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  #21  
Old 01-04-2018, 11:24 AM
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Mary Pat Campbell
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CALIFORNIA


http://www.sacbee.com/opinion/califo...192645574.html

Quote:
Pension costs are threatening public services all over California. It has to stop.
Spoiler:
California is great at making pension promises, but a dismal failure at properly funding them. The most recent annual report released by the California Public Employees’ Retirement System shows that, as of June 2016, CalPERS was more than $138 billion in debt. The teachers’ retirement system (CalSTRS) is nearly as bad, with $96 billion in debt. Even with a couple of really good years in the stock market, pension debts have grown.

The California system of overpromising and underfunding is failing taxpayers, public employees and retirees and wreaking havoc on California’s finances, including those of cities like Sacramento. And the giant CalPERS and CalSTRS pension debts ensure more of the same for decades to come.

AS GOVERNMENT CONTRIBUTIONS TO CALPERS AND CALSTRS SOAR, POLICYMAKERS PULL FUNDS FROM IMPORTANT PUBLIC SERVICES SUCH AS EDUCATION, PUBLIC SAFETY AND TRANSPORTATION TO COVER THE PENSION COST INCREASES.

The first pension domino fell in 1999, when the state Legislature granted retroactive pension benefits without paying for them. Since then, many factors have contributed to the pension debt, including chronic underfunding and relying on the stock market with unrealistic assumptions for investment returns. Quite simply, California has relied on kicking the can down the road for someone else to deal with at a later time.


These falling dominoes have taken CalPERS from a surplus of $33 billion in 1999 to a pension debt of more than $138 billion in just 17 years. CalSTRS also had a surplus in 1999. The debt numbers got worse in 2017, but won’t be published officially until next year.

The local picture is not much better, according to data released through Stanford University in October. Funded in part by a nonprofit that advocates pension reform and conducted by Joe Nation, a former Democratic assemblyman who is now with the Stanford Institute for Economic Policy Research, the study found that the city of Sacramento has more than doubled its contribution to CalPERS in the past nine years, going from $42.4 million in 2008 to $88.2 million in 2017. Sacramento’s pension costs are expected to reach about $150 million by 2022.

So what does this cost taxpayers? A lot. As government contributions to CalPERS and CalSTRS soar, policymakers pull funds from important public services such as education, public safety and transportation to cover the pension cost increases. According to Nation, Sacramento’s higher pension contributions have likely reduced the city’s share of expenditures on police, transportation, neighborhood services, and convention and cultural services. By 2029, city pension expenditures will likely crowd out an additional $53 billion, requiring more taxpayer services to go on the chopping block.

Crowd-out isn’t unique to Sacramento – it’s happening throughout all of California as cities, counties and school systems must shift funding from other services and programs to cover pension costs. Local governments have a responsibility to provide essential services that protect the safety, health, welfare and quality of life for their citizens. These services will continue to be reduced as pension debt and pension payments skyrocket.

Taxpayers aren’t the only losers. Public employees and retirees, too, have drawn the short end of the stick. Pity the workers and retirees from Loyalton and the East San Gabriel Valley Human Services Consortium who lost a large chunk of their pensions when their employers couldn’t keep up with CalPERS’ bills. That can and will happen again as growing pension costs threaten the solvency of public employers, putting at risk the retirement hopes of many workers and retirees.

How many more billion-dollar dominoes are going to fall before California takes action to repair the fiscal damage caused by too many years of overpromising pension benefits to government employees and underfunding our obligations to pension plans? Enough is enough. California’s taxpayers and public workers deserve better.

FORMER SAN JOSE MAYOR CHUCK REED CHAIRS THE RETIREMENT SECURITY INITIATIVE, A NATIONAL, BIPARTISAN ADVOCACY GROUP FOR PENSION REFORM; CHUCKREED@AOL.COM.



CALSTRS
http://www.dailyrepublic.com/solano-...-analyst-says/

Quote:
State can’t ignore crushing pension burden, former analyst says

Spoiler:
FAIRFIELD — A Sacramento man, who contended he was fired for questioning spiking pensions and sued the California State Teachers Retirement Association, says the state can dismiss the rights of whistleblowers, but can no longer ignore crushing pension burdens.

Scott Thompson, who worked as a pension analyst for the retirement association, commented about a state appellate court ruling Tuesday upholding the Yolo County Superior Court dismissal of his wrongful termination case.

He said Wednesday that California courts have ruled he would not get his day in court because he did not check all the boxes on his way to the starting line.


The state’s 3rd Appellate Court ruled Thompson was required to exhaust administrative remedies before filing the case after his 2011 termination.

Thompson argued that he was excused from doing so based on the “futility exception” of that requirement.

But the state appellate court said such relief is a very narrow exception available only when an administrative agency predetermined its ruling in a particular case.

Thompson said state lawmakers amended whistleblower protection law in 2013 to remove the exhaustion requirement. However the law took effect on Jan. 2, 2014, and his suit was filed a few months before the legislative change, he said.

“While justice was long-delayed and ultimately denied in my case, it will likely have the distinction of being the final time this happens in the history of California,” he said.


A spokeswoman for the state teacher retirement system said Wednesday that the decision speaks for itself and the agency had no comment.

Thompson, in an interview with the Labor Video Project that is posted on YouTube, has said he noticed a $110,000 raise for a school administrator in San Mateo County that would double the pension for the 57-year-old administrator.

Thompson said, “My job is to protect the taxpayers of California.”


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  #22  
Old 01-04-2018, 01:33 PM
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ATLANTA, GEORGIA

http://www.myajc.com/news/local-govt...vRjl6b7UmaryN/

Quote:
Atlanta pension boards sue city over merger
Spoiler:
The new year has brought a civil war between the city of Atlanta and two of its three pension boards.
Boards for police officers and general employees sued the city, former Mayor Kasim Reed and newly minted mayor Keisha Lance Bottoms last week for pushing through a consolidation, which was approved by city council on Dec. 13.

The pension board for city firefighters has not joined the lawsuit, which says the city “hastily” approved the merger in violation of state law and the city charter. It claims the consolidation will improperly give the mayor power to appoint a majority of pension board trustees who oversee about $3 billion in investments.

The suit also challenges the city’s decision to allow up to 288 employees to buy back into the city’s defined benefits pension program — a move that could increase the pension system’s unfunded liability by up to $30 million, or more than $104,000 per person.

