Actuarial Outpost
 
Go Back   Actuarial Outpost > Actuarial Discussion Forum > Pension - Social Security
FlashChat Actuarial Discussion Preliminary Exams CAS/SOA Exams Cyberchat Around the World Suggestions

DW Simpson International Actuarial Jobs
Canada  Asia  Australia  Bermuda  Latin America  Europe


Reply
 
Thread Tools Search this Thread Display Modes
  #1711  
Old 12-08-2017, 05:16 PM
campbell's Avatar
campbell campbell is offline
Mary Pat Campbell
SOA AAA
 
Join Date: Nov 2003
Location: NY
Studying for duolingo and coursera
Favorite beer: Murphy's Irish Stout
Posts: 88,019
Blog Entries: 6
Default

MISSISSIPPI

http://www.sunherald.com/news/politi...188451124.html

Quote:
You’ll never guess what got bill brought ‘death threats’ to a Coast lawmaker
Spoiler:

Lawmakers who bring up the Public Employees Retirement System do so at their own peril, members of the Coast delegation said, but they say it needs to be brought up anyway.

“We have to have that conversation,” Sen. Brice Wiggins, R-Pascagoula, told the crowd at the Pre-Legislative Briefing hosted by the Mississippi Gulf Coast Chamber of Commerce. “When Sen. Tindell filed a bill, he got death threats. That’s crazy. In his case, he was trying to tweak it, to make it better able to do what Sen. (Michael) Watson was saying, extend it.”

Watson and Wiggins told the 200 or so people at the Golden Nugget earlier this week that part of the problem is PERS officials paint too rosy a picture of the state of the retirement fund.


“The executive director comes to the Finance Committee every year,” said Watson, a Pascagoula Republican. “And I literally ask just about the same question every year. And every single year, the answer is the same: We’re going to be fine; everything is OK.

Never miss a local story.
Sign up today for unlimited digital access to our website, apps, the digital newspaper and more.

SUBSCRIBE NOW
“That’s what we’re fighting. You get the executive director of PERS sending out letters to all retirees, Everything’s fine. And the Legislature over here says, wait a minute, everything is not fine.”

And Watson said he’s talked to experts in the banking and pension industries who agree with the lawmakers.

“We’re in trouble,” he said. “We signed a contract. We can’t unilaterally back out of that contract. What we can do is rework the contract with two willing parties.”

The problem is clear. PERS doesn’t have enough money to pay all the present and future retirees. A 2012 plan adopted by the PERS aimed to have the plan 80 percent funded by 2042, according to a column in a PERS newsletter earlier this year by Executive Director Pat Robertson. It’s a little off course.


“Currently, PERS actuaries project that we will be 62.6 percent funded in 2042 based on current assumptions, which is only slightly higher than our current funded ratio of 60 percent,” she wrote. “Our intention continues to be to reach our goal; how that happens over the next 25 years remains to be determined.”

And it will be determined without Robertson, who said she’s retiring next year. First, Watson said, lawmakers are “going to have to do some educating.”

“If you do nothing, here’s your projection,” Watson said lawmakers will have to explain to retirees. “Or, let’s talk about some possibilities.”

Mississippi is not alone. A report by the Hoover Institution said most public pension plans are underfunded. And, it said, state and local governments are underestimating the amount of money it would take to stop the problem from growing.

“While total government employer contributions to pension systems were $111 billion in 2015, or 4.9 percent of state and local government revenue, the true annual cost of keeping pension liabilities from rising would be approximately $289 billion or 12.7 percent of revenue,” Joshua D. Rauh wrote for the Institution.

Then there’s the 13th check, the lump-sum cost-of-living increase. In 2011, a study commission created by Gov. Haley Barbour recommend that cost-of-living check be frozen for three years. Neither that, nor any other of the commission’s recommendations, were adopted.


This year, House Ways and Means Chairman Jeff Smith, R-Columbus, created a social media ruckus with what appeared to be a suggestion that the 13th check could be up for discussion again.

Democrats saw an opening and took it.

“It has been commonly referred to as the ‘13th Check,’ and is detested by many elected officials who want to get their grubby little hands on the $$$Billions in the state retirement accounts,” wrote Oxford Rep. Jay Hughes on Facebook. “Some privatizers refer to the 13th Check as a ‘welfare check,’ as if it is a handout. IT IS NOT!”

Smith, whose Facebook feed normally is heavy on weather reports, tried to assure retirees the check isn’t in jeopardy.

“There will be no cuts or modification of the Public Employees Retirement System, notwithstanding all the rumors you have heard,” he wrote. “So take a deep breath all retirees, and know your next year will not be changed as far as retirement.”
This is supposed to be a straight news story.

