since 2003 when David Cicilline was elected, we would not have such a desperate situation today. But 15 years of lying about pension assets, siphoning retiree funds to cover operating expenses and purposely overstating the discount rate and pension returns have taken their toll.
Providence sits at approximately 20% funded, the worst in the nation. OPEB (other post-employment benefits) is currently not funded at all and is an additional $1 billion-dollar obligation (bigger than the whole State of Rhode Island).

The last nine years have included one of the greatest equity and bond market advances of all time and had we been 80% funded throughout that period. The corpus would have grown from $863,000,000 in June of 2007 (80% of $`1.079 billion liability) Instead there was only $426,000,000 in the fund.

The difference in returns from 2007 to 2018 of an 80% funded pension plan and the misleading purposely underfunded pension plan of Cicilline, Taveras, and Elorza is enormous. The current assets in our pension plan are approximately $310 million (overstated as $348 million on June 30, 2017)

From Providence 2017 CAFR Exhibit VIII

Receivables:

Loans receivable $26,593,000

Due from other funds $45,638,000

Other $669 14

Total receivables $72,900,000

A return of 7.5% on the corpus of $863 million compounded from June 2007 to 2017 would have been $925 million dollars for a total asset value of $1.78 billion. Providence would be fully funded today. Years of lying about pension assets and returns and diverting employee and employer payments to cover cash flow and operating costs have cost taxpayers nearly $1 billion dollars. Governor Raimondo needs to assure state taxpayers that do not live in Providence that she will not bail out Providence on the state taxpayers' dime.

Additionally, for at least 20 years, the city has taken money out of pension contribution of each police and fireman s paycheck. Evidence shows that the City, instead of investing as they received the contributions, used those contributions to operate the city and paid the pension plan back a year later with no interest. I believe this to be criminal and unethical.


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Old 02-13-2018, 06:51 PM
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PENSION OBLIGATION BOND

https://www.sgvtribune.com/2018/02/1...on-obligation/

Quote:
La Verne City Council authorizes city administrators to move forward on measure to address pension obligation
Spoiler:
LA VERNE >> With future employee retirement costs expected to grow significantly in the future, La Verne City Council members recently approved a 3-year, multi-pronged plan expected to both reduce costs and generate revenue as the city prepares to meet its pension obligation.

City Council members approved the plan at their Feb. 5 meeting, said City Manager Bob Russi on Monday. With the plan approved, city staff can now begin putting the strategies in the plan into action, he said.

“The next step is to take that and roll it into the coming budget,” Russi said, referring to the 2018-2019 fiscal year budget that begins July 1.

The combination of cuts and revenue-generating steps are expected to result in a savings of about $1.4 to $1.5 million, Russi said.

Cities across the state are facing significant costs associated with what is referred to as the unfunded actuarial liability for employee retirement expenses.

In La Verne’s case, the unfunded liability totals nearly $50 million. The figure represents a gap between the retirement costs for current and past employees and the amount that the California Public Employees Retirement System currently has or expects to generate to fund those obligations, according to a city staff report.

City Council members reviewed the city’s costs in a daylong meeting Jan. 11 where city administrators presented a series of strategies intended to both cut costs and generate revenue, a step necessary as part of pursuing a pension obligation bond that will be used to pay off the unfunded liability.

La Verne could pay the cost using a CalPERS developed 30-year payment plan that would include an interest rate of 7 to 7.5 percent, according to a city staff report.

Selling pension obligation bonds gives the city a means to secure the money it needs to pay off its pension costs in one lump sum and pay off the debt over the same 30-years at a lower interest rate, depending on the bond market, the staff report reads.


City staff will begin assembling a team that will handle preparations associated with the issuance of a pension obligation bond, Russi said. Once the necessary work and documents are drafted, the matter will be presented to the council for approval.

Parts of the plan to be carried out within the first year include implementing an annual business fire inspection fee; temporarily suspending general fund contributions to the city’s capital improvement program; and selling a piece of excess property on Amherst Avenue. The land was acquired decades ago and was intended to be used for a reservoir but that land could not accommodate homes.

Other steps include contracting for street sweeping services with an outside company, a step that will require reassigning an existing city employee to different duties within the public works department, Russi said.