Robert Highsmith, Reed’s personal attorney who also handles some city legal issues, wrote a Jan. 2 letter threatening to pursue sanctions against pension board members and their outside legal counsel under the state’s abusive litigation statute if the lawsuit proceeds.

“We are notifying you that the city and Mayor Bottoms intend to assert a claim … against you, your law firm, and any other person who takes an active part in the initiation, continuation, or procurement of these proceedings if the lawsuit is not dismissed within 30 days of your receipt of this letter,” Highsmith’s letter says.

Related
Atlanta council votes to consolidate city pension boards Atlanta council votes to consolidate city pension boards
Atlanta pension liability up $30M under new plan for officials, staff Atlanta pension liability up $30M under new plan for officials, staff
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Former Atlanta pension adviser suspended and fined by SEC Former Atlanta pension adviser suspended and fined by SEC
City council to vote on plan to merge Atlanta’s three pension boards City council to vote on plan to merge Atlanta’s three pension boards
Highsmith’s letter also says the pension boards “are not a legal entity or body politic with the capacity to sue or be sued.” The city will also go after board members “for … breaches of their fiduciary obligations to the city and its citizens,” the letter says.

Peter Chan, one of the attorneys representing the pension boards, called Highsmith’s letter “a classic intimidation tactic.”

“They’re saying: `We’re going to seek sanction because we disagree with your legal position,’” Chan said in an interview with The Atlanta Journal-Constitution. “It is an overdone litigation move that is consistent with the city’s campaign of intimidation and harassment” leading up to passage of the consolidation.

“To this date, we have not heard any substantive response to our core legal arguments, other than threats.”

The lawsuit seeks temporary and permanent injunctions against implementation of the merger, and allowing the employees to rejoin the defined benefits pension system.

Without the injunction, “the boards of the city employee pension funds will cease to exist as entities and will lose the ability to oversee and direct the investment activities of their respective funds,” the lawsuit says.

Highsmith’s letter says the Georgia Supreme Court has ruled that the city can “modify … existing retirement or pension systems.”

“The costs to defend your frivolous and groundless lawsuit should not be paid from finite pension funds or taxed to the citizens of the city, and the mayor and city have a fiduciary obligation to those citizens to recoup those costs and other damages from you and your law firm if they are incurred,” Highsmith’s letter says.

Chan, the pension board attorney, said the city’s legal analysis is “flawed.”

“This attempt to take over all three pensions is against state law,” Chan said. “It is state law that set up three separate boards, and you can’t use city law to usurp state law.”


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Old 01-04-2018, 01:33 PM
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HOUSTON, TEXAS

https://www.ai-cio.com/news/houston-...igation-bonds/

Quote:
Houston Issues $1 Billion in Pension Obligation Bonds
Spoiler:
The city of Houston has issued $1.01 billion in pension obligation bonds toward its pension reform package, known as the Houston Pension Solution, which will immediately reduce the city’s $8.2 billion in unfunded liabilities through future benefit reductions.

With the bond issuance, “the city upholds its promises to its pension systems and residents, and drastically improves its financial trajectory,” said Houston City Controller Chris Brown in a statement. “Houston residents can rest easier today knowing that meaningful pension reform is finally in place.”

Houston’s pension reform plan received support from Houston City Council, the Texas Legislature, and Houston voters, who voted for the issuance of pension obligation bonds in November.

“The city’s all-in True Interest Cost (TIC) for this issuance came in at 3.965411% – significantly lower than we initially anticipated,” said Brown. “This represents significant cost savings, and demonstrates investor confidence in this plan’s impact on the City of Houston’s bottom line.”

Of the $1.01 billion in bonds, $750 million in liquidity will go to the Houston Police Officers Pension System (HPOS), and $250 million will go into the Houston Municipal Employees Pension System (HMEPS). Brown said the liquidity shores up the more than $1 billion in deferred payments to the pension systems, and was critical to the systems’ buy-in of the city’s pension reform plan.

The Houston Pension Solution plan, which was passed in May, moves to a 30-year closed-loop amortization schedule, and uses a 7% assumed rate of return on investments. The plan prohibits the city from deferring payments to the systems. The 7% discount rate is balanced by the implementation of a risk sharing mechanism known as the “risk-sharing corridor,” which caps the city’s contribution rate and sets boundaries for its pension costs. The corridor is intended to protect the city, while ensuring that it upholds its financial promises to its employees.

The plan was supported by two of the three pension systems, labor organizations representing city employees, and more than 40 CEOs and Houston-area business leaders who signed a letter of support. However, the plan was opposed by the Houston Firefighters’ Relief and Retirement Fund, which complained that the final proposal had removed three amendments that had been supported by the firefighters’ pension, but opposed by the mayor’s office. The removed amendments would have given the firefighters more time to negotiate, and would have protected retired firefighters from being subjected to benefits reductions.



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Old 01-04-2018, 01:36 PM
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PONTIAC, ILLINOIS

http://www.pontiacdailyleader.com/ne...-in-good-shape

Quote:
Pensions appear in good shape

Spoiler:
The Pontiac City Council’s first meeting of 2018 Monday night was a medley of topics. The public body received reports from the police and fire pension boards, heard an update about the city’s surplus vehicles and approved a pricing structure for the Les Mills virtual fitness program soon to come to the Rec Center.
Joe Hassinger, president of the local firefighters pension board, updated the council with some good news: whereas the pension board’s assets sat at $4,366,148 on April 1, 2016, they had grown to $5,082,758 by the end of March this year, a net income of $716,610. A healthy $297,375 of that net income had come from investments alone. The 6.3 percent investment return this time around was a much more positive development than the 0.8 percent increase from the year before.
Mike Henson, the police pension board’s president, reported a similar increase in assets over the same timeframe of March 2016 to March 2017: $8.48 million to $8.88 million, or a 6.5 percent weighted investment return versus a return of 0.7 percent the prior year.
Since both boards met or exceeded the actual assumed percentage of investment return, City Administrator Bob Karls congratulated both boards’ members for the work they had done.


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Old 01-04-2018, 01:40 PM
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KENTUCKY

https://www.seattletimes.com/nation-...-pension-bill/
Quote:
GOP leaders sending mixed messages on pension bill

Spoiler:
FRANKFORT, Ky. (AP) — Key House Republicans in Kentucky sent mixed messages Wednesday as lawmakers work behind the scenes to craft a bill to overhaul one of the country’s worst-funded pension systems.

On the second day of the 2018 legislative session, House Speaker Pro Tem David Osborne told reporters he is hopeful a pension measure can be passed in the first two weeks of the session.