The headline shouldn't even refer to the death threats -- as they occurred in 2014. That's not exactly news. (and it was over filing this bill: http://billstatus.ls.state.ms.us/doc...9/SB2140IN.htm -

Quote:
AN ACT TO AMEND SECTION 25-11-112, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT MEMBERS OF THE PUBLIC EMPLOYEES' RETIREMENT SYSTEM WHO BEGIN RECEIVING A RETIREMENT ALLOWANCE ON OR AFTER JULY 1, 2014, MUST BE 65 YEARS OF AGE OR OLDER TO BE ELIGIBLE TO RECEIVE THE ADDITIONAL ANNUAL PAYMENT; AND FOR RELATED PURPOSES.
which refers to a 13th check

shame on the headline writer
__________________
It's STUMP

LinkedIn Profile
Reply With Quote
  #1712  
Old 12-10-2017, 07:39 PM
campbell's Avatar
campbell campbell is offline
Mary Pat Campbell
SOA AAA
 
Join Date: Nov 2003
Location: NY
Studying for duolingo and coursera
Favorite beer: Murphy's Irish Stout
Posts: 88,019
Blog Entries: 6
Default

REFORM
https://www.forbes.com/sites/realspi.../#2e6fd17c5efc
Quote:
Pension Reform Comes In Many Shapes And Sizes

Spoiler:
Albert Einstein once said we cannot solve our problems with the same level of thinking that created them. Unfortunately, when it comes to the nation’s struggling public pensions, now more than $1 trillion in debt, that’s exactly what’s been happening. For years, state and local policymakers have been trying to keep their heads above water, while ignoring the coming pension debt tsunami.

That is until recently.

Over the past year, three states have made the tough decision to tackle pension reform head on. These states—Arizona, Pennsylvania and Michigan—are vastly different in size, budgetary resources, and political makeup. The common denominator has been their commitment to safeguarding their public employees’ retirement systems by enacting reforms that are fiscally responsible. These states not only rose to the challenge of pension reform, but they each saw their efforts through to success. While the adopted reforms differ between these three states, the principles upon which they were built were the same.

As a former Utah senator who chaired the committee overseeing Utah’s public employee retirement systems, I’ve personally experienced the sickening feeling of seeing the approaching wave of compounding pension debt, knowing there was no possible way of riding it out.


ADVERTISING



In 2010, Utah legislators were hit with the harsh reality that Utah taxpayers would have to dedicate as much as 10% of the state’s general fund for more than two decades to pay for the 2008 investment losses in our public pension funds. That’s when my legislative colleagues and I took matters into our hands and created a plan to shore up Utah’s public pension system and cap pension related liabilities going forward. It was a plan that worked for our state and our unique situation. Legislators in Arizona, Pennsylvania and Michigan followed a similar road map.

And this is key. Every government has unique fiscal challenges requiring tailor-made solutions designed around the specific predicaments and financial resources of each state or local jurisdiction. There is no single pension reform solution that will work everywhere. But by rolling up our shirtsleeves and making a commitment to tackle the situation, pension reform is achievable.

For example, Michigan lawmakers passed, and Governor Snyder signed into law, one of the most comprehensive pension reforms enacted by any state to-date. At the time of the bill’s passage, the Michigan Public School Employee Retirement System was struggling with $29 billion in debt, while being only 60% funded. Retirement costs consumed 36% of Michigan’s school payroll. The challenge for lawmakers was how to go about reforming this system to cap the spiraling debt, while ensuring that teachers and retirees receive every penny they were promised.

Their solution was to change the pension structure for future teachers from a structurally rigid defined benefit system to a plan that is flexible, modern and portable, providing new teachers with more retirement options without short-changing their pension savings. Further, the reform does not cut a dollar of pension benefits from any current teacher or retiree.
The reform also protects current and future generations of taxpayers by employing a first-in-the-nation mechanism that will prevent further accumulation of unlimited pension debt—a move that will pay long-term dividends for Michigan residents.

In Pennsylvania, with more than $74 billion in pension debt, lawmakers tackled both the state’s public employee and teacher pension systems, giving future public employees a choice between three retirement savings options, including two defined benefit/defined contribution hybrid retirement plans and a defined contribution retirement plan. Not only is the reform expected to cap much of the state’s pension debt going forward, it should save the state more than $1 billion and reduce existing unfunded pension liabilities by up to $4 billion.

And in Arizona, lawmakers built upon their 2016 pension reform successes (Arizona lead the nation last year with comprehensive public safety employee reform) by restructuring the state’s corrections officers’ retirement plan. At only 53% funding and an accumulated $1.4 billion debt, the long-term solvency of the plan (and workers’ and retirees’ futures) was threatened. The reform, which enrolls new employees in a modern retirement plan with 100 percent vesting within three years of service and more retirement planning choices, will help ensure the long-term solvency of the pension system while saving the state billions of dollars.

The moral of the story is that there’s more than one way to achieve meaningful pension reform. A quick study of Arizona, Pennsylvania and Michigan shows it comes in many shapes and sizes. Policymakers around the nation should take note of what these three states have been able to achieve simply by changing their thinking, determining solutions that will work for their unique challenges, and seizing the opportunity.

__________________
It's STUMP

LinkedIn Profile
Reply With Quote
  #1713  
Old 12-10-2017, 07:39 PM
campbell's Avatar
campbell campbell is offline
Mary Pat Campbell
SOA AAA
 
Join Date: Nov 2003
Location: NY
Studying for duolingo and coursera
Favorite beer: Murphy's Irish Stout
Posts: 88,019
Blog Entries: 6
Default

INVESTMENT RETURNS
https://www.bloomberg.com/news/artic...3-bond-returns
Quote:
Jack Bogle Is Worried About U.S. Pensions
Spoiler:
Jack Bogle isn’t optimistic about the state of U.S. pensions over the next decade.


