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  #931  
Old 06-13-2018, 06:12 AM
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KENTUCKY

http://www.kentucky.com/opinion/op-e...213057319.html

Quote:
AG Andy Beshear’s lawsuit threatens future of Kentucky teachers’ pensions

Spoiler:
Attorney General Andy Beshear is getting plenty of practice for his next campaign as he travels across the commonwealth to spread fear and misinformation about the new pension reform bill, designed to save Kentucky’s public pension system.

His most dangerous lies are those of omission. Beshear doesn’t want Kentuckians to know about the positive things Senate Bill 151 does to help ensure public pensions remain viable. For example, the law:

▪ Stops the practice of underfunding Kentucky Teachers Retirement System by requiring future governors and legislators to make the full actuarially required payments. This is in stark contrast to the old funding formula that allowed former Gov. Steve Beshear to fund only 40 percent of TRS’ request. His dereliction allowed Kentucky’s public pensions to become one of the worst-funded plans in America.

▪ Establishes a pathway for ensuring the unfunded liability will be paid off through a new funding formula called “level dollar funding.” Beginning July 1, 2020, this will result in annual contributions of $400 million more than the record $1.2 billion annually that Gov. Matt Bevin and the Republicans in the General Assembly placed in the state budget for TRS in the upcoming biennium.

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▪ Does not violate the inviolable contract of a single current or retired teacher, according to the testimony of the executive director of TRS. AG Beshear has effectively conceded this point in his lawsuit against the bill.

▪ Makes zero changes for retired teachers and changes so minimal to current teachers that Beshear has not directly challenged them in his lawsuit. In fact, it has less impact than a similar proposal supported by the Kentucky Education Association and the Kentucky Association of School Superintendents.

▪ Provides a better benefit under the new hybrid cash balance plan for new teachers than the current system. The teachers union’s own actuary admitted that “long service teachers may receive stronger benefits from the new CB [cash balance] plan.”

It is unfortunate that these facts seldom appear in Frankfort media coverage and are nowhere to be seen in most social-media discussions. But, it is no surprise that you haven’t heard this information from the attorney general. After all, the facts demonstrate that SB 151 will strengthen our pension system and promote its solvency for future generations.

If the lawsuit against SB 151 is successful, however, the opposite will be true. Without reform, every public employee in the state will be harmed, and irreparable damage will be done to countless others through an argument made in the lawsuit, which calls into question many of Kentucky’s most important laws.

The lawsuit argues that SB 151 should be invalidated because of the process by which the General Assembly passed the bill. If the court rules in favor of this argument, it could invalidate thousands of other bills where the same process was used, including House Bill 362, which provided relief for Kentucky cities and counties by phasing in CERS pension contributions over a 10-year period.

If HB 362 is nullified, it could force cities and counties across our state into financial distress and possibly bankruptcy. Beshear’s arguments would also strike down House Bill 265, passed this year to allow struggling coal counties to keep more of their coal-severance dollars.

Those are just a few examples from the 2018 legislative session. There are decades of laws on the books passed using the same procedure as SB 151. Does Beshear really want to open the floodgates and call into question bills like Senate Bill192, which his father signed into law in 2015 to battle the opioid crisis? Does he want to throw the doors of our jails open and release all of those who were arrested because of this law?

While the attorney general continues to champion a lawsuit that will create more problems and uncertainty for our state, there are a handful of people in Frankfort who truly want to fix the public pension crisis. Since day one, Bevin has passionately fought to fully fund the public pension system and ensure its sustainability. SB 151 is a significant step forward.

Judging by Andy Beshear’s behavior, one would think he doesn’t want this problem to get better.

Blake Brickman is chief of staff for Kentucky Gov. Matt Bevin.


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Old 06-13-2018, 06:18 AM
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MASSACHUSETTS

http://www.gazettenet.com/Former-sta...ciary-18132199

Quote:
Rosenberg files pension paperwork, names husband Bryon Hefner as beneficiary upon his death

Spoiler:
AMHERST — Former state senator Stanley Rosenberg filed retirement paperwork earlier this month and named his husband, Bryon Hefner, as the beneficiary of his annual pension after his death.

Rosenberg, 68, of Amherst, held publicly funded jobs for 38 years and five months, according to his retirement papers, including administrative positions at the University of Massachusetts Amherst, and as a member of the state House of Representatives and Senate.

Based on his length of employment and highest earning salary years, he could be eligible to receive around $84,420 annually, according to an analysis by the Boston Globe. Before he resigned as Senate president in December, Rosenberg earned $142,548 annually.

Under a joint survivor allowance, Hefner could stand to receive as much as $58,260 per year in taxpayer-funded pension benefits after Rosenberg’s death, according to the Globe analysis. As beneficiary, Hefner would receive two-thirds of Rosenberg’s annual pension after his death, for the remainder of Hefner’s life, even if he is convicted of a crime.

According to state guidelines on retirement benefits, under a joint survivor analysis Rosenberg will receive approximately 7 percent to 15 percent less in annual benefits than he would without designating a beneficiary. However, the guidelines state that the reduction could be greater depending on the age difference between the retiree and beneficiary.


In his June 6 retirement filing, Rosenberg lists himself as married and designates his spouse, name redacted, to receive his pension after his death. The board has 90 days to process the paperwork.

Rosenberg stepped down from the Senate presidency after the Boston Globe reported that Hefner, 30, allegedly had sexually assaulted several men and bragged that he had influence over Senate business. The two have been together since 2008 and married since 2016.


In a December press conference, Rosenberg said he was “shocked and devastated” by the sexual misconduct allegations against Hefner, who he said would soon begin treatment for alcohol dependence. In January, Rosenberg announced that he and Hefner were separated.