Osborne said fellow Republican Rep. Jerry Miller has been designated as the House’s point person on pension discussions. But Miller later said he hasn’t heard anything new about pension legislation since Christmas.

“I suspect there has been discussion at our leadership level, but I haven’t been privy to that,” Miller said. “I think our leadership has been quite distracted.”

The challenge of revamping the state’s public pension systems comes as the GOP-led House is embroiled in ongoing questions about who will be in charge as the chamber’s speaker. House Speaker Jeff Hoover has temporarily stepped aside amid an investigation of a sexual harassment settlement he and three other Republican lawmakers signed last year. He denied sexual harassment, but said he sent inappropriate but consensual text messages to a woman who once worked for the House Republican caucus.

Osborne is acting as speaker “until further notice,” leading to confusion about who’s in charge.

Senate President Robert Stivers acknowledged that the unresolved question of who will serve as House speaker is “somewhat slowing the process” on the pension bill.

The timing of a pension bill rollout remains uncertain. This year’s legislative session will last 60 working days stretching into the spring. Stivers said it’s possible the measure’s rollout could occur before Republican Gov. Matt Bevin presents his budget plan to lawmakers on Jan 16.

One factor in the timing of the unveiling is that Republican leaders are awaiting an actuarial analysis on how much draft pension proposals would cost taxpayers.

Bevin wanted to convene a special legislative session late last year to vote on a proposed pension overhaul, but his plan drew significant opposition from state workers.

State workers are owed billions of dollars in benefits over the next 30 years, but the government is at least $41 billion short, according to official estimates.

The plan proposed by Bevin and other GOP leaders last October would have eventually closed the pension system and replaced it with a 401(k)-style plan while capping benefits for current employees at 27 years of service and imposing a 3 percent pay cut.

Stivers, a Republican from Manchester, said Wednesday that the new pension bill will address concerns raised by state workers, and is a product of collaborative efforts.

“There are some things that have come from … differing perspectives that people have brought to us that will be incorporated in the final bill,” he said.

Stivers promised that the public will have “ample opportunity” to review and comment on the pension bill once it’s introduced.


http://www.ctpost.com/news/article/G...w-12467712.php

Quote:
GOP leaders say pensions, budget to overshadow session

Spoiler:
FRANKFORT, Ky. (AP) — First-day pomp quickly gave way to harsh realities for Kentucky's top Republican legislative leaders, who said Tuesday that tough work ahead on a new state budget and proposed fixes to underfunded public pension systems will overshadow this year's General Assembly session.

Senate President Robert Stivers told reporters he hopes a pension overhaul is offered "as soon as possible," but didn't give a specific timetable for action after lawmakers convened this year's session. Stivers promised "ample opportunity" for public review and comments on proposed legislation to repair one of the country's worst-funded public pension systems.

"It is tough," he said. "But this is what we're elected to do. We would love to have rainbows and puppy dogs every day, but the reality is the pension system started having problems 20 years ago with certain things that were not actuarially sound that people said were actuarially sound."

Republican Gov. Matt Bevin wanted to convene a special legislative session last year to vote on a proposed pension overhaul, but his plan drew significant opposition from state workers.

State workers are owed billions of dollars in benefits over the next 30 years, but the government is at least $41 billion short, according to official estimates.


The plan proposed by Bevin and other GOP leaders last October would have eventually closed the pension system and replaced it with a 401(k)-style plan while capping benefits for current employees at 27 years of service and imposing a 3 percent pay cut.

Senate GOP leaders said Tuesday that the pension issue needs to be tackled in coming weeks, but for now they're awaiting an actuarial analysis on how much draft proposals would cost taxpayers.

"I wish we had a bill today and we could pass it in five days, but we're just not prepared to release a bill until we have the (actuarial) score," Senate Majority Floor Leader Damon Thayer said.


House Speaker Pro Tem David Osborne said Tuesday that lawmakers also were awaiting feedback from officials at the retirement systems regarding some language in the draft proposals.

"The process will dictate the timeline," he told reporters. "The plan is to move as quickly as we possibly can once we have all the information we have available."

Republicans have overwhelming majorities in the House and Senate.

A pension overhaul looms as a key part of the equation when lawmakers face their most essential task — writing the state's next two-year operating budget.

"I think that's why we need to deal with it to know what our budget will look like, knowing the contributions from our General Fund that will have to be designated to deal with our pension obligations," Stivers said.

It will be the first time Republicans will have complete control of how Kentucky spends the public's money since the GOP took control of the House after the 2016 elections.

Bevin has said the budget "won't be pretty," as lawmakers look for money to spend on the struggling pension system. Thayer said Tuesday the budget work will be "extremely difficult."

"We're going to have to make cuts, no matter what," Thayer said in an interview. "If we don't get a pension bill passed, the cuts are going to be very deep. If we can get a pension bill passed, there will be cuts but it's likely that they won't be as bad."

Public school advocates voiced their concerns about a potential pension overhaul and other issues affecting education at a Capitol rally shortly after lawmakers convened Tuesday.

Tiffany Dunn, a teacher in Jefferson County, said she's a Republican but disagrees with the direction the GOP-led legislature is leading public education. She criticized a state law allowing public charter schools and worries about pension changes and potential budget cuts to education.

"The type of conservatism going on right now in Frankfort is not the type of conservatism that I want to be a part of," she said.

The Senate's opening day of 2018 had a celebratory mood. Republican Sen. Jimmy Higdon was formally voted in as the Senate's president pro tem.


http://www.wdrb.com/story/37174564/p...neral-assembly

Quote:
Pensions, budget and House leadership highlight opening of 2018 Ky. General Assembly

Spoiler:
FRANKFORT, Ky. (WDRB) -- The 2018 session of Kentucky's General Assembly began on Tuesday in Frankfort.

The pension crisis, the lean state budget, and who will lead in the State House are on the agenda.

House Speaker Jeff Hoover resigned his post in November, after he admitted to settling a sexual harassment claim. But technically, Hoover cannot resign until the House is in session. In fact his name is still on the Speakers podium, and there are some lawmakers who want him to remain.

But House Majority Whip Kevin Bratcher believes Hoover will officially resign and leadership will take care of itself.

"Our Pro Tem, David Osborne, will be the guy with the speaker's hammer. And he'll be running the show until further notice," said Bratcher.

Once the leadership issue is settled, lawmakers must tackle the issue of pension reform. The governor's pension plan is being revamped, but the new version has not been released. The pension issue will factor in budget talks. Lawmakers will need to find at least $1 billion dollars to fund the badly underfunded pension system.