The founder of Vanguard Group thinks a conservative portfolio of bonds will only return about 3 percent a year over the next decade, and stocks won’t do much better, with a 4 percent annual gain over a similar period. This is “totally defeating” for pensions, which “are not going to be able to meet their 7.5 percent or 8 percent obligations,” Bogle said in a Bloomberg Radio interview that aired Thursday.

Bogle is well known for first conceiving of low-fee funds for individual investors, pegging strategies to indexes rather than giving managers free reign to buy what they wanted. This philosophy has helped Vanguard grow into a $4.5 trillion behemoth that will likely reach $10 trillion in assets within the next 10 years.

Bogle, 88, also has a self-professed knack for making accurate market calls. His prognostications on stocks have had about an 81 percent correlation to what actually happens, while his bond predictions have been accurate 95 percent of the time, he said.

“The only return you get on a bond is from the interest coupon,” with fluctuations in prices eventually evening out and becoming relatively negligible over the longer term, he said. Given a portfolio of about half corporate bonds and half U.S. Treasuries, the blended yield is about 3 percent today.

“So that’s what you get over the next decade,” he said.

This is a huge problem for pensions, which rely on bonds to provide steady, reliable income needed to cover benefit payments to plan participants. For example, the largest U.S. pension, California Public Employees’ Retirement System, is considering more than doubling its bond allocation to reduce risk and volatility as the bull market in stocks approaches nine years.

Pensions have generally lowered their returns targets over the past few years, but they’re still aiming for annual gains of more than 7 percent on average. To Bogle, that’s an unlikely scenario.

“It is almost a given that it will end badly,” he said.
http://pensionpulse.blogspot.com/201....html?spref=tw
Quote:
Mr. Index Worried About US Pensions?
Spoiler:
Lisa Abramowicz of Bloomberg reports, Jack Bogle Is Worried About U.S. Pensions:

……
Jack Bogle is absolutely right, this will end badly as there is no way US public pension funds will attain a 7 or 8 percent annualized rate of return over the next ten years without taking huge risks -- risks that can place them in an even worse predicament than they already are.

Let me repeat this, even if US pension funds aggressively allocate more to alternative investments -- hedge funds, private equity, real estate, infrastructure, etc. -- there is still little chance of attaining a 7 or 8 percent annualized rate of return over the next ten years.

And if my worst fears of deflation headed to the US materialize, even 4% annualized rate of return over the next ten years will be difficult to attain.

To understand why, go back to read my recent comment on pensions' brave new world where I noted the following:
Interestingly, the Alpine Macro report did discuss return scenarios under the deflation and inflation surprises, which you can see in table 2 below (click on image):


Quite shockingly, the authors conclude higher inflation would result in a worse outcome:
This is primarily because the P/E ratio would be compressed significantly, and the ERP would rise, both undercutting expected returns for stocks. For example, if we assume that steady-state inflation in the U.S. were to rise to 3.5%, with 2.5% steady-state real growth, equilibrium bond yields would be 6%. With the ERP at 200 basis points, the expected total return for U.S. stocks would be 3.2%. After inflation, the real return will be -0.3%.
I say shockingly because for pensions managing assets and liabilities, there is no question that unexpected inflation (which leads to higher rates) is a much better outcome than unexpected deflation.

I guess it all depends on what deflation scenario we're talking about because a prolonged debt deflation scenario I'm worried about will roil assets and make liabilities soar as the yield on the 10-year US Treasury note hits a new secular low. Mild disinflation is fine, prolonged debt deflation is a nightmare.
Let me quantify this so you understand my worst-case scenario for pensions. Prolonged deflation for me means an episode that lasts more than five years, where debt defation drives the yield on the 10-year Treasury note down to 0% or even negative territory.

We can argue whether this is a disaster scenario which is unlikely to occur barring another financial crisis of epic proportions, but if this happens, that 4% bogey won't be easy to attain for pensions even if they're heavily invested in alternative investments.

The problem now is stocks are quietly melting up and all risk assets are extremely overvalued, so people roll their eyes when I talk about the risks of prolonged debt deflation.

That's fine, even if we take Jack Bogle's sensible analysis which is nowhere near as dire as my worst case scenario, there is little chance US pensions will attain their desired rate of return.

So what does that mean in practice? Well, since many US public pensions are already chronically underfunded, what this means is contribution rates need to go up, benefits need to be cut or both to shore up these plans.

And neither unions nor state and local governments want to pump more money into their pensions but the problem is taxpayers don't want to see more hikes in their property taxes either, so something has to give.

No problem Leo, the Mother of all US pension bailouts is coming our way, Congress will quietly pass it and the Senate will approve it. Secretary Mnuchin will instruct the US Treasury to float a 50-year bond, and voila, the pension problem will disappear.

If you believe in fairy tales, be my guest, I prefer to stick to reality. And the truth is one way or another, US public pensions need to drop their pension rate-of-return fantasy even if that means contribution rates need to rise, benefits need to be cut or both.