Hefner pleaded not guilty in April to five counts of sexual assault, four counts of distributing nude images without consent, and one count of criminal lewdness. At his arraignment in Suffolk Superior Court, Hefner’s attorney released a statement which referred to him as “Mr. Hefner Rosenberg,” although he had not previously been known to use that compound name.

A four-month independent ethics investigation concluded at the end of April that Rosenberg failed to protect the Senate from Hefner’s pattern of “disruptive, volatile and abusive” behavior and that he gave Hefner “unfettered access” to his Senate email.

In May, Rosenberg’s staff confirmed that he and Hefner were separated. Rosenberg declined to comment on the charges against Hefner during the ethics investigation and could not be reached for comment Tuesday about his retirement paperwork.

Following the release of the ethics report in early May, Rosenberg resigned from the Hampshire, Franklin and Worcester Senate seat he had held since 1991.


https://www.bostonmagazine.com/news/...efner-pension/
Quote:
Bryon Hefner Could Receive a Hefty State Pension upon Stan Rosenberg’s Death
Hefner, who was accused of sexual harassment, is listed as the recipient of his husband's benefits should Rosenberg pass away.


Spoiler:
Bryon Hefner’s pockets could someday be lined with tens of thousands of dollars in state pension money.

Hefner, who pleaded not guilty in April to sexual assault charges, is set to receive annual benefits from Massachusetts in the event of the death of his husband, former Senate President Stan Rosenberg. According to the Boston Globe, Rosenberg, who resigned from the legislature in May, designated Hefner as the recipient of his pension in the case of his death in an application filed with the State Retirement Board last week.

Rosenberg, who spent nearly 40 years in public service, will receive roughly $84,420 a year from the state, according to the Globe. Should he pass away, Hefner could receive around $58,260 annually, the Globe reports.

Allegations that Hefner had sexually harassed and assaulted several men surfaced in November. Accusers told the Globe that they hesitated to come forward for fear of retribution from Hefner and his powerful husband. Hefner was indicted on five counts of indecent assault and battery, one count of lewdness, and four counts of distributing photos without consent in March.

Though Rosenberg was not found to have violated any Senate rules in relation to Hefner’s behavior, a damning report released in May found he had “failed to protect the Senate from his husband, whom he knew was disruptive, volatile, and abusive.” He resigned soon after the report’s release under pressure from colleagues in both parties.

Hefner’s trial is scheduled next year.


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  #933  
Old 06-13-2018, 07:48 AM
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CALIFORNIA

SAN JOAQUIN COUNTY
http://www.recordnet.com/news/201806...ps-budget-lean
Quote:
County’s pension liability keeps budget lean

Spoiler:
STOCKTON — Presenting what she described as a “very tight budget,” San Joaquin County Administrator Monica Nino publicly released a $1.75 billion spending plan Tuesday morning for the coming fiscal year that is not much larger than the county’s ominous $1.5 billion unfunded pension liability.

“We have more folks retiring, more folks drawing on retirement funds than people who are putting into it,” Nino told the Board of Supervisors, referring to the pension burden. “There is an imbalance.”

Speaking after Tuesday’s meeting, Nino acknowledged that the huge pension liability is a “large part” of the reason for the cautiousness of the county’s proposed budget.


“We need to remain flexible,” she said. “Any growth in the budget will have to go toward funding the pension system. I’m focused on keeping the budget structurally balanced.”


Nino said the $1.5 billion pension figure is as of Dec. 31, 2017, with the next updated figure to be calculated on the final day of 2018. She added that once the proposed 2018-19 budget is passed — which presumably will occur at the Supervisors’ meeting on June 26 — the county will have set aside $31.1 million in the past 18 months.

The county’s proposed 2018-19 fiscal-year budget, which will take effect July 1, is $112.7 million larger than the current, soon-to-expire spending plan.

Following are some of the budget highlights.

The Twin Tunnels fight

The proposed budget directs $730,000 toward the county’s ongoing effort to defeat Gov. Jerry Brown’s Twin Tunnels project. Expected expenses included legal fees, advocacy, responses to proposed legislation and public communication.

Parks are hurting

The county’s parks and recreation staffing would shrink under the proposed budget, from 59.5 positions to 45.5 positions, nearly 25 percent.

“Our park system is in crisis,” Mary Fuhs, a county park commissioner, told Supervisors. “The turnover of (Micke Grove) zoo managers and park administrators in the past six years is a clear red flag that those positions are being given a near impossible or entirely impossible task to care for our parks properly.”


Cannabis costs

Officials estimate that new ordinances regulating commercial cannabis cultivation and sales in unincorporated parts of San Joaquin County, as well as rules governing personal marijuana cultivation, will cost the county $7.2 million in 2018-19.

The proposed budget does not include funding for that cost, but the Board of Supervisors has put a cannabis business tax on the Nov. 6 ballot.

Some funding winners

Health Services is in line for an increase of nearly $100 million, to $745.7 million. The proposed budget for roads and facilities is $103.2 million, an increase of nearly $18 million. And the environmental protection budget may increase by $1.1 million, to $18 million. The proposed budget for law and justice is $346.1 million, an increase of $19.9 million. Of that sum, $2 million is for the establishment of the county’s new Medical Examiner’s Office.

Overdue downturn

Nino said the nation’s economic prosperity in recent years will not continue forever.

“We are keenly aware that a projected national recession may be looming and are making preparations to face the challenges still ahead of us,” she said.

The likelihood of an economic downturn, Nino said, coupled with the already existing pension liability, means the county must continue budgeting carefully.


go to the link to see some hideous 3D pie charts
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Old 06-13-2018, 07:49 AM
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FORT WORTH, TEXAS

https://www.nbcdfw.com/news/local/Fo...485320351.html

Quote:
Fort Worth City Council Clears Way for Potential Changes to Employee Pension Fund

Spoiler:
Fort Worth City Council cleared the way Tuesday night to allow some potentially major changes to the pension fund for city employees. The changes could even affect employees who have already retired.