Bratcher said, "It's not just a matter of money in the pension system. It's a matter of the way its structured. I mean, when it was first started years ago, it was dozens of workers taking care of one employee. Today it's almost a one-to-one ratio, and that's just about unsustainable."

Louisville Republican Representative Jason Names said, "I think it's only right and fair to have it open for everyone to see and comment on for a couple weeks. So I think probably, hopefully, we're ready the end of January.

And for the first time in history, a Republican legislature and Republican Governor will write that budget.

The session runs through mid-April.


http://www.kentucky.com/opinion/edit...192615564.html

Quote:
Legislators: Don’t fall for ‘reforms’ that make Ky., retirees poorer

Spoiler:
Sometime soon, presumably, Gov. Matt Bevin and his party’s legislative leaders will unveil Pension Reform 2.0.

It has, like Reform 1.0, been written in secret, but lawmakers must commit to fully vetting this version and resist any effort to rush it through.

There’s too much at stake, for all Kentuckians. The state, cities and counties are on the hook for billions to make up for the shortfalls in several public pension systems. If there is no new revenue — either from a massive upswing in the economy or expanded taxes or a combination — virtually every public service is in line for severe cuts.

As serious as this is, Bevin has pushed the panic button rather than seek reasoned approaches, including increasing revenues. He’s stoking the sense of crisis to justify abandoning traditional pensions in favor of individual retirement accounts that will leave most poorer at the end of their working years.


Lawmakers must not allow themselves to be manipulated into enacting “solutions” that will leave Kentucky and Kentuckians poorer.

Panic is rarely a useful tool for addressing complex public problem. Solving this crisis requires rigorous analysis, thoughtful long-term planning, a commitment to accountability and transparency, and more money.

Legislators must keep in mind:

▪ Not all public pension systems are in the same boat. The largest system — Kentucky Employees Retirement, non-hazardous — is drastically underfunded, with only 13.6 percent of the money it’s expected to need. The County Employees Retirement Systems, non-hazardous (which also covers many city and town employees), however is 52.8 percent funded, and the Teachers Retirement System is 56.4 percent funded.

▪ Transitioning new employees away from pensions with guaranteed benefits to individual retirement accounts will make the problem worse. Here’s why: Pension systems need a constant inflow of cash to pay out benefits. In healthy plans that comes from payments by current employees and their employers. With that cash flow, the investments can grow, providing a solid cushion against market downturns. If new employees are moved out of pensions and no longer pay in, there will be less cash to pay retirees, leaving the government to make up the difference, and damaging the ability to invest for the long term.

▪ The “level dollar” approach to paying down the liability proposed in the first reform bill unnecessarily punishes state and local budgets. Here’s why: The idea is to agree on a number a pension is underfunded, then agree on a number of years to make up the shortfall and make equal dollar contributions each year. Kentucky currently uses the more common approach of contributions based on a percent of total wages. This approach allows contributions to grow as wages grow. Imposing payments today at the same dollar amount as for 15 and 20 years in the future burdens current budgets of governments and public institutions unnecessarily.

▪ Pensions make more sense than mutual or index funds because they spread risk over more people and years. When people pool resources under professional management for long periods of time they get better, safer returns with lower management costs than individuals can achieve on their own.

▪ Finally, retirees are taxpayers and citizens who use services. Transitioning to systems that will make them poorer in the future will only place more demands on public services, stress families and reduce tax revenues.


http://www.state-journal.com/2018/01...ative-session/
Quote:
Pension rallies mark start of legislative session

Spoiler:
Some protesters will rally until Frankfort freezes over and then some.

Temperatures in the teens couldn’t stop a handful of current and former state government employees from gathering Tuesday night in front of the Capitol to protest draft pension reform legislation.

Carrying a toy pitchfork, David Smith, executive director of the Kentucky Association of State Employees, told the group that he is advocating the introduction of a temporary 5 percent “fee” on every transaction in Kentucky, unless legislators can come up with another viable way to fund public pensions. He is also pushing for a 15 percent fee on “luxury” transactions.

Protesters chanted “find the funding” and “where’s the bill?” in response.

Among the protesters was Kentucky Public Retirees President Larry Totten. The Frankfort resident said cutting state government is not the way for Kentucky to climb out of an unfunded liabilities hole measured in the tens of billions of dollars. Instead, tax reform is the solution, he said.

Fellow protester Gary Adkins, an attorney in the Public Protection Cabinet, echoed Totten’s desire to increase tax revenue, suggesting the state consider casino gambling and marijuana legalization to generate funds.

Earlier in the day, public school teachers gathered in the Capitol rotunda to protest education reforms, including the advent of charter schools in Kentucky last year, as well as proposed changes to their pension system.

Protester Claire Batt, a former teacher at Lexington’s Tates Creek Elementary, said fears about possible pension reforms forced her to retire mid-school year in October despite Gov. Matt Bevin’s promises that such legislation would not come with an emergency clause and thus not take immediate effect.

“I didn’t believe it,” said Batt. “I don’t trust legislators to follow it.”

At the public education rally, Secretary of State Alison Lundergan Grimes, Kentucky’s chief elections official, credited protests by teachers with delaying a special session on pension reform and urged teachers to run for office this year. The filing deadline is Jan. 30.

U.S. Rep. John Yarmuth, D-Ky., also attended the rally before filing for re-election at Grimes’ office. He described charter schools as “unproven methodologies” and as the turning over of governmental functions to for-profit institutions before saying he was committed to “working with” educators.


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Old 01-04-2018, 01:43 PM
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KENTUCKY

http://www.kentucky.com/news/politic...192608029.html
Quote:
It’s 2018, and there’s no sign of a pension overhaul bill in Frankfort

Spoiler:
The first day of Kentucky’s 2018 General Assembly came and went Tuesday, and no bill to overhaul Kentucky’s pension system was presented, and there was no definite word about when one will emerge.

For months, Kentucky political leaders have talked about legislation to fix the state’s financially strapped public pension systems, with Gov. Matt Bevin repeatedly promising to hold a special lawmaking session in 2017 to address the issue. But with that deadline blown and the legislature’s regular 60-workday session underway, it’s not clear whether Republican lawmakers can reach consensus on the politically explosive issue.

“I’m not surprised,” Jim Carroll, president of the advocacy group Kentucky Government Retirees, said Tuesday about the lack of action on pension legislation. “The reform process has been opaque and closely controlled by just a few people. This is in stark contrast to the 2013 pension reform effort, which was relatively transparent, deliberate and bipartisan.”