Some other steps involve La Verne’s Fire Department and are drawing criticism from the La Verne Firefighters Association, which represents the city’s firefighters, fire engineers and fire captains.

The plan calls for making three engineer/paramedic positions at the city’s Station No. 3 Esperanza Drive into post filled with firefighter/paramedics taking the department from nine to six engineers and from 15 to 18 firefighter/paramedic positions. Russi said.

Firefighter/engineers would be reassigned to other engineering posts, he said. How those moves will take place will be addressed in July, Russi said.

Another change involves the bonus for firefighter/paramedics. La Verne pays a 5 percent bonus to firefighters who have paramedic certification who are not assigned to staff an ambulance. Those who are assigned to an ambulance receive a 15 percent bonus. Under a 2014 agreement between the city and the Firefighters Association, the city can roll back the 15 percent to a 5 percent bonus if a firefighter/paramedic is not assigned to an ambulance. This move would affect six firefighter/paramedics.

“We haven’t exercised that” provision, Russi said. “Now we’re putting it in place.”

To meet operational needs, the city needs 12 firefighter/paramedics, Russi said.

The changes are an attempt to save money but hurt the affected firefighters and the public,said Caleb Mason, an attorney who represents the association.

If the city can’t afford its own fire department then city leaders “should look at all the options,” Mason said.

That would include seeking information to determine if it’s more cost-effective for the city to contract with another fire agency for services, an idea the City Council turned down, he said.

“That’s not a healthy way to manage public safety,” Mason said.

Mayor Don Kendrick said the city is working to find a way to meet its pension obligation and at the same time “find a way to maintain the services that residents expect.”

The plan and the use of the pension obligation bond provide a means of addressing those needs, he said.
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Old 02-13-2018, 06:52 PM
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KENTUCKY

https://www.ai-cio.com/news/kentucky...blic-db-plans/

Quote:
Kentucky Business Leaders Urge for Reform to Nix Public DB Plans
General Assembly, pension advocacy group publicly respond via social media.
Spoiler:
Pushing for a radical shift for defined benefit plans to help Kentucky’s staggering pension system, a group of the state’s top business leaders and Republican activists sent a Friday warning to the General Assembly.

Citing “misinformation” and a “false narrative” that Gov. Matt Bevin’s controversial proposal would harm the benefits of public employee, the 19-member group urged that the long-delayed pension reform bill move future employees from the system’s current defined benefit structure to a 401(k)-style plan.

The group, whose members include anti-tax activist Grover Norquist; Mac Brown, state chairman of the Kentucky Republican Party and retired vice chairman of Brown-Forman Corp.; Larry Cox, retired state director for Republican US Sen. Mitch McConnell; Bill Samuels Jr., chairman emeritus of Makers Mark; Jim Stuckert, former chairman and chief executive of investment firm Hilliard Lyons; Terry Forcht, banking and nursing home magnate; Ed Glasscock, chairman emeritus of Frost Brown Todd; and Ann Wells, chairwoman and co-chief executive of Commonwealth Bank & Trust; argues that the current system actually harms the taxpayers and businesses.

“Under the existing system, Kentucky taxpayers and businesses are forced to shoulder the entire burden of risk. Pension reform that fails to change the structure of the pension system is a disservice to the people of Kentucky,” the letter read. “Pension reform must protect the taxpayers of Kentucky, which can only be done by embracing the same structural reforms that were adopted by the private sector decades ago, moving all future employees from a defined benefits system to a defined contribution system.”

Upon receiving the letter, members of the General Assembly were not amused. State Sen. Robin Webb, D-Grayson, took to Facebook to voice her displeasure, going so far as to post a copy of the letter.

“I received this email at 2:11 pm today demanding that we make ‘structural reforms’ to the system and move to a 401(k)-like plan that is costly in transition and unsustainable with existing and anticipated obligations,” Webb said in a Facebook post. “I would welcome their testimony at a hearing on the subject. Further, it continues to attempt to pit taxpayers who aren’t teachers and public employees, who also pay taxes, against public employees and teachers when I would guess most, if not all, have received a benefit from both by offering protection to educating them, their children and their workforce and their children. “

Jim Carroll, president of the pension advocacy group Kentucky Government Retirees (KGR) sent a response to legislators Saturday, taking a page out of Webb’s book and also reposting it on social media. In addition to stating that another structural change would be “pointless and counterproductive,” the letter also addressed previous reforms made to the Kentucky Retirement System (KRS) over the past decade that the signees of the original letter did not address.