There were no final decisions made. What the council did was essentially warn the board that oversees the city employees' retirement fund that change may be coming. They have to do that at least 90 days before voting on a plan.

A task force has been working with the city manager on recommendations to keep the pension fund solvent. Right now, it's expected to run out of money between 2040 and 2050.

The city is considering increasing the minimum retirement age when current and future employees can start drawing a pension, and eliminating accumulated sick leave as a means of extending an employee’s years of service.

Officer Snatches Up Runaway Toddler From Traffic[NATL] Officer Snatches Up Runaway Toddler From Traffic
A Naperville police officer was caught on cam dashing out from his cruiser to stop a runaway toddler darting through traffic.(Published Tuesday, June 12, 2018)
But the most controversial idea would eliminate, or reduce a two-percent cost-of-living increase that existing retirees get every year through their pension. Retirees at Tuesday night’s council meeting said that's significant.

"We've got retirees who helped pull the city through the 2007 crisis who took furloughs, who went six years without raises so every penny counts," said Marsha Anderson, President of the Fort Worth Coalition of Retired Employees. “It doesn’t seem morally right. We did our jobs. We made our commitments. We met our end of the bargain and it’s like I said earlier tonight, we have to sleep with one eye open now to see what’s going to be taken away next.”

"Previous administrations here in the city of Fort Worth have always said a promise made is a promise kept,” said retired Fort Worth firefighter Jim Tate. “We're not going to take anything away from you that was already promised to you once you're retired. That's why I want to see what this administration is going to say. Are they going to keep that up?"

North Texas City Poised for Robot Delivery Testing
The city has reduced employee benefits in the past and increased taxpayer contributions to the pension fund but it wasn't enough to make up a major shortfall.

City Council is set to hear final recommendations in August.


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Old 06-13-2018, 07:49 AM
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NEW YORK CITY

https://www.silive.com/news/2018/06/..._the_rise.html
Quote:
As city worker OT surges, so does pressure on pension costs

Spoiler:
CITY HALL -- The city's generous payroll and benefits system continues to draw fire for exorbitant overtime and often unchecked disability pensions.

In 2016, 76,166 rank-and-file city employees pocketed more than $100,000 mostly thanks to $1.3 billion in overtime charges, according to payroll data analyzed by OpenTheBooks.com.

That year, the watchdog group found city employees worked 33 million hours of overtime costing a whopping $1.9 billion. And of the top 100 city employees paid in overtime, more than half of that pay was higher than their base salary, the data showed.

The data also showed the Police and Fire Departments billed 58 percent of all overtime, or nearly $1.1 billion, while 90 other agencies dished out $795 million.

"Hard working taxpayers are upset when they find out that every dime collected by the New York City income tax goes to pay the 76,000 highly compensated city employees who make more than $100,000 per year," said Adam Andrzejewski, the founder and CEO of OpenTheBooks.com. "When city employees can make more in overtime than they do in salary, then the pay and benefit systems are being abused."

Not just overtime, but the city's disability benefits have been questioned too.

Last month, State Sen. Marty Golden, who receives an NYPD disability pension and was paid more than $1 million in tax-free pension money since he was injured on the job in 1983, was spotted having a blast skydiving, the Daily News reported.

The paper has also uncovered retired cops receiving disability pensions running marathons, as well as taking up new careers, like bodybuilding.

With pensions costs slated to reach $10 billion annually, an expense that represents about 11 percent of the city's total budget and about 35 percent of the city's payroll, according to a report from the Manhattan Institute -- what kind of checks and balances does the city have in place to ensure city employees are not abusing overtime and pension payouts?

The sheer number of the city's employees, coupled with generous pension benefits, especially for those in the uniformed services, and the fact that overtime pay can be included in the calculation of an employee's final average salary, are some of the main factors driving up the cost of the pension system, said Maria Doulis, the vice president of the nonpartisan Citizens Budget Commission.

JUMPS IN PENSION CONTRIBUTIONS

Mayor Bill de Blasio's latest executive budget includes $9.8 billion in pension contributions for fiscal year 2019 -- a 2.3 percent rise from his previous budget. From fiscal year 2018 to 2022 the mayor's budget anticipates a 7.6 percent jump in what the city contributes to pensions, spending $10.3 billion on pensions in 2022.

"[The pension system's] already increased to a degree that would have been considered astounding and unimaginable if you would have told people this circa 2000 that we would be paying $10 billion a year to the pension fund in New York City, which is almost 10 times what it was then," said Edmund J. McMahon, an adjunct fellow at the Manhattan Institute and research director of the Empire Center for Public Policy.

"It will remain sustainable at the expense of everything else, there's no choice but to sustain it," he continued.

WHO'S CHECKING WHEN IT COMES TO OT?

According to the city, agencies are responsible for authorizing employee's overtime work and most civilian employees have a cash overtime cap.

Although pension calculations vary by plan, those benefits are calculated as a percentage based on the length of service multiplied by an average salary, typically three to five years.

Cash overtime earnings count as part of an employee's base salary to calculate benefits and can increase an employee's pension within limits set by the pension plan, the city said.

There are also restrictions to prevent employees from spiking their overtime in the last year to increase their pension, but Doulis pointed out that overtime is often given out by seniority in the last few years before retirement.

Doulis said often times senior police officers, firefighters, and corrections officers work a tremendous amount of overtime to increase their final average salary to lock in higher a pension.

"Every day New Yorkers see the results of the hard work done by our dedicated public servants, including police officers, teachers and firefighters," a City Hall spokesperson said. "Occasionally, overtime is necessary to face unplanned events or meet critical operational need. We take our fiscal responsibility seriously and are constantly monitoring its use citywide."