Carroll said he has an open records request pending for an actuarial analysis of the original draft pension bill that was supposed to have been presented to the Kentucky Retirement Systems board in early November.

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Senate President Robert Stivers, R-Manchester, said he hopes that lawmakers will get a pension bill soon, but he quickly added, “That depends upon the process.”

He said lawmakers will need to see an actuarial analysis of any revised pension bill.

But before much can happen, the first step is “the respective chambers getting themselves and their leaderships established,” Stivers said.

That was a polite way of referring to the Republican-led House, where Speaker Jeff Hoover is reconsidering his November pledge to resign after acknowledging that he and three other Republican lawmakers had secretly settled a legislative staffer’s claim of sexual harassment.

Instead of stepping down from his leadership post, Hoover said he has instead authorized Speaker Pro Tempore David Osborne, R-Prospect, to preside over the House until an ethics investigation is concluded.

For now, Stivers said, he will work with Osborne, R-Prospect.

He said the state’s pension problems don’t have to be solved before lawmakers craft a two-year state budget, but he warned that “it will mean a draconian budget without it.”

Bevin is scheduled to present his budget proposal Jan. 16 during a joint session of the legislature. Stivers said he doesn’t know whether a pension bill will be ready for discussion by that date.

The Senate leader also said the public will have ample opportunity to review any pension overhaul plan before any legislative vote is taken.

He said the issue is “tough, but this is what we are elected to do.”

“We would love to have rainbows and puppy dogs every day, but the reality is the pension system started having problems 20 years ago.”

At a teachers rally Tuesday in the Capitol Rotunda, Secretary of State Alison Lundergan Grimes said the slow pace of pension reform was due to teachers’ strong opposition to portions of Bevin’s proposal, which would shift new hires into 401(k)-style investment plans, freeze cost of living increases for retirees for five years, and require public employees to contribute an additional three percent of their salary to retiree health plans.

Bevin attributed the lack of a special session in 2017 to the turmoil in the House, but Grimes disagreed.

“There was no special session because 1,000 teachers were on the front steps of the Capitol,” Grimes said, referring to a previous teachers rally in early November.

Grimes also said lawmakers should carefully consider their stance on pension reform given that the filing deadline for this year’s election candidates is January 30. All 100 state House seats are up for election and half of the Senate’s 38 seats.

Jack Brammer: 502-1198, @BGPolitics

Kentucky Gov. Matt Bevin watched as Senate President Robert Stivers, R-London, announced a plan for an overhaul of Kentucky’s pension systems last fall in Frankfort.

http://www.wdrb.com/story/37176436/s...during-session

Quote:
School group wants districts to send workers to Capitol during session


Spoiler:
FRANKFORT, Ky. (WDRB) -- An education-focused group asked Tuesday for school districts to send employees to the Capitol during this year's legislative session as a voice for those who will be affected by pension reform, budget cuts and other issues that touch classrooms throughout Kentucky.

More than 50 gathered at the Capitol rotunda for a rally sponsored by Save Our Schools Kentucky, which laid out its "3-4-5" proposal in hopes that school districts across the state will send employees to Frankfort as the General Assembly meets.

Lawmakers are poised this year to consider a pension reform plan that would move toward 401(k)-style defined-contribution plans and draft a budget with many needs, most notably increased pension contributions, but not enough projected revenue.

As envisioned in the "3-4-5" plan, three employees from elementary schools would be sent to the Capitol from school districts, with middle schools responsible for four workers and high schools responsible for five.

Gay Adelmann, acting president of Save Our Schools Kentucky, said the group came up with the idea after school superintendents proposed that districts cancel a day of classes so teachers and other workers could lobby against pension changes during a special session that never materialized last year.

She said having a daily presence at the Capitol would provide "an in-person reminder" for lawmakers as they consider not just pension reform during the legislative session, but also a budget in which some areas that had previously been shielded from cuts, such as state funding for school districts, might not be so fortunate in the upcoming two-year budget.

"The pension and all these cuts are that important that we need a steady presence from every district across the state lining our halls, wearing black and holding signs, making sure that as legislators walk from their offices to the chamber, they reminded that we are watching, and we will be voting in November according to how they vote in this session," Adelmann said after the rally.

After speaking with Senate President Pro Tem Jimmy Higdon earlier Tuesday about what to expect in a pension reform bill, Adelmann said she was still dismayed to hear that lawmakers would look to shift public workers to defined-contribution pensions and stop the practice of allowing employees to accumulate sick time for their retirement payouts.

"I think we're going to see that pension bill in the next week," Adelmann said.

Lucy Waterbury, Save Our Schools Kentucky's vice president of legislative response, called bills passed during last year legislative session, namely one allowing public charter schools in Kentucky, and other issues on the horizon this year evidence of "a war on public education" here.

She said further budget cuts could push school districts into fiscal situations similar to those seen in the days before the sweeping Kentucky Education Reform Act was passed in 1990.

"Folks, we are headed down the path to pre-KERA days, so we better figure out how to fix it," Waterbury said.

"This is not a zero-sum game," she added. "It should never be when we're talking about children."

Waterbury also criticized another proposal, which hasn't been filed, that would offer tax credits for parents who home school their children or send them to private schools.

Tiffany Dunn, who teaches English as a second language in Louisville, grew emotional as she said she hoped her daughter graduates from public school before the state's education system is unrecognizable.

Dunn said she's been a teacher for nine years and a former supporter of school choice, but her interest in advocating for public education was piqued five years ago as she started work at a school with more than 90 percent of its students on free or reduced lunch.

That experience sparked her belief that schools themselves weren't failing, but rather "Frankfort was."

"One in four children living below the poverty line should anger people, not the public school system and not the teachers," said Dunn, who identified herself as a Republican. "... This is a political issue, but this is not a partisan issue. These are our kids, and the type of conservatism going on right now in Frankfort is not the type of conservatism I want to be a part of."


http://mycn2.com/politics/thayer-bel...-on-in-session
Quote:
Thayer believes that pension reform a must early on in session

Spoiler:
FRANKFORT – Senate Majority Floor Leader Damon Thayer, R-Georgetown, feels that the General Assembly must get a pension reform bill together as soon as possible.

Thayer, who supported Gov. Matt Bevin’s original plan, believes that both the House and Senate will come together and says that a proposed bill is currently being carefully studied.