By the way, it's not just Jack Bogle warning US public pensions to get real. Yale's David Swensen said the exact same thing recently, slamming US public pensions who justify a discount rate of 7.5 percent when he thinks they should be using the 10-year bond yield plus 50 basis points (roughly 3 percent).

Below, Vanguard's Jack Bogle isn’t optimistic about the state of US pensions over the next decade and talks about the inflows into passive investment products in Vanguard and BlackRock. See my comment on passive investing taking over and what that means exactly for investors.


__________________
It's STUMP

LinkedIn Profile
Reply With Quote
  #1714  
Old 12-10-2017, 07:39 PM
campbell's Avatar
campbell campbell is offline
Mary Pat Campbell
SOA AAA
 
Join Date: Nov 2003
Location: NY
Studying for duolingo and coursera
Favorite beer: Murphy's Irish Stout
Posts: 88,019
Blog Entries: 6
Default

ARKANSAS
EXPECTED RETURN
http://www.arkansasonline.com/news/2...=news-arkansas

Quote:
Pension system cuts projected annual return
Drop for police, fire to 7.50%
Spoiler:
The Arkansas Local Police and Fire Retirement System's trustees Thursday cut the system's projected annual investment return from 7.75 percent to 7.50 percent a year, even though the system's actuary advised them that the lower level isn't reasonable.

Then the trustees learned from its investment consultant that the system's investments increased in value last quarter by $77.2 million to $1.93 billion with the assistance of rising stock markets. The investments earned a return of 3 percent.

The system's investment return for the year that ended June 30 is 11.46 percent and its average return for the five-year period that ended June 30 is 8.6 percent a year, said Larry Middleton, executive vice president of Stephens Inc.

The system's unfunded liabilities totaled about $500 million as of Dec. 31, 2016, in the last actuarial valuation, and the projected payoff period is 16.8 years, Executive Director David Clark said. Actuaries often compare unfunded liabilities to a mortgage on a house.

System employers paid $98.5 million into the system and members contributed $22.2 million last year, Clark said. The system included 6,551 working members with an average annual salary of $49,764 and 7,391 volunteer members last year, Clark said. It also included 4,906 retired members with an average annual benefit of $12,828 last year. The average annual benefit paid to retirees who were paid employees was $22,272 and the average annual benefit for retirees who were volunteers was $1,128.

Trustee John Neal of Harrison made the motion to trim the projected return to 7.5 percent.

The action came after actuary David Hoffman said expectations for an average investment return of 7.25 percent are reasonable. A projected return of 7.5 percent a year "can't be justified" for the system, said Hoffman, who works for the Gabriel, Roeder, Smith & Co. actuarial firm of Southfield, Mich. Gabriel officials said the same in a memo dated Nov. 20 to the system's trustees.

Using either a projected investment of 7.25 percent or 7.5 percent a year wouldn't have an immediate effect on the rate charged to employers, with next year's rate averaging 21.9 percent of employers' payroll under either scenario, Hoffman said.

This year's average rate charged to employers is 21.04 percent, Clark said after Thursday's meeting. He said he doesn't have information about how much more money the higher average rate will raise because "the majority of employers still have different contribution rates. It will be a few more years before every location is at a single uniform rate."

But Neal, the trustee, said he felt more comfortable with cutting the return by a quarter of a percent rather than a half of a percent.

Trustee Scott Baxter of Jonesboro said the long-term investment return is more than 7.5 percent a year and investments have increased in value from $1.4 billion to $1.9 billion in recent years. The average return is 9.04 percent a year over the past 34 years, Clark said after the trustees' meeting.

Neal told his fellow trustees, "I feel like we are being arm-twisted nationally" by actuaries and others pressing public pension systems to cut their projected return.

But Hoffman said Gabriel's views about the Arkansas Local Police and Fire Retirement System's returns are based on the firm's analysis of system investments.

Trustee Damon Reed of Conway said the system's liabilities would be 72.9 percent funded if the system used a projected return of 7.25 percent, and 76 percent funded if the system used a projected return of 7.5 percent, based on Gabriel's projections.

The projected payoff period for the system to pay off its unfunded liabilities would be 17.4 years with a projected return of 7.5 percent and 25 years with a return of 7.25 percent, Reed said. A payoff period of 25 years "is a little scary to me" because state law contemplates a period of no more than 30 years, he said.

Afterward, Rep. Doug House, R-North Little Rock, who attended the trustees' meeting, was asked by a reporter about the trustees' decision on the return. He said he's disappointed.

"They have one loyalty and that's to the retirees and members," said House, who is co-chairman of the Legislature's Joint Committee on Public Retirement and Social Security Programs. "They are the ones that can be sued -- not me."

