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  #1781  
Old 12-28-2017, 10:17 PM
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Mary Pat Campbell
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RHODE ISLAND
http://wpri.com/2017/12/26/ri-pensio...o-5-3-billion/
Quote:
RI pension shortfall jumps 15% to $5.3 billion
Spoiler:
PROVIDENCE, R.I. (WPRI) – The shortfall in Rhode Island’s two largest state pension funds has jumped by 15% after officials adopted more conservative assumptions about future investment returns.

A new valuation by the state’s actuarial firm shows the combined unfunded liability in the funds for state employees and teachers was $5.3 billion as of June 30, up from $4.6 billion a year earlier under the old assumptions. Their funded ratios fell to 52.9% and 54.8%, respectively, from 56% and 58.3%.

The projected taxpayer contribution to the pension funds in 2019-20, the first budget year when the new assumptions will have an effect, will rise to about $465 million, up from $442 million in 2018-19. The funds cover benefits for more than 53,000 retirees and active workers.

Last May the State Retirement Board voted to reduce its forecast of how much the pension system’s investments will earn annually to 7% a year, down from the 7.5% forecast that had been in place since 2011. (The investments have earned an average of 7.1% a year since 1995.)

The actuarial firm, Gabriel Roeder Smith & Co., said that change as well as relatively weak earnings in some of the past few years were the main reasons for the increase in the shortfall.

The shortfall in the two pension funds is now expected to peak at $5.5 billion in the 2019-20 fiscal year, then gradually fall over subsequent years, according to the actuarial analysis. The state’s 2011 pension overhaul froze cost-of-living adjustments for retirees until the plans are 80% funded, which is expected to take another 10 years, the actuaries said.

General Treasurer Seth Magaziner, who oversees the pension system, last year announced he would significantly shrink the investments in hedge funds put in place by his predecessor, now-Gov. Gina Raimondo. Magaziner said last week the system had earned nearly 15% over the past year, bringing its total value to $8.34 billion.

“The health of Rhode Island’s pension fund is improving,” Magaziner, a first-term Democrat, said in a statement. “Over the past year, our Back to Basics approach of common-sense investing has been providing solid investment returns for our members.”

Among the roughly 10,000 retired Rhode Island teachers receiving a standard pension, the average beneficiary was a 72-year-old paid $44,565 a year, according to the actuaries. Among the roughly 9,000 retired state employees receiving a standard pension, the average beneficiary was a 74-year-old earning $32,127.

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  #1782  
Old 12-28-2017, 10:18 PM
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Mary Pat Campbell
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TEXAS
http://keranews.org/post/texas-urban...d-pension-woes
Quote:
In Texas' Urban Areas, Leaders Wrestled Property Taxes And Pension Woes
Spoiler:
City officials in Texas faced several challenges in 2017, from pension shortfalls that threatened their budgets to lawmakers who increasingly got involved in local matters.


And as Texans continued to face problems finding affordable homes, legislators failed to deliver on promises of property tax relief. Here's a look at some of the issues the state's urban areas faced this year:
……
4. Pension woes plagued big cities
While Texas mayors blasted plenty of legislation this year, leaders from Dallas and Houston sought lawmakers' help in shoring up massive shortfalls in pension funds that threatened to bankrupt city coffers or prompt massive service cuts.

Amid attempts to overhaul the complicated pension systems, tensions flared between legislators, city leaders and first responders — and raised questions about the future of pensions for public employees in the state. In the end, lawmakers overhauled the pension funds but concerns over the shortfalls still helped fuel a shortage of police officers in Dallas and Houston.
HOUSTON
PENSION OBLIGATION BOND
http://www.chron.com/news/politics/h...e-12450230.php
Quote:
Houston completes $1 billion pension bond sale, despite lawsuit
Spoiler:
The city of Houston completed the sale of $1 billion in voter-approved pension bonds Friday in New York and began delivering the proceeds to its police and municipal pension funds, cementing the pension reform package that has dominated Mayor Sylvester Turner's first two years in office.

A state district judge ruled Thursday the transaction could proceed despite a last-minute legal challenge to the Nov.7 election from a conservative critic of the deal who had said he wouldn't mind unraveling the reform package, which he views as an inadequate solution.

If the city had not delivered $750 million to its police fund and $250 million to its municipal fund by this spring, much of the $2.8 billion in benefit cuts at the heart of the reforms would have been rescinded.

"Today is an exciting day for the financial future of our city," said City Controller Chris Brown. "With today's issuance, the city upholds its promises to its pension systems and residents, and drastically improves its financial trajectory. Houston residents can rest easier today knowing that meaningful pension reform is finally in place."

Plaintiff and former city housing director James Noteware has alleged the ballot language underpinning the November referendum was "materially misleading." A phrase in the ballot language that did not appear on the ballot itself, in Noteware's view, would allow the city to sidestep a 13-year-old, voter-approved limit on city property tax collections in repaying the bonds.
Jerad Najvar, Noteware's attorney, had said it would be "the height of irresponsibility" for the city to issue bonds in connection with an election that could wind up being voided.

John Lawson, executive director of the Houston Police Officers Pension System, confirmed his organization had received its promised funds by wire transfer Friday morning.

Officials from the Houston Municipal Employees Pension System and the mayor's office could not immediately be reached for comment.
Filings with the Municipal Securities Rulemaking Board showed the bond sale closed Friday, with the $1 billion split into 16 tranches of varying maturities. The interest rates on those tranches ranged between 2.2 percent and 4.1 percent.

Brown, the city controller, said the city's overall interest rate for the issuance tallied just under 3.97 percent, which he said was notably lower than anticipated and "represents significant cost savings, and demonstrates investor confidence in this plan's impact on the city of Houston's bottom line."

http://www.pionline.com/article/2017...n-underfunding
Quote:
Houston gets $1 billion from bond offering to ease pension underfunding
Spoiler:
Houston has issued $1.01 billion in pension obligation bonds to help reduce the city’s $8.2 billion in unfunded pension liabilities.

Proceeds from the bond issuance, completed Dec. 22, were infused the same day into two of the city’s three pension funds — the $3.9 billion Houston Police Officers’ Pension System and the $2.3 billion Houston Municipal Employees Pension System. Some $750 million was targeted for the police officers’ plan and $250 million for the municipal employees’ plan.

“The city’s all-in true interest cost for this issuance came in at 3.965411% — significantly lower than we initially anticipated,” said Chris Brown, city controller, in a Dec. 22 news release. “This represents significant cost savings, and demonstrates investor confidence in this plan’s impact on the city of Houston’s bottom line.”
The bond issuance, overwhelmingly approved by Houston voters in a Nov. 7 referendum, was initially part of a pension reform package signed by Texas Gov. Greg Abbott in May. Earlier this month, a former city housing and community development director sued the city alleging the ballot description for the Nov. 7 referendum was “materially misleading” and called for a temporary restraining order on the bond issuance. On Dec. 21, a state district judge denied the plaintiff’s request for temporary restraining order, said a spokesman for Houston Mayor Sylvester Turner in an email.

The bond issuance was the only piece of the May pension reform package that went to a referendum. The package’s other reforms included benefit reductions for participants in the police officers’ fund, municipal employees’ fund and $4.1 billion Houston Firefighters’ Relief and Retirement Fund; a requirement that Houston make the full annual required contributions to the three funds; changes to the funds’ amortization periods; and reduced assumed rates of return to 7% from the previous rates, which ranged between 8% and 8.5%.
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  #1783  
Old 01-01-2018, 07:57 AM
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Mary Pat Campbell
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new thread for 2018:

http://www.actuarialoutpost.com/actu...d.php?t=329006
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