“We need as strong of a pension bill as possible to take the taxpayers off the hook for the long term risk for new employees and we need to look at making changes outside the inviolable contract that have been noted by folks over at the KTRS and agreed to by the KTRS,” Thayer said. “Those items are on the table for immediate savings that we can use as we craft a budget.”



Thayer acknowledges that there will be a number of tweaks to the original proposal, but says that some things must remain in place for the legislation to be effective in dealing with the crisis.

“We still need to make changes outside the inviolable contract for those who are currently in the system,” Thayer said. “The biggest change is all new employees after July 1, need to go into a 401 (a) style plan.”



Thayer believes that it is imperative for the General Assembly to pass a pension bill before even thinking about addressing the budget, since the budget will be based on what is decided on pensions.

“I hate to be the beater of bad news but it’s going to be an ugly budget if we don’t get this pension bill passed,” Thayer said. “It’s still not going to be pretty, but the cuts will be lessened if we get a pension bill passed with significant savings starting in the next biennium.”
https://www.ai-cio.com/news/kentucky...-led-krs-woes/
Quote:
Kentucky Group Sues Funds, Alleges ‘Black Box’ Investing Led to KRS Woes
Plaintiffs allege the retirement system should have stayed with more vanilla index investments.



Spoiler:
A group, including pensioners from the Kentucky Retirement System (KRS) and Kentucky taxpayers, is suing Blackstone, KKR, and other alternative investment funds for failing to produce returns as advertised. The class action is being led by Michelle Ciccarelli Lerach, a litigation attorney. The lawsuit also includes complaints against several former state pension officials.

In the complaint, plaintiffs allege that the retirement system should have stayed with more vanilla index investments, and that by going into “black box” alternative strategies, pension officials effectively made the retirement system insolvent. The plaintiffs also argue that the fund of funds structure led to excessive fees and sweetheart deals involving investment managers and pension officials.

“The claims are baseless,” wrote Matt Anderson, a spokesman for Blackstone, in a statement emailed to CIO. “The Blackstone fund referenced in the complaint delivered to the Kentucky Employees Retirement System positive returns outperforming relevant benchmarks.”

Defendants in the suit include several advisors to the pension, former pension officials, Blackstone founder Stephen Schwarzman, KKR Co-founders Henry Kravis and George Roberts, and the CEOs of Prisma Capital Partners and PAAMCO.

The defendants have argued that they are not in the wrong and that no one was swindled. Cara Major, a spokesperson for KKR, told CIO, “We take our fiduciary duty very seriously and believe that the allegations about our firm are meritless, misplaced, and misleading.”

While no investment comes with a guaranteed return, the complaint argues that the pension ignored its fiduciary duty by investing in fund-of-funds vehicles that were opaque and include many layers of fees. KRS has a long-term 7.75% return target to meet its pension obligations. Plaintiffs argue that between 2011-2016, the pension’s absolute return allocation underperformed significantly and detracted from the pension’s overall return. KRS allocated $1.2 billion to its absolute return portfolio in 2011-2016. In late 2016, the pension approved a plan to unwind its absolute return portfolio. The pension portfolio failed to meet its return targets throughout the period outlined in the complaint.

Kentucky’s retirement system is one of the worst-funded in the nation. The pension has hovered around 30% funded status for several years. The pension system has been chronically underfunded by the state legislature, and pension trustees have also approved a run of bad investments over the past decade. The state Attorney General is already involved with a lawsuit against Gov. Matt Bevin for his reorganization of the KRS Board of Trustees. Additional legal action could be forthcoming as Bevin has indicated that pension reform is on his legislative agenda for 2018.

The Governor has called on Kentucky’s municipalities to start making larger contributions to cover the funding gap, a move which is already drawing considerable pushback as city officials cite shoestring budgets and low tax revenues. As highlighted in

The Richmond Register, many state workers have also opted to retire if they were eligible in order to lock in a certain level of benefits as the Governor examines considerably pared-down pension plans for new employees and considers benefit cuts for those already in the pension system.


http://www.the-messenger.com/news/lo...0107c6b5b.html
Quote:
City in good financial shape, but pension costs loom


Spoiler:
The city of Madisonville is in good financial condition, according to its auditor, but the city faces challenges with increasing pension obligations down the road.

Charlie Kington, of the Berry Kington & Utley PSC accounting firm, told the City Council at its meeting Tuesday that as of the close of the last fiscal year on June 30, 2017, the city is "strong" financial condition.

While the general fund balance declined slightly to $5.9 million, year-end cash reserves of $4.4 million gave the city a cushion of 84 days of operations, just six days shy of the recommended 90. The report found general fund expenditures of $19.5 million against revenue of $15.4 million; the balance being made up with money from the electric fund.


However, Kington said the city is facing a large increase in contributions to the County Employees Retirement System, which is the pension system most city workers belong to. In the current fiscal year, which began July 1, 2017, the city is paying $3.2 million into the system. Kington said the required contribution will increase 49.33 percent with the fiscal year beginning July 1, 2018.

The city will have to cut "expenditures or employment or increase revenues" in the budget year beginning July 1, 2019, Kington said. The increase this year can be covered by reserves he said, but that option goes away the following year.

The council accepted the audit but did not comment on its findings.


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Old 01-04-2018, 01:45 PM
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OHIO

http://perspective.opers.org/index.p...es-tax-reform/
Quote:
OPERS eyes tax reform
Pension fund works to keep changes out of legislation

Spoiler:
By Chris Collins, Ohio Public Employees Retirement System

Jan. 4, 2018 – For the past couple of months, it seemed like we couldn’t even turn on the radio or television without hearing something about “federal tax reform.”

Questions continue about how the final package will impact individuals across the economic spectrum, but there was one provision of the Tax Cuts and Jobs Act that was of particular interest to OPERS. This provision would have subjected tax-exempt public retirement systems to the unrelated business income tax.

This change, had it been included, would have impacted our investments in asset classes such as private equity, real estate and securities lending, and resulted in additional administrative costs. We would have had to assess and report the new tax, and restructure many of our investments to account for the tax. OPERS maintains significant investments in the affected asset classes, and as a result, this tax could have detrimentally impacted our mission to provide secure retirement benefits to our members.

Because we’ve already made or contemplated benefit changes in recent years in order to improve our financial situation, we urged members of the Ohio congressional delegation to oppose this new tax on state and local retirement plans. We are especially grateful to Ohio Congressmen Pat Tiberi (R-Westerville) and Jim Renacci (R-Wadsworth), who serve on the House Committee on Ways & Means and were very responsive to our concerns. Additionally, a special thanks goes out to Sen. Rob Portman (R-Cincinnati), who served on the conference committee that assembled the final bill and also helped ensure the tax provision was not part of the final package.