But Neal, in an interview, said, "We feel it's a safe number at this point that can be readdressed at any time. That's what it really boils down to because our numbers are financially sound."
__________________
It's STUMP

LinkedIn Profile
Reply With Quote
  #1715  
Old 12-10-2017, 07:40 PM
campbell's Avatar
campbell campbell is offline
Mary Pat Campbell
SOA AAA
 
Join Date: Nov 2003
Location: NY
Studying for duolingo and coursera
Favorite beer: Murphy's Irish Stout
Posts: 88,019
Blog Entries: 6
Default

CALIFORNIA
CALPERS
http://www.ocregister.com/2017/12/09...cessary-risks/
Quote:
CalPERS exposes taxpayers to unnecessary risks
Spoiler:
Listing all the deficiencies of the California Public Employee Retirement System would be a daunting task. A long history of corruption involving so-called “placement fees,” dysfunctional governance, undue union influence and poor rates of return are themselves reasons why California needs fundamental pension reform.

Now we can add to that list how CalPERS’s mindless pursuit of progressive, feel-good causes exposes taxpayers to even greater risk.

In a scathing report released earlier this week, the American Council for Capital Formation blamed CalPERS’ poor investment results over the last decade on its increasing focus on “sustainable” investing strategies. Often referred to as ESG policies (environmental, social and governance) this strategy applies subjective opinions in an effort to measure the sustainability and “ethical impact” of an investment in a company or business. Of course, ESG judgments are as malleable as the varying opinions of those judging the criteria. Applying ESG standards as a primary investment strategy is the polar opposite of looking at actual financial performance.

According to the report, “During this time of increased ESG investing and activism, the fund’s performance has suffered, converting a $3 billion pension surplus to nearly $140 billion deficit over the past 10 years.”

The shift by CalPERS away from basing investment decisions on objective financial performance has also caught the eye of current employees and retirees who depend on CalPERS for their pensions. According to a recent Sacramento Bee article entitled, “Before CalPERS can save the world, public workers want it to save their pensions,” a police officer testified before the CalPERS board on ESG investing. The officer, who was also the treasurer of his local police association, stated, “We cannot afford to lose funding for law enforcement officers in exchange for a socially responsible investment policy.”
This is not to suggest that investors — either public or private — should shun investments in companies that have strong ethical standards or are focused on clean technologies. Quite the opposite. Many of those companies are solid performers. But so too are oil companies and gun manufacturers.

As noted above, even public employees are beginning to question ESG investment strategies by CalPERS, as well they should. But let’s not forget who remains the ultimate backstop for California’s public employee retirement plans — California taxpayers. Bad investment decisions and dysfunctional governance have already taken their toll as the slice of general fund budgets for both state and local governments dedicated to pension costs continues to “crowd out” other public needs.

Nothing could be more succinct than this statement from the Council of Institutional Investors: “When the managers take their eyes off the ball and the funds are mismanaged, taxpayers often have to make up the difference, especially with public systems like CalPERS — the largest public U.S. pension fund.”

Ultimately, the answer is phasing out California’s system of defined benefits and, as other states have begun to do, shift to defined contributions. For the employees, the latter are similar to 401(k) retirement plans, are portable and allow the employee to choose the level of risk that is right for them. The best feature, however, is eliminating future risk to taxpayers because their financial obligation would be met at the close of every pay period. That’s much better than having hundreds of billions in unfunded pension obligations that will burden future generations for decades.


In the meantime, however, Exxon and Smith & Wesson are still good investments.

Jon Coupal is president of the Howard Jarvis Taxpayers Association.
__________________
It's STUMP

LinkedIn Profile
Reply With Quote
  #1716  
Old 12-10-2017, 07:40 PM
campbell's Avatar
campbell campbell is offline
Mary Pat Campbell
SOA AAA
 
Join Date: Nov 2003
Location: NY
Studying for duolingo and coursera
Favorite beer: Murphy's Irish Stout
Posts: 88,019
Blog Entries: 6
Default

CONNECTICUT
HARTFORD
POLICE
http://www.courant.com/community/har...208-story.html
Quote:
Hartford Police Union Ratifies Contract
Spoiler:
Hartford’s Police Union, after working 16 months without a contract, voted late Friday to approve a collective bargaining agreement that includes increases to employees’ health-insurance costs and pension premiums, and places a cap on sick-leave accrual for new hires, measures that city officials estimate will generate millions in savings each year.

The union, the largest in Hartford at about 400 members, had signed a tentative agreement with the city last week. Its members spent the intervening days at various informational meetings about the agreement’s terms, organized by union leadership.
…..
"The outstanding members of the Hartford Police Department put themselves at risk every day to keep our city safe,” Bronin wrote, "and I am grateful to them for ratifying a contract that not only provides millions of dollars of immediate savings, but also makes significant long-term structural reforms to healthcare, pension contributions, and long-term pension benefits.”
…..
Pension contributions will also increase under the contract by 3 percent, which will “reduce long-term pension liabilities,” according to Bronin’s resolution. The contract reduces multipliers and maximum benefits for both sworn and non-sworn new hires.

It also eliminates city-provided retiree health insurance for new hires and restructures how sick leave is accrued and paid out.

Under the agreement, current union members will have a lower cap on the maximum amount of sick time they can accrue and cash in at retirement. New hires now have a maximum sick leave accrual of 80 days and would not receive any payout of accrued sick leave upon retirement.