“As both taxpayers and stakeholders in Kentucky Retirement Systems, we feel compelled to respond to an email message that you recently received advocating changes for Kentucky Retirement Systems pension plans. We find it remarkable that the message made no acknowledgment of the profound changes already made to KRS over the past decade. Within the confines of an email message, I won’t provide an exhaustive list of measures to save costs and reduce employer risk.”

Some of the examples KGR mentioned were the reduction of health insurance subsidies in 2003, the 2008 establishment of a second benefit tier, the 2012 elimination of cost-of-living adjustments (COLA) and a subsidy for dependent insurance coverage for non-hazardous employees, and a drastic reform from Senate Bill 2 in 2013.

“What is left to ‘reform’ for KRS?” Carroll wrote.

“Moving to a defined contribution plan incurs substantial new costs as the mature DB plan is eventually closed. The existing plan will be choked off from new contributors and actuaries recommend that the assumed investment rates be lowered to preserve assets for the remaining and final retirees,” the letter read. “What does this mean for KRS? Frankly, we can’t quantify the effect because the KRS actuarial analysis for the original pension bill is being suppressed. We do know that the teacher retirement actuaries identified new costs in the billions as a result of closing the DB plan.”

Kentucky is one of the worst-funded states in the country, facing more than $40 billion in unfunded public pension liabilities. Last year, Bevin promised a “special session” in which lawmakers would work together to come up with a pension reform suited to sustainably fund the system. With the current legislative session nearly halfway over, there’s still no reform in sight, although lawmakers have been expecting to see one shortly. Under the state constitution, the session, now in its 28th day as of Monday, cannot be held longer than 60 days.

“Phase II of the attack has begun at the near halfway point of our session,” said Webb.

Just last week, the office of Attorney General Andy Beshear issued a ruling ordering Bevin to release an actuarial analysis that would reveal how much the governor’s pension proposal would cost. According to the ruling, Bevin had broken the public access laws when he refused to release the analysis in November after a separate analysis was released without his permission. In the analysis, the firm estimated that Bevin’s proposal would cost the state $4.4 billion more over 20 years after comparing the governor’s reform to the continuation of the current pension system with full funding.


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Old 02-13-2018, 06:52 PM
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CALIFORNIA

https://www.ai-cio.com/news/calpers-...ay-stock-drop/

Quote:
CalPERS Loses $15B in Stock Drop
But fund’s 4.6% loss is nearly half of what market lost overall, Eliopoulos says.
Spoiler:
The California Public Employees’ Retirement System, the largest US pension plan, lost more than $15 billion in assets under management from the day the stock market began to collapse on January 26, through February 9, 2018, Ted Eliopoulos, the system’s chief investment officer, disclosed Monday.

Eliopoulos, speaking at the system’s Investment Committee meeting in Sacramento, said the retirement plan had lost 4.6% of its AUM during the 11-day period. He said CalPERS’ AUM stood at $345.39 billion as of February 9.

But Eliopoulos said the pension plan’s diversified portfolio saved it from more severe losses. He noted that the S&P 500 Index lost 8.7% during the same t period. CalPERS has approximately 50% of its overall portfolio in equities.

Eliopoulos said the low stock market volatility of the last two years may be over.

“Now looking forward to 2018…we’re seeing the beginning of the market environment that may be shifting,” he said.

While it is unclear just how volatile markets will be in the rest of 2018, Eliopoulos said that stock market volatility is more a norm than the exception. He said that stock market declines of 10% are “not unusual” when taking into account stock market historical perspective.

Ironically, Eliopoulos gave his market discourse on the same day he disclosed that CalPERS had strong investment performance in the calendar year 2017.

CalPERS, he said, saw a 15.7% overall return in the year, beating its 15.5% custom benchmark.

Eliopoulos said strong stock market performance in 2017 made equities CalPERS’ biggest performing asset class with a 24% return. It was slightly under, however, CalPERS’ custom equity benchmark of 24.4%.