OPERS, like other public retirement systems, is under continual pressure to meet its actuarial assumptions, including investment returns, member longevity and wage growth. Despite the current historic bull market, we must prudently plan for the future by periodically revisiting our benefit structure to ensure we remain strong.

At best, subjecting public plans to a new tax would have resulted in a drag on investment returns, thereby reducing the likelihood that these plans would achieve their assumed investment returns. The tax would have affected OPERS’ investment decisions moving forward and would have made it more difficult to provide secure benefits to the families who depend on us.

The conference report representing the compromise version of the tax bill passed both the House and Senate in mid-December and will be signed by the President in early January. Some of the bill’s provisions will begin at the start of 2018, while others won’t take effect until 2019 and beyond.


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Old 01-07-2018, 09:41 AM
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https://www.plansponsor.com/public-p...-underfunding/

Quote:
Public Pension Fund Members Largely Unaware of Underfunding
Public pension fund members surveyed expressed interest in more transparency about pension fund investments and investment returns.


Spoiler:


Although U.S. equities delivered record-setting performance in 2017, the majority of U.S. public pension plans are underfunded, according to a survey by Spectrem Group.

The survey found that 48% of public pension plan members say they are relying on their pension for at least half of their retirement income. Ninety-two percent of members say their pension fund’s ability to generate returns at or above the fund’s target level is important or very important. Among California Public Employees Retirement System (CalPERS) members, this rises to 96%.

Ninety-three percent of members say it is important or very important that their pension generates returns at or above market level. Among CalPERS members, this is 97%.

Ninety-five percent believe the fund’s ability to effectively manage risk is important or very important.

However, only 56% of those surveyed think they are very well or moderately informed about their investment return. Likewise, only 54% think they are informed about their target return. Sixty percent think they are knowledgeable about the expenses and fees that they pay, and only slightly more, 61%, think they are up to speed on their pension plan’s benefit structure. They are less confident in their knowledge of the costs associated with shareholder activism, the composition and investing experience of the fund’s board and the amount of time spent by fund managers reviewing and voting on shareholder proposals.

Forty percent think their funds have performed in line with the market for the past few years, which Spectrem contends is not always the case. Among NYC Funds, 46% of members have this misconception, and among CalPERS members, the percentage is 42%.

Only 31% of members think their pension is underfunded when, in fact, all of their pensions are underfunded at least to some degree, according to Spectrem. Eighty percent of NYC Funds think their pension is fully funded, but it is only 68% funded.

The survey also suggests public pension fud members are also unaware of how their pension plan’s portfolio is invested. For example, while 20% of CalPERS assets are in high-risk alternative investments, only 14% of the plan’s members think that more than 10% of the fund is invested in such assets.

When asked about fund management, 75% of members think the No. 1 priority should be maximizing returns and getting the pension fully funded. Only 14% want their fund’s managers to make advancing social and political causes the priority.

Spectrem conducted the online survey in November. The full report can be downloaded here.


https://spectrem.com/Content_Whitepa...-pensions.aspx
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Old 01-07-2018, 09:44 AM
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KENTUCKY

http://www.dailyindependent.com/news...73c6b5aa7.html

Quote:
Pension obligations weigh heavily on city

Spoiler:
ASHLAND The Ashland commission is bracing for a massive wave to hit the city this year.

It’s expected to come in the form of an estimated $1.9 million increase in pension contributions to the state.

Kentucky’s retirement systems are considered severely underfunded – to the point Gov. Matt Bevin and other officials label it a crisis – and the state is calling on local governments to contribute more funding.

The city already pays a hefty annual price to the County Employees Retirement System. Last fiscal year, the city made combined payments of $3.3-million for hazardous and non-hazardous employees.

“We’re going to do everything we can to meet whatever the new obligations end up being,” said Mayor Steve Gilmore. “But when you’re hit with something of this magnitude, it’s difficult for a town like us."

Commissioner Amanda Clark said she expects the commission’s top priority will be preparing for increased pension obligations between now and July 1 when the new fiscal year begins.

“I wish we had a crystal ball to know exactly what our obligation will be. Right now, we just have projections, and those projections are pretty steep,” said Clark. “We’re going to have to look very carefully at where we’re allocating our resources.”

Commissioner Marty Gute said it will be imperative for the city commissioners to work cohesively.

“We need to all be on the same page. I think that’s the big key to our success in the coming year when we take a hard look at our expenses,” said Gute.

Commissioner Matt Perkins also said the commission must analyze its spending even more closely than it did a year ago.

“I’m opposed to raising taxes and fees. What we need to do is cut our spending in order to operate frugally,” said Perkins.

The second-year commissioner said he feels the city is “being held accountable for the state’s misdeeds on the promise to fund” public pensions.

“And that’s really frustrating, because we’re now all scrambling to find out where we’re going to get this money from,” said Perkins.

Possible funding sources

The commission, like all surrounding local governments, is hopeful the rise of Braidy Industries, which plans to build a $1.3-billion aluminum mill and hire 550 permanent workers by 2020, will accelerate economic development in the city and produce new tax revenue.

The officials are also hopeful the new Marriott Delta hotel set to take the place of the Ashland Plaza Hotel by, potentially, the end of the year, will also spur growth downtown.

But if the developments don’t materialize as quickly as city officials hope, they will likely need to find ways to pay the new pension obligations this year.

Most of the officials said the goal is to refrain from tapping into the city’s fund balance, also known as its reserve, that now amounts to nearly $6 million.

Gilmore said discussions have already begun with City Manager Michael Graese and the finance department on how the city can better position itself financially.

“There are certain things we can do from a personnel cost standpoint,” said Gilmore.

The municipality is one of the largest employers in the county with about 300 workers. And personnel costs account for nearly half of the city’s $49 million budget this fiscal year.

Gilmore suggested the possibility of reducing the workforce through attrition.

“We have several retirements coming this spring that I already know about. There are jobs in the city that are necessary, but once people in other certain jobs retire, we can look at freezing new hires,” he said, adding that layoffs would be a last resort move.

Perkins said he does not see the need for anybody to be laid off or fired, and agreed that attrition could be the city’s best bet

If the city chooses the reduction through attrition route, it will have to ensure it’s still providing the quality of services residents need, said the mayor and commissioners.

“The way we have to look at is, if we don’t have this position, how will it affect the city?” said Gute.