__________________
It's STUMP

LinkedIn Profile
Reply With Quote
  #1717  
Old 12-10-2017, 07:40 PM
campbell's Avatar
campbell campbell is offline
Mary Pat Campbell
SOA AAA
 
Join Date: Nov 2003
Location: NY
Studying for duolingo and coursera
Favorite beer: Murphy's Irish Stout
Posts: 88,019
Blog Entries: 6
Default

FLORIDA
NAPLES
http://www.naplesnews.com/story/news...ers/919926001/
Quote:
Naples gains with investments, but $44 million in pension liability still unfunded
Spoiler:
A year of healthy investment slightly reduced the Naples government pool of retirement debt, but pension board trustees said Friday they again will urge the Naples City Council to consider increasing annual payments to eat even more into the $44 million unfunded liability.

With an expected rate of investment return at 7.5 percent, actual returns from fiscal 2017 as high as 9 percent shrunk the debt in each of the city’s retirement plans for firefighters, police officers and general employees.

The $56 million pension plan for general employees earned a 9.1 percent return, reducing its unfunded liability to $13.4 million from $15.6 million.

An 8.9 percent return reduced debt on the $49 million police pension plan to $18.5 million from $19.8 million.

And with an 8.8 percent return, the $53 million firefighters pension plan reduced its liability to $12.5 million from $13.1 million.




Naples Pensions
Infogram


Trustees said the city benefited from a strong market for its investment portfolio, which includes stock, municipal bonds and other securities.

“It’s really no different than what everyone else is experiencing,” said Councilwoman Ellen Seigel, the general chairwoman of the city’s three pension boards.

Still facing a combined unfunded liability in the tens of millions, the council should consider additional voluntary debt payments, Seigel said. The funded ratio for each of the three pension plans “needs to be higher,” she said.

“And for that to happen, more money would have to come from the city,” Seigel said.

Trustees are expected to discuss pensions with the council at a meeting after the February municipal election.


Records show the city contributed $5,503,950 to the three retirement plans for its employees in fiscal 2017, about the same as the $5,514,829 contributed the previous year.

The general employee and firefighter pension plans are each 80 percent funded. The police pension plan is 72 percent funded. Typically, at least 80 percent is considered a healthy funding level.

General employees in fiscal 2017 paid $670,400 into their plan. Police officers paid $200,100. Firefighters paid $141,200.

The city’s annual retirement contribution has more than doubled from just over $2 million in 2006, adjusted for inflation. During the recession, the Naples pension plans earned well below expected return rates for most years.

The combined unfunded liability for the three Naples retirement plans hit a $65 million peak in 2010.

In summer 2016, before Naples leaders deliberated on their 2017 budget, trustees urged the council to begin making payments — as much as $500,000 annually — to help pay off retirement debt as the economy improved. The council didn’t address the issue before passing the budget.

Fire Chief Pete DiMaria, chairman of the firefighters pension board, renewed the call.

“Whatever achieves a lower unfunded liability and a more balanced fund is a positive for the pension plans,” he said.
__________________
It's STUMP

LinkedIn Profile
Reply With Quote
  #1718  
Old 12-10-2017, 07:40 PM
campbell's Avatar
campbell campbell is offline
Mary Pat Campbell
SOA AAA
 
Join Date: Nov 2003
Location: NY
Studying for duolingo and coursera
Favorite beer: Murphy's Irish Stout
Posts: 88,019
Blog Entries: 6
Default

ILLINOIS
http://www.sj-r.com/news/20171209/st...down-teeny-bit
Quote:
Statehouse Insider: State pension debt went down? A teeny bit

Spoiler:
Could it possibly be? Did the state’s pension debt actually go down last year?

The answer is yes. Only by a teeny, tiny amount, but it did go down.

The annual report on the five state-funded pension systems from the Commission on Government Forecasting and Accountability. It showed that as of June 30, the unfunded liability for the pension systems — money that is owed in benefits, but which aren’t covered by assets — is $129.1 billion. At the same time last year, the debt stood at $129.8 billion. That’s less than half a percent reduction, but it’s better than watching it increase.

Before anyone gets some delusion that the pension problem has been solved, it hasn’t.

The state’s pension systems benefited from better than expected returns on their investments. Perhaps you’ve heard that the stock markets have been doing pretty well for a while. That’s not going to continue forever.


The long-term projections for the pension systems show the unfunded liabilities continuing to grow for another decade or so before they start gradually declining. It still means the systems together won’t be 90 percent funded until 2045.

And all of that is assuming investment returns hit their targets and state officials resist the temptation to again short the pension systems to use the money for some other program. For the next 28 years.

BELLEVILLE
https://www.illinoispolicy.org/belle...erty-tax-hike/
Quote:
BELLEVILLE TO CONSIDER $1.2 MILLION PROPERTY TAX HIKE
Spoiler:
The city’s property tax levy would increase by nearly 12 percent, with most of the funding going toward police and fire pensions.

Belleville residents will have the opportunity to sound off at a public hearing regarding a proposed 11.98 percent increase in the city’s property tax levy.

If passed, the levy would rise to nearly $11.3 million from the current levy of just under $10.1 million. The meeting will be held in the City Council Chambers at Belleville City Hall at 6:30 p.m., Dec. 11.