The city also said that a waiver of employee cash overtime caps must be pre-approved by the Office of Management and Budget and the Office of Labor Relations, and that it has also set caps on city-funded uniformed overtime for FDNY, NYPD, and the Department of Correction.

DISABILITY

When it comes to proving a disability, whether or not someone is eligible is determined by the individual pension systems. Each fund has an independent medical board that gives recommendations reviewed by the pension funds' board of trustees.

Based on 2015 and 2017 available data from the financial reports of the city's five pension funds, the top three funds with members on disability were the New York Employees' Retirement System -- the largest of the five pension systems -- the Police Pension Fund, and the Fire Pension Fund.

In 2017, 16,888 members of NYCERS, which represents civil servants, sanitation and correction employees, the MTA, NYCHA, Health and Hospitals, and appointed and elected officials, collected disability payouts. Some 10,515 FDNY employees collected disability payouts, and data from 2015 showed that 15,366 NYPD employees collected disability payouts.

"Disability pensions are paid out on a more generous basis than your typical service pension," CBC's Doulis said. "It increases the cost of pensions paid overall and the uniformed services in particular have higher rates of disability, which is part of the reason why pension benefits for those workers are more expensive overall."

For members of the Police Pension Fund, the fund can call a disability retiree back for a medical review once a year, however, once that retiree is eligible for service retirement, state law prohibits the fund from bringing the retiree in for reexamination, even if it may appear they are abusing the benefit.

"We are prohibited by law from bringing anybody back once they have more than 20 years," Police Pension Fund's General Counsel Nicole Giambarrese said. "They can't come back to work, it would kind of be a waste of time and money to pay a doctor to examine them ... absent the statute changing which is probably not likely."

The Fire Pension Fund has a similar system to the Police Pension Fund Giambarrese said, but the fund could not be reached for comment.

With the NYCERS, the fund said that upon the request of its medical board, a disability pensioner who is under the minimum age or service requirement for retirement may be required once a year to undergo a medical exam to determine if they can work.

Doulis said disability payouts raise the overall cost of the pension system in the long run.


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Old 06-13-2018, 04:47 PM
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NEW HAVEN, CONNECTICUT

https://www.newhavenindependent.org/...deficit_yale_/

Quote:
Pension Budget Raided To Plug Deficit
Spoiler:
The city plans to fill a $14 million projected deficit this fiscal year with money originally budgeted for underfunded pensions, and with an extra $2.5 million from Yale University.

City Controller Daryl Jones shared that news with the alders on the Finance Committee on Monday night at a meeting in the Aldermanic Chambers on the second floor of City Hall.

Just two weeks ago the full Board of Alders voted to approve an amended version of Mayor Harp’s $547.1 million general operating budget, preserving the mayor’s 11 percent tax increase, for the fiscal year that starts on July 1. On Monday night, the Finance Committee refocused its attention on the projected deficit for the current fiscal year ending June 30, after months of meetings, hearings and deliberations largely dedicated to next year’s budget.

Revenue Or Expenditure Issue?

Finance Committee Alders Dolores Colon and Adam Marchand.
According to the city budget department’s latest monthly financial report, published on May 25 and covering city finances through the end of April, the city projects a budget deficit of $14.07 million by the end of the current fiscal year, which closes at the end of the June.

The biggest drivers of the deficit on the expenditure side include overages in Fire Department salary and overtime, which add up to a projected $4.9 million in deficit for the department; overages in Police Department overtime, which, when mitigated by salary savings, add up to a projected deficit of $1.02 million for the department; and the Board of Education (BOE)’s projected deficit of $6.9 million.

During the Finance Committee hearing, Jones stressed that the city has a revenue problem, not a spending problem. He said the city did not find out until October 2017, when the state legislature finally passed its biennium budget nearly four months after the beginning of the current fiscal year, that it would be around $5 million short in expected revenue from Hartford.

That revenue loss came primarily from cuts to Payment in Lieu of Taxes (PILOT) of around $4 million for college and hospital reimbursements and around another $1 million for state property reimbursements.

State law says that, depending on available funds, the state can reimburse up to 77 cents on the dollar for property tax revenue that Connecticut cities and towns lose out on due to the local presence of tax-exempt non-profits. The state has no legal obligation to fund PILOT, though city legislators tend to fight for as high a funding as possible in order to make up for lost property tax revenue.

PILOT currently pays out closer to 41 cents on the dollar. Around 54 percent of New Haven property is owned by tax-exempt non-profits.

“It’s very important to put that in context,” Jones said about the state budget cuts to the two PILOT programs. “It’s very challenging for a city to make that revenue up in the middle of a fiscal year.”

The majority of the city’s revenue shortfall, however, comes from the mayor’s Revenue Initiative line item, which was budgeted to bring in $18.6 million this year. Starting with the August 2017 monthly financial report, published on September 28 of last year, that line item’s projected income has been $0.

The current fiscal year’s budget describes that $18.6 million Revenue Initiative line item as “premised on receiving additional State aid or revenue from other sources such as an increase in voluntary payments.” The Revenue Initiative for next year’s budget has been reduced to $6.1 million.

“The issue is a revenue issue,” he said. “Not an expenditure issue.”

He pointed out that next year’s general fund budget is only slated to increase by $8.1 million, or 1.52 percent, over last year’s final approved budget.


East Rock Alder Anna Festa.

“I disagree,” said East Rock Alder Anna Festa. “We definitely have a spending problem in this city.”

She and Hill Alder Dave Reyes and West River Alder and Boards of Alders President Tyisha Walker-Myers zeroed in on the projected deficits in police and fire overtime as particular causes for concern.

“That’s crazy,” Reyes said about the Fire Department’s projected $2.7 million overtime deficit and projected $2.3 million salary deficit. He said he had never seen fire deficit numbers that high.