One of the city’s most expensive services, the Ashland Bus System, fell under heavy scrutiny last summer during budget meetings.

This year’s budget allocated about $540,000 for the bus system, an increase of $120,000 from the previous year. The bus division, which also receives about $700,000 from the federal government annually in addition to local funding, ran out of money last March, three months before the fiscal year ended.

The city pointed to a drop in ridership, along with increases in payroll expenses since 2015, as the main reasons for the high costs.

In order to reverse the downward trend, the commission reclassified the bus system from public works back under the finance department, where Finance Director Tony Grubb and Assistant Finance Director Michelle Veach are supervising it.

“I know that Tony and Michelle are doing a fabulous job and have made great strides in reducing that deficit,” said Clark. “But I’m still not really satisfied with how we’ve handled the bus system and if it’s being used sufficiently. We don’t have a Saturday bus. Do we need one? We send a bus to Russell, why? While I’m pleased with the progress, I think we’re just not there yet with that service.”

Another, larger expense for the city is its overtime costs. The city routinely spends more than $1 million in employee overtime, with nearly all of it allocated to the fire and police departments.

Graese said in a recent interview he began working with department heads to reduce overtime costs shortly after his tenure began in August.

Gilmore suggested the commission could mandate Graese must sign off on all overtime requests.

Perkins said he could be in favor of the idea. “We are a 24/7, seven days a week entity, and the city expects our water guys to have to be out past midnight to get our water back on,” said Perkins. “But we want to make sure there’s nothing excessive in terms of overtime costs. We don’t want anyone abusing their overtime, or milking the clock. Employees should know that’s not punitive, it’s an effort to make sure they and other workers have a retirement.”


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Old 01-08-2018, 07:56 PM
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UNITED STATES MILITARY

https://www.cnbc.com/2018/01/05/us-s...ment-plan.html

Quote:
Military personnel face a critical choice for their retirement plan
Changes to the system will impact millions of current and future service members.
The new retirement program combines a traditional pension with a defined contribution plan.
Financial education is key to the program's success.

Spoiler:
The U.S. military is a launching a new mission this year, one that aims to ensure more of those who serve are also saving for their financial future.

Pentagon officials are calling the move the biggest update to the military's pension and benefits since World War II. The dramatic changes to its retirement system will impact millions of current and future service members.

Military service has long brought with it a highly valued pension for members of the armed forces, who have made their careers in the U.S. Army, Air Force, Marines, Navy and Coast Guard.

Until this year, all military members could potentially receive a guaranteed pension of at least 50 percent of their base pay for life. But to earn it, they must serve for at least 20 years. Most never stay that long.

"Today people move from job to job and they need a retirement benefit that they can take with them," said Jeri Busch, director of military compensation policy for the U.S. Department of Defense.

Modernizing the system
Busch, who served for 22 years in the U.S. Navy, said the new retirement program will help jump start many members' long-term savings. She said it is also "a key step in recruiting and maintaining the talent we need to ensure military readiness."

The new retirement program — called the "Blended Retirement System" or "BRS" — combines a traditional pension with a defined contribution plan, similar to a private sector 401(k) plan. As of Jan. 1, service members entering the military will automatically be enrolled in the new BRS program.

Those who have served 12 years or more as of Dec. 31, 2017 will remain in the old legacy retirement plan, earning that guaranteed pension.

Facing a big decision
Meanwhile, about 1.6 million current active duty, Reserve and National Guard members have a big decision to make. By the end of this year, those who have served in the military less than 12 years must choose whether to opt into the BRS program, or remain in the legacy plan.

"I know the value of a dollar and see it is important to save up for the future."
-Zachary Beckman, Marine Corps reservist
Those who opt in will select how much money they'll contribute to the defined contribution plan, the federal government's Thrift Savings Plan (TSP), which has been offered to civilian government employees for decades.

Depending on how much they contribute to the TSP, they can begin receiving matching contributions of up to 5 percent of their pay right away. They'll also still be eligible for a pension under the new system, as long as they reach 20 years of service.

However, under the new system, the amount of the payout will be reduced by 20 percent. Pentagon officials say members are encouraged to make up the difference by making contributions to the TSP.

For members who join the military on or after Jan. 1, they will get an automatic 1 percent government contribution that will begin 60 days after enrollment. Government matching contributions to the TSP won't begin until after two years of service. That delay of TSP matching contributions doesn't impact those who joined the military before Jan. 1, 2018 and opt in.

Shifting responsibility
While "opting in" requires making a choice that will put more of the responsibility for long-term savings on the members' shoulders, "it starts to cause them to learn how to contribute to their future, their own retirement," said John Bird, senior vice president of military affairs at USAA, a financial services firm that works with about 12 million current and former members of the U.S. military and their families.

For some, it may be a tough decision.

"If you know for a fact you are going to serve for 20 years then you should stay with the legacy system," said Bird, a retired vice admiral with the U.S. Navy. However, more than 80 percent of military members leave the service before reaching that milestone.

U.S. service members walk off a helicopter on the runway at Camp Bost on September 11, 2017 in Helmand Province, Afghanistan.
Getty Images
U.S. service members walk off a helicopter on the runway at Camp Bost on September 11, 2017 in Helmand Province, Afghanistan.
Contributing regularly to a long-term savings account that they can take with them if they go to a new job is a valuable perk, even if their paycheck is a little less.

"My strong belief is if they get education and start right away contributing, they won't miss the money," Bird said.

Financial education is key
The military is requiring mandatory financial education training on bases and online. More than 80 percent of those who must make a decision have taken the class, according to Pentagon officials.

Yet some financial advisors worry one course may not be enough. A recent USAA survey of enlisted members found 41 percent admit to living paycheck-to-paycheck. That number was slightly higher for millennials.

Financial education "has to start in the boot camps," said Rene Bruer, a former Marine, who is now a financial advisor and co-CEO of Smith Bruer Advisors in Tallahassee, Florida.

"This has to be fully integrated into training," Bruer said. "Just as much as they teach you how to shoot a gun, they need to teach you how to manage your paycheck."

Cpl. Zachary Beckman, a 23-year-old government contractor who is also in the Marine Corps Reserves, has taken the required financial education training. He says opting into the new program is the right move for his financial future.

"Given my civilian job and having my Marine Corps experience, I know the value of a dollar and see it is important to save up for the future," Beckman said. "It's what is needed nowadays...It gives younger people who might not stay in the military the opportunity to get a retirement plan."


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