The increased revenues would bring an additional $1.2 million into the city’s coffers, with almost all the new money going toward Belleville’s police and fire pension funds, as well as health insurance costs. Meanwhile, money for Belleville’s playground and library funds would slightly decrease under the proposal.

The proposed property tax levy increase is more than twice as high as the 4.67 percent levy increase passed unanimously by the Belleville City Council in December 2016.

Unfortunately, the numbers show pumping more money into Belleville’s police and fire pension funds has been somewhat of a futile effort.

From 2012 to 2016, taxpayer contributions to Belleville’s fire pension fund rose by more than 34 percent, according to the Illinois Department of Insurance’s 2017 Biennial Report. However, despite the large uptick in city dollars, the fund remains in dire shape, with less than 43 cents on hand for every dollar needed to pay out future benefits, and more pensioners than active participants.

Despite the increase in funding, the pension’s funding ratio climbed less than two percentage points in four years, to 42.9 percent in 2016 from 41.4 percent in 2012.

Belleville’s police pension fund is faring little better, with a funding level of only 53.2 percent.

Belleville residents shouldn’t have to put up with ever-increasing property tax bills while growing pension costs swallow up funding for basic government services. The need for reform is evident.

This persistent problem demonstrates the need for state lawmakers to protect homeowners from skyrocketing property tax bills. Passing a property tax freeze on homeowners’ actual bills (not just the levies of local governments), and requiring voter approval for property tax hikes are two powerful reforms that would go a long way for families struggling to pay higher property taxes as their own incomes stagnate.

Unless real spending reform happens in both the Statehouse and at the local level, it’s likely Belleville residents will have to prepare to pay more.
__________________
It's STUMP

LinkedIn Profile
Reply With Quote
  #1719  
Old 12-10-2017, 07:41 PM
campbell's Avatar
campbell campbell is offline
Mary Pat Campbell
SOA AAA
 
Join Date: Nov 2003
Location: NY
Studying for duolingo and coursera
Favorite beer: Murphy's Irish Stout
Posts: 88,019
Blog Entries: 6
Default

KENTUCKY
http://weku.fm/post/thayer-says-shif...-plan-critical
Quote:
Thayer Says Shifting to 401-(K)-Type Pension Plan Critical

Spoiler:
A leader of Kentucky’s state senate says a “watered down” version of Gov. Matt Bevin’s pension proposal is being drafted but it would still shift future workers onto 401(k)-type retirement plans.

Senate Majority Floor Leader Damon Thayer said the move is a “cornerstone” of the plan.

“It’s critical that if we’re going to get this state back on a sustainable pension path that all new employees after July 1 go on a 401(k),” he said.

Thayer said he hopes the bill is revealed to the public prior to Christmas so it can be reviewed before lawmakers return for the legislative session that begins on Jan. 2.


“It has many of the changes that were suggested by the public sector. It still makes changes in current pensions that are outside the inviolable contract, ” he said.

Gov. Bevin still says he wants to call a special legislative session for lawmakers to consider changes to the pension systems sometime before the end of the year.

But a majority of Republican House members signed off on a letter discouraging Bevin from calling a special session.

Thayer said the new proposal isn’t finished or scored and there is little time for the legislature to “have a session of any meaningful impact” by the end of the year.

In October, Bevin and leaders of the state House and Senate unveiled a proposal that would phase out Kentucky’s use of a defined benefit pension system for most state workers.

Under the plan, most future and some current state workers would be moved onto 401(k)-type plans in which the state wouldn’t make monthly payments after retirement.

Republican lawmakers have apparently backed off some provisions affecting current retirees and employees—including the 3 percent fee for retiree health and suspension of cost of living adjustments.

http://surfky.com/index.php/179-news...-session-ideal
Quote:
JIM WATERS: Hitting Ground Running on Pension Reform in Regular Session Ideal
Spoiler:
KENTUCKY, Ky. (12/9/17) — WLEX weather anchor Bill Meck was no doubt the most interesting speaker at this year’s Kentucky Public Retirees’ Annual Conference in Frankfort.

Since I didn’t receive an invitation to this glorious affair, I’m not privy to what Meck, a storm chaser who once created “Danger From the Sky,” an award-winning documentary on severe weather, said that might relate his illustrious career forecasting weather patterns to the clashing of budget realities with promises – real and perceived – made to Kentucky’s public pensioners.

Perhaps Meck warned his audience that allowing distractions like deceptively calm weather prior to a tornado to delay taking cover from a fast-arriving storm is akin to ignoring or downplaying the seriousness of situations, whether they involve storms or diminishing retirement plans.

Opponents of proposals containing meaningful changes in the manner and level at which benefits are awarded by Kentucky’s retirement systems appear only too eager to allow distractions to result in more of the same kind of timid legislation passed in recent years and inaccurately labeled “substantive pension reform.”

Had such measures been sufficient, we wouldn’t find ourselves with a $65 billion-and-growing unfunded liability and retirement systems sliding toward the precipice of insolvency.

Nothing, including the ongoing sexual-harassment scandal, should waylay Frankfort from tackling this crisis.