Walker-Myers and Festa stressed the importance of the police and fire chiefs coming before the Board of Alders to get approval on overtime costs that push the annual overtime line item above $1 million for each department. They said that stipulation had been included in a policy amendment in the current year’s budget, but, to date, neither the police chief nor the fire chief had come before the board to get overtime approval.

Jones said the chiefs had not appeared before the alders in previous months to discuss overtime due to scheduling snafus. He also said that all overtime allocation details are run by Quinnipiac Meadows Alder and Public Safety Committee Chair Gerald Antunes.

Balancing Bad Options

Jones.
Jones told the alders that the city’s primary plan for filling this year’s projected $14 million deficit is to pull funds from a pool of money initially budgeted to be put into the city’s two underfunded pensions, the Police and Fire Fund (P&F) and the City Employees Retirement Fund (CERF).

Jones said that towards the beginning of the fiscal year, back in July or August, the budget department put aside $16 million from the budgeted $61 million pension line item to keep on hand in case the city were to experience any cash flow issues due to the delayed passage of the state budget.

The city still has that $16 million on hand, Jones said, and plans to tap into it to cover whatever remains of the projected deficit come June 30. He said the city has also issued strict suppression control measures, limiting new hires and overtime approval to public safety departments only.

The current fiscal year’s budget allocated $34.6 million to P&F, $21.6 million to CERF, and $4.7 million to FICA and Medicare. According to the April monthly financial report, the city has thus far this year paid out 71 percent of its budgeted pension contributions: $24.8 million into P&F, $15.2 million into CERF, and $3.3 million into FICA and Medicare.

The budget that the alders approved two weeks ago flat-funds the pension line item at $61 million next fiscal year.

Jones said the annual budgeted contributions to P&F and CERF correspond to “annual recommended contributions” (ARCs), which are set by actuaries hired by the city to review its public pensions and which work towards fully funding the city’s pensions over the course of two decades.

P&F and CERF represent around $900 million in combined liabilities, according to the city’s independent Financial Review and Audit Commission (FRAC). As of 2016, P&F was funded at around 40 percent; CERF was funded at just above 30 percent.

Westville Alder and Finance Committee Co-Chair Adam Marchand asked about the potential negative consequences of taking up to $16 million out of the city’s budgeted pension contributions.

“They’re far less than if we don’t balance the general fund,” Jones replied. He said the most likely consequences are that the two city pensions’ funding ratios will get worse because of the corresponding increase to their unfunded liabilities. He said actuaries will likely recommend that the city increase its annual pension contributions above the current budgeted amount to make up for this year’s pension budget deficit. He said the city can spread out, or amortize, that increase over the course of 20 years, so that the pain of having to pay more into the pension fund will not be felt all at once.

“There’s more of a likelihood of being downgraded [by a credit ratings agency] if you don’t balance your general fund,” he said. A downgrading from a credit agency like Standard and Poor or Fitch would almost certainly result in New Haven paying higher interest rates whenever it goes out to borrow money.

Marchand asked if the alders should look into increasing its budgeted pension contributions for next year based on the likely pension deficit for this year. Jones said he would recommend keeping the current $61 million budgeted pension line item the same.

The budget that the alders passed two weeks ago also includes a policy amendment that calls for the creation of a pension task force to investigate the challenges and best routes forward for adequately funding the city’s two public pensions.

One of the most contentious proposals from the mayor’s original budget recommended borrowing $250 million to shore up the city’s pensions. The Finance Committee ultimately tabled that proposal, keeping it within committee for future consideration.

FRAC Chair Mohit Agrawal told the Independent that pulling $16 million from the pension budget would certainly result in higher ARC payments, and increases the overall riskiness of the city’s financial situation.

“But we need to close the books” on the current fiscal year, he said. “And money needs to be found. The city’s in a hard place.”

He said the city faces a conflict between short term and long term obligations. In the short term, it must find money to balance the general budget. In the long term, it must adequately fund its pensions, which represent nearly half of the city’s $2 billion in total liabilities.

He said FRAC still estimates that next year’s budget is at least $27 million out of balance, and that the city faces structural deficits that will not be remedied by finding pulling money from this year’s pension budget.

“We wouldn’t be surprised if the city finds itself in the same place next year,” he said.

Jones and Agrawal both said this is the first year in Mayor Harp’s five-year tenure that the administration will not be fully funding its ARC payments for the city’s pensions. Agrawal said that fact underscores the seriousness of this year’s budget troubles.

More Money From Yale

Gary Doyens.
Jones also told the alders that in early April Yale University committed to increase its annual voluntary contribution to the city by $2.5 million.

He said Yale currently gives the city around $8.6 million each year. That contribution will increase to just over $11 million in total, he said. That increase will be applied to the current fiscal year’s budget, he said, and will be put towards reducing the projected $14 million deficit.

Jones said that Yale, as it has done for the past decade, will submit the majority of its contribution to the city in August. Yale then pays another couple million dollars each year later in the fall to cover its use of city fire services.

The August money, however, is always backdated to help close deficits in the previous fiscal year’s budget.

“This is about as bad as it’s ever been,” said budget watchdog Gary Doyens during the public testimony section of the hearing. “That practice [of backdating Yale’s contributions] should stop if you’re going to get a real budget and understand a real deficit and adjudicate your expenses to your revenues. … Quit taking money and backdating it just because your auditor says you can.”

Jones said that process of backdating Yale money has been approved by the city’s auditors, RMS, and has been done for over a decade ever since the city first started receiving voluntary contributions from the university.

He said the city’s auditors ensure that all of the city’s financial practices follow Governmental Accounting Standards Board (GASB) standards. He said for the past four years the city has won the Government Finance Officers Association (GFOA) award for transparent financial reporting.

$10M In Debt Savings?
The Finance Committee also moved approval of the city’s request to transfer $10 million from the debt service line items and use that money towards reducing various departments’ deficits. Jones said that transfer was possible because of upwards of $20 million in savings that the city achieved in bond refinancing in August 2017.