Private equity was the second-best producing asset class in 2017, with an 18% return, but that was also below the custom benchmark of 22.9%. Fixed income posted a 7.2% return in 2017, beating its custom benchmark, which produced a 6.2% return. Real assets, which includes real estate and infrastructure, posted an 8.5% return in 2017, beating the custom benchmark of 6.4%. Meanwhile, CalPERS’ inflation-sensitive asset class had a 6.3% return compared to its custom benchmark’s 6.2% return.

The inflation-linked asset class is made up of two main asset types: inflation-linked bonds and commodities, which include commodity futures, forwards, swaps, structured notes, and options.

Going forward, Eliopoulos noted Monday that CalPERS faces more muted returns.

CalPERS officials previously have said t they expect annualized investment returns in the low 6% range over the next decade.

But Eliopoulos noted that on a more positive note, CalPERS is in the process of lowering its yearly rate of return from 7.5% to 7%.

He said that is bringing in more contributions from employers and ending the practice of CalPERS having to sell off assets to pay pension beneficiaries.

In 2016, CalPERS was forced to sell around $4 billion in assets because it paid out $20.5 billion in benefits, $4 billion more than it had in its accounts.
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Old 02-13-2018, 06:53 PM
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NEW YORK

https://www.ai-cio.com/news/nys-comm...s-200-billion/

Quote:
NYS Common Retirement Fund Cracks $200 Billion
Strong equities helped drive fund in fiscal Q3.
Spoiler:
In its third quarter results for fiscal 2018, the New York State Common Retirement Fund returned 4.12%, growing the fund to an estimated $209.1 billion.

“A strong equities market continued to provide solid returns on investments during the last three months of 2017,” New York State Comptroller Thomas P. DiNapoli said in a statement. “Notwithstanding recent volatility, we have welcomed the stock market’s nearly decade-long rise. Our foremost goal will always be to find stable, long-term returns that will continue to provide retirement security for the pension fund’s more than 1 million members, retirees and beneficiaries.”

According to the Comptroller’s office, the fund’s estimated value reflects the benefits paid out during the period ended December 31, 2017. The audited value as of the previous fiscal year was $192.4 billion.

As of December 31, nearly 60% of the fund’s assets were in publicly traded equities (40% domestic, 18.1% international). Cash, bonds, and mortgages had a 23.7% allocation. Private equity and real estate accounted for 7.6% and 6.5%, respectively. The remaining 4.1% of the portfolio was rounded out by absolute return strategies (2.6%), and opportunistic alternatives and real assets (1.5%).

Recently, Di Napoli announced the fund’s ESG-fueled investment plan to shift equities in high-carbon stocks to low-carbon equities as part of an effort to move away from exposure to fossil fuels and other pollutants. Using a low-emissions index designed by Goldman Sachs Asset Management, the fund will replace the high-carbon stocks with tech stocks and environmentally friendly companies.


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Old 02-14-2018, 11:27 AM
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PHOENIX, ARIZONA
PENSION OBLIGATION BONDS

https://www.azcentral.com/story/news...ebt/329429002/

Quote:
Pension trick may save Phoenix $10 million
Spoiler:
Phoenix is trying a creative new strategy to chip away at its $4.4 billion pension debt.

Yes, you read that right. Phoenix owes $4.4 billion to its retirees. But the new plan could knock off $10 million of that over the course of 20 years.

The city — along with most cities across the Valley and the country — has struggled with how to conquer its pension liability for years.

As the debt grows, so does the city's annual debt payment. That cost has increased at a higher rate that the city's revenue, leaving city officials with tough budget choices.

The city is testing a new maneuver in the wastewater department that will allow it to pay off a portion of pension debt early, therefore eliminating the interest it would pay over time.

The city owes $74 million for wastewater department employees' pensions, but it only has to pay about $6.4 million per year. Currently, the city has $74 million in cash that it planned to spend on wastewater improvement projects in the next two to three years.


Instead, it will use that money to pay off the department's total pension liability this year and take out $74 million in bonds this spring to make up the difference. That debt will have a lower interest rate and more stability than the pension debt, according to city staff.

The result: a savings of about $500,000 per year, or $10 million over time.

Phoenix is also exploring using this strategy with some of its other city departments.

A long-term solution to the city's pension woes? Certainly not. But is it a step in the right direction? The cash-strapped Phoenix City Council sure hopes so.
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