FRAC’s Agrawal said the city should not identify that money as revenue, as the city should never expect to achieve savings from its debt.

“The city should not expect to get a free $10 million loan from Wall Street,” he said.

The Finance Committee recommended approval for Jones’ proposal to transfer $10 million from Debt Service to the following locations: $2.9 million for police overtime, $2.8 million for fire overtime, $2.9 million for fire salary, $450,000 for Youth Services, $250,000 for Public Safety Communications overtime, and $700,000 for other employee benefits and workers’ compensation.

Jones said this transfer will not reduce the projected $14 million for this fiscal year, as it has already been factored into the monthly financial report.
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Old 06-13-2018, 04:49 PM
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ILLINOIS
INTERCEPTION

http://www.wirepoints.com/imrf-pensi...ints-original/

Quote:
IMRF Enters The Pension Intercept Mess: Implications For Hundreds Of Illinois Towns And Cities - Wirepoints Original
Spoiler:
Add the Illinois Municipal Retirement Fund to the free-for-all grab on state money flowing to Illinois’ troubled towns and cities that’s now setting up. That money recently became subject to intercept by the state comptroller who then redirects the money to pensions. Based on data we obtained earlier under the Freedom of Information Act, over 600 Illinois towns and cities were underfunded on their IMRF obligations, at least to some extent, apparently putting them at risk of at least a partial intercept.

The unfortunate City of Harvey is again providing the illustration, but it’s not likely to be the last.

Harvey was the first to first to face that intercept and a court fight ensued between the city, bondholders, the police pension and the firefighters’ pension. Each wanted at least some of the state money. That money, which includes local share of sales tax and income tax, is often critical to providing essential services. Harvey initially responded by laying off about half of its firefighters.

A global settlement was reached among the claimants and the City of Harvey. As reported by The Bond Buyer yesterday, that settlement includes the city’s obligation to keep IMRF current.

Importantly, that requirement was included because the comptroller concluded that IMRF has intercept rights, just like the police and fire pensions, according to The Bond Buyer.

The implications are extensive because IMRF is huge and so many municipalities are delinquent on their obligations to it. It’s the second biggest Illinois pension by membership, covering over 400,000 municipal employees (other than teachers, police and firefighters) across the state other than those of Chicago and Cook County.

Each of the municipalities that participate as employers in IMRF has a separate account, of sorts, with it.

IMRF’s aggregate funding ratio is comparatively healthy, most recently reported at 93% (thanks to its unique rights to force funding in other ways).

However, that aggregate belies the reality that the vast majority of towns and cities have been underfunded in the accounts they maintain with IMRF for active workers. Retired workers, as IMRF accounts for things, are fully funded, but municipalities are often short on their obligation to fund their IMRF account for active workers.

The numbers we obtained are below and are from 2016, the most recent we could get. Note that these funding levels are for active workers only, and for towns and cities only (not other types of municipalities that also participate with IMRF).



615 towns and cities are underfunded to some degree. 278 have funding levels under 75% for active workers.

IMRF trustees, like local police and fire pension trustees, are no doubt thinking hard about whether their fiduciary duty to the pension requires them to request an intercept. Once a pension validly requests and intercept, the comptroller is legally obligated to effectuate it. The comptroller earlier indicated that first-to-ask wins in cases where multiple multiple pensions seek intercepts but there’s not enough to cover each.

Obviously, this is an awful mess. Pensioners, bondholders, taxpayers and service recipients face a free-for-all in fiscally troubled communities across Illinois. It’s a fight over some of the last meat on the bones.

We called IMRF for comment or elaboration but have not heard back.
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COLORADO

https://www.heartland.org/news-opini...pension-reform

Quote:
COLORADO ENACTS PENSION REFORM
JUNE 13, 2018
By Samantha Fillmore
The Colorado Legislature and Gov. John Hickenlooper enacted some reforms to the state’s public pension system.


Spoiler:
The Colorado Legislature and Gov. John Hickenlooper enacted some reforms to the state’s public pension system.

The new law will allow local government employees to join the state’s defined-contribution (DC) pension program, previously available only to state employees.

DC plans, similar to 401(k) pension plans enjoyed by workers in the private sector, provide for more predictable worker costs and enable employees to take their benefits with them when they move to other jobs in the public or private sector.

The new law also gradually increases the amount of money public-sector employees must contribute to the Colorado Public Employees' Retirement Association (PERA), from 8 percent to 11 percent. The law will phase in over the next two years.

Near-Doubling of Liabilities

Sheila Weinberg, founder and chief executive officer of Truth in Accounting and a policy advisor for The Heartland Institute, which publishes Budget & Tax News, says the state was quickly sinking under the weight of its pension system’s unfunded liabilities.

“Going from $28 billion in 2015 to $51 billion in 2016, Colorado couldn’t put this off any longer,” Weinberg said. “One of the reasons for this dramatic increase is actuaries started to use updated mortality schedules. In other words, they realized people were living longer.”

Fuzzy Math

Colorado state Rep. Lang Sias (R-Arvada) says false assumptions contributed to the breakdown of the system.

“Actuarial assumptions being very incorrect, along with over-assumptions on the rate of return, caused exponential increases in debt over time,” Sias said. “On top of that, PERA used to have a program where existing members were able to purchase additional years at discounted rates, causing billions of dollars in impact.”

Weinberg says the pension shortfalls would have imposed a big, unexpected cost on the public.

“What this means to taxpayers is that the actuaries expected the plan investments to earn less, so the taxpayers would have had to come up with extra money to fund benefits,” Weinberg said.

Overpromising and Underfunding

Colorado state Sen. Jack Tate (R-Centennial), sponsor of the reform legislation, Senate Bill 18, says PERA’s problems were a long time in the making.

“Fifteen years ago, a pattern started in Colorado, where more benefits were promised with a lack of money to back it up,” Tate said. “Other legislation since then has increased funding without redesigning programs, leaving us where we are today. We needed to structurally change our pension programs to essentially stop digging the hole while we’re trying to fill it.”

‘Long-Term Consequences’

Sias says decisive action was necessary to save the state’s pension system.

“The unfunded liability of Colorado is currently, at minimum, $32 billion dollars, which exceeds the entire state’s budget,” Sias said. “We currently have 550 to 600 participants in PERA. Not doing anything this year would have left PERA somewhere around 20 percent funded, as well as [caused] potential credit downgrades for the state. There really were long-term consequences for these decisions.”

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NEW YORK
DIVESTMENT

https://www.cityandstateny.com/artic...ion-funds.html

Quote:
Fossil fuel divestment would boost New York pension funds
Dirty energy stocks have a lousy future outlook.

Spoiler:
A recent commentary in City & State argued that if New York state Comptroller Thomas DiNapoli divests public employee pension funds from fossil fuel companies, it would be a dangerous politicization of his role. No factor besides investment performance should be considered when investing those funds, the argument goes.

But if rate of return is New York’s main concern, the state should be running away from fossil fuels – rather than maintaining investments in ExxonMobil, Chevron and other fossil fuel companies that are causing global warming. And protecting New York from climate change is also a valid concern for any statewide elected official.

One rule to wise investing is to look forward to assess future rate of returns, not backwards to past performance. Sure, investing in fossil fuels was a safe investment strategy over recent decades. But they have been underperforming compared to other stocks in recent years.

The global climate treaty negotiated in Paris in 2016, flawed and non-binding as it is, demonstrated unanimity among the world’s nations that we need to curtail and then eventually eliminate greenhouse gas emissions, including those from fossil fuels, if we are to keep global warming below 1.5 to 2.0 degrees Celsius. Virtually all the world’s nations endorsed a goal of reaching zero carbon emissions by the middle of this century. If they reach that goal, the long-term investment prospects of fossil fuels will be bad. To invest in fossil fuel companies, therefore, is to bet that the Paris Agreement won’t be fulfilled, which is a very risky position to take.

The threat of regulation aside, increasing competition from growing renewable energy sources such as wind and solar is diminishing fossil fuels’ market share and capital investment. That already has harmed fossil fuels’ stock performance. When the New York state Senate held a forum on divestment a few years ago, 350.org, an advocacy group combating climate change, hired an investment firm to calculate how the state pension fund would have fared if DiNapoli had divested when first requested. The answer was it would be worth an additional $5 billion. That number will grow in the future.

In December 2017, Tom Sanzillo, who served as interim state comptroller after Alan Hevesi was forced to resign, wrote in the Daily News calling upon pension funds to divest from fossil fuels in order to protect the value of their holdings. He noted that Norway’s $1 trillion sovereign wealth fund – derived largely from its North Sea oil and gas reserves – decided the month before to drop oil and gas stocks from its core benchmark stock portfolio. It was an acknowledgement that such holdings have lost their status as mainstream, blue-chip investments and now face the possibility of sudden price drops.

ExxonMobil, under investigation by the New York and Massachusetts attorneys general for misleading investors and the public about climate change, has underperformed in recent years. In 2017, the company missed both its revenue and earning projections, even though oil prices rose; it also missed production targets. The state pension fund has $1 billion invested in ExxonMobil.

According to climate scientists, to avoid catastrophic climate change, the world must ensure that 80 percent of the known fossil fuel reserves are never converted into greenhouse gas emissions. The right to extract most of those fossil fuels has already been purchased, however, by oil, gas and coal companies. Therefore, many fossil fuels will become stranded assets. In addition, an increasing number of governments, including New York City, are filing lawsuits against fossil fuel companies to make them pay for the enormous damages they have caused from the burning of fossil fuels. That does not bode well for their stock value.

While it is often argued that the comptroller’s fiduciary duty to manage the pension funds should be limited to maximizing the rate of return, prudent pension management must also take into account the broader risk of economic and market disruption posed by climate change. (The Obama administration issued a Labor Department ruling allowing for environmental considerations in management of pension funds, though the Trump administration disagrees.)

What good would an extra 1 percent rate of return mean if your city was flooded from rising sea levels? If your neighborhood was devastated from wildfires, if droughts destroyed the local food system, if hurricanes demolished your home? As a state with huge population centers along the coasts that were flooded during Superstorm Sandy, this is not an abstraction.

The comptroller’s role in the oversight of the state pension fund is not determined by the state constitution but rather by the state Legislature, which is considering legislation requiring divestment from fossil fuels. New York should adopt that law, but, even if it doesn’t, the comptroller should drop fossil fuel stocks, to protect our investments and our future.


Mark Dunlea
is an attorney who has helped coordinate efforts with 350.org to divest the New York City and New York state pension funds from fossil fuels, and is the Green Party candidate for state comptroller.

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KENTUCKY

https://www.courier-journal.com/stor...ers/695691002/
Quote:
State government workers retired in droves - not so much with teachers

Spoiler:
FRANKFORT, Ky. – During a period of uncertainty about potential changes to their pension benefits retirements surged among state and local government employees over the past 12 months.

But in comparison, Kentucky teachers did not see a rise in retirements.

Kentucky Retirement Systems reports that 8,445 state and local government employees will retire in the fiscal year that will end June 30 — an increase of 17.5 percent in the number of retirements over the previous fiscal year.

The spike is largely due to more state government workers retiring. The figures recently released by KRS show retirements of its members in its plans for state workers and state police during the year jumped by more than 32 percent. The number of retirements was up 10.5 percent for members of its plans for local government workers.

Read this: As angry teachers watch, legality of pension reform's passage argued

“Early on in past the year — particularly last August and September — there was a lot of uncertainty about what was going to happen…” said David Eager, executive director of KRS. “It was generally known there needed to be reform and people didn’t know what it was.”

Larry Totten, president of the advocacy group Kentucky Public Retirees, said, “I think people are just thinking that they need to go ahead and leave and get the benefits that exist now. That’s what we’ve seen through this past year. People say they want to lock in what they’ve got, they’re just afraid.”

Kentucky's other big retirement plan — Teachers’ Retirement System — did not experience a similar spike. Data released by TRS this week shows that the system expects 2,340 retirements in the fiscal year that will end June 30 — a number that is just 0.6 percent higher than the previous fiscal year and similar to the number of retirements over the previous six years.

Other news: Louisville is suing the state for forcing it to fund botanical gardens

Kentucky’s retirement plans combined report more than $43 billion in unfunded liabilities, but the Bevin administration says the problem is even worse.

Last year state government’s consultant, PFM Group, released a series of reports examining the reasons for the problem recommended options — including significant benefit cuts — to bring it under control.

Gov. Matt Bevin and top leaders of Republican majorities in the General Assembly recommended legislation last fall that embraced many of the group’s recommendations, but the furious opposition of teachers and public employees caused the proposal to be scaled back time and again.

At the end of the 2018 legislative session Republican majorities unveiled — and passed in a single day — a final reform plan that largely affects only future public employees with only modest changes in benefits of current teachers and employees.

The spike in KRS retirements means the struggling KRS must pay benefits for 1,259 more retirees now than it did a year ago — a problem Eager said is manageable under budgets proposed by Bevin and passed by lawmakers.

“It’s not that problematic in and of itself. It’ll cause some additional amount of benefit payments going forward, but a very small portion relative to the whole of what we pay. And administratively we’ll have about 1,200 retirements to process,” Eager said. “That’ll cause a strain but we’ll manage it.”

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But policies adopted by the KRS board and “painful decisions” by lawmakers to fund the pension plans mean that KRS’ situation is improving. “No doubt we have serious issues and require a substantial amount of funding over a long period of time… But we’re hopeful we’re going to move to a positive net cashflow — contributions are going to be greater than benefits paid — next year for the first time in more than 20 years.”

Totten suggested that state government employees are retiring in greater numbers than teachers or local government workers because state workers have been given across-the-board raises in only two of the past eight years, and there are no such raises for them in the new budget that extends to June 30, 2020.

From today: Louisville judge reprimanded over Facebook post about murder defendant

“I think the state workforce is just beaten down. They’re getting no increment (annual raise.) For the vast majority, their work is not being rewarded with more pay,” Totten said. “For many of them who are eligible to retire, sticking around another year or two won’t make much of a difference in their benefits.”

Jason Bailey, executive director of the Berea-based Kentucky Center for Economic Policy, agrees. “I expect the lack of raises and increased workload are a factor. Some parts of state government have been cut 20 to 50 percent over the last decade,” Bailey said, “And in the last year the private sector economy picked up some. Those private sector jobs that do give raises now and then.”

Beau Barnes, deputy executive secretary and general counsel for TRS, said some teachers may be more reluctant to retire than other public employees because of concern that upon retirement the only health insurance benefit guaranteed to a retired teacher is merely access to group coverage. “We believe the potential costs of health care in retirement are deterring a lot of teachers from retiring now…” Barnes said. “This is anecdotal, but captures the greatest number of comments we’re hearing.”


http://www.pionline.com/article/2018...nsurance-plans
Quote:
Kentucky revamps target asset allocations for pension funds, insurance plans

Spoiler:
Kentucky Retirement Systems, Frankfort, approved changes to the target asset allocations for its five pension funds and five insurance plans, which have $17.4 billion in assets combined, said David Eager, executive director.

The five pension and insurance plans are the Kentucky Employees Retirement System hazardous and non-hazardous pension and insurance plans, County Employees Retirement System hazardous and non-hazardous pension and insurance plans, and the State Police Retirement System pension and insurance plans.

The real estate target remained the same for all 10 plans at 5%, while the hedge funds/opportunistic target was reduced for all 10 plans to 3% from 10%, and the real-return target was increased for all 10 plans to 15% from 10%.

RELATED COVERAGE
Kentucky Retirement System earmarks $270 million, cuts hedge fund managersKentucky governor signs pension reform bill; state attorney general, 2 groups file lawsuitKentucky Retirement Systems taps Wilshire Consulting as investment consultant, invests $300 millionKentucky's pension obligations contribute to S&P credit rating downgrade
The private equity target — previously 10% for all 10 plans — was reduced to 7% for KERS non-hazardous and SPRS pension plans. It remains at 10% for the three other pension plans and five insurance plans.

U.S. and international equity targets — previously 17.5% each for all 10 plans — were reduced to 15.75% each for KERS non-hazardous and SPRS pension plans and bumped up to 18.75% each for the three other pension plans and five insurance plans.

The high-yield/credit fixed-income target was reduced to 15% for all 10 plans — down from 17% previously for KERS non-hazardous and SPRS pension plans and 24% for the three other pension plans and five insurance plans.

The core fixed-income target was bumped up to 20.5% from 10% for the KERS non-hazardous and SPRS pension plans and bumped up to 13.5% from 4% for the three other pension plans and five insurance plans.

The cash target remained at 3% for the KERS non-hazardous and SPRS pension plans and was reduced to 1% from 2% for the three other pension plans and insurance plans.

The asset allocation changes were recommended by KRS' investment consultant, Wilshire Consulting.

According to materials prepared for last week's board meeting, the new asset allocation is expected to raise the funds' liquidity profile and reduce expected volatility and sensitivity to economic growth.

Rich Robben, interim chief investment officer, could not immediately be reached for additional information on the changes.


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