In fact, failing to do so will only darken the black cloud hanging over the Capitol.

An unwillingness to create a fairer, properly prefunded and more sustainable retirement-benefits structure cannot in any sense be considered consequential progress.

We’ve seen too many fluffy proposals in recent history epitomizing little more than whistling ‘Dixie” past Kentucky’s economic graveyard as communities scrape for dollars to pay ballooning pension bills while still funding services citizens expect from local governments.

It’s substantially affecting taxpayers in places like Hopkins County, where in just the past few years, workers from outside Madisonville who work in the county seat were hit with an occupational tax while payroll taxes on employees in the city increased, property taxes rose by maximum-allowable rates and diners began forking over a supersized 3 percent restaurant tax.

Taxpayers across the commonwealth facing similar predicaments want such whistling to end.

But it doesn’t have to end with a forced special legislative session in December.

Successful special sessions require a ton of solid agreement among legislators before the opening gavel falls.

Excessive debate in such a session likely would cause it to either run too long or shut down without a decision, which would be an unmitigated political disaster for the GOP.

Gov. Bevin’s intentions are right in his desire to call the legislature back to Frankfort during the interim to address the pension predicament.

However, using his considerable leadership skills to make 2018 the most productive legislative session in Kentucky’s history would in no way diminish his standing.

For years, House Democratic leaders enabled by their party’s governor wasted time with frivolous legislation, ensuring that General Assembly sessions – especially in earlier weeks – moved lethargically and avoided any real meaningful reforms in most policy areas.

Hitting the ground running on pension reform during the regular budget session in early January would allow for the quantity and quality of debate in a Republican-led House that allows for fresh ideas, including a new paradigm for retirement systems protecting taxpayers, benefitting beneficiaries, offering real changes and garnering enough votes.

Republicans’ greatest accomplishment during the 2017 General Assembly was their focus and impressive work ethic during the first week of the session.

The results added up to possibly the most-productive week in Kentucky’s 225-year legislative history.

For an encore, why not spend the first 30 days of the 2018 session fully debating and fixing the pension systems with politically successful legislation and the second half passing a tough, conservative budget, making it Kentucky’s most momentous legislative session in history?

SurfKY News

Jim Waters is president and CEO of the Bluegrass Institute for Public Policy Solutions, Kentucky’s free-market think tank. Read previous columns at www.bipps.org. He can be reached at jwaters@freedomkentucky.com and @bipps on Twitter.


http://wkms.org/post/gop-lawmakers-c...-401ks-remains
Quote:
GOP Lawmakers Crafting New Pension Bill; Shift To 401(k)s Remains
Spoiler:
A leader of Kentucky’s state senate says a “watered down” version of Gov. Matt Bevin’s pension proposal is being drafted but it would still shift future workers onto 401(k)-type retirement plans.

Senate Majority Floor Leader Damon Thayer said he hopes the bill is revealed to the public before Christmas so it can be reviewed in advance of lawmakers’ return for the legislative session that begins on Jan. 2.

“It doesn’t go as far as I would like it to, but it has many of the changes that were suggested by the public sector,” Thayer said. “It still makes changes in current pensions that are outside the inviolable contract.”

Bevin still says he wants to call a special legislative session for lawmakers to consider changes to the pension systems sometime before the end of the year.

But a special session is increasingly unlikely. Earlier this week, a majority of Republican House members signed off on a letter discouraging Bevin from calling a special session.

Thayer said the new proposal isn’t finished or scored and there is little time for the legislature to “have a session of any meaningful impact” by the end of the year.

“We took the time to consider public sector input and incorporated some of their suggestions into a new bill,” Thayer said. “And because we took that time, now we’re basically running out of time. “I’m a big advocate of a special session, I have been all along. I wish we could’ve gotten it done by now.”

In October, Bevin and leaders of the state House and Senate unveiled a proposal that would phase out Kentucky’s use of a defined benefit pension system for most state workers.

Under the plan, most future and some current state workers would be moved onto 401(k)-type plans in which the state would match employees’ retirement contributions but wouldn’t make monthly payments after retirement.

Current employees would have their conventional pension benefits capped after 27 years of service and moved into 401(k)s going forward.

The proposal would also require employees to contribute 3 percent of their salaries to the retiree health plan, suspend retired teachers’ cost of living adjustments for five years and halt pension benefits for retirees who return to public service full-time.

Thayer wouldn’t provide many details about what’s in the new proposal that’s being hashed out between Bevin and Republican leaders of the legislature.

Republican lawmakers have apparently backed off some provisions affecting current retirees and employees — including the 3 percent fee for retiree health and suspension of cost of living adjustments.

But Thayer said moving future employees onto 401(k)-type plans — technically called 401(a)s — is a “cornerstone” of the plan.

“It’s critical that if we’re going to get this state back on a sustainable pension path that all new employees after July 1 go on a 401(a),” Thayer said.

https://www.courier-journal.com/stor...orm/929961001/
Quote:
Pension plans will need nearly $800 million more next year, Kentucky Retirement Systems says
Spoiler:
FRANKFORT, Ky. – Nearly $800 million more will be needed next year to put the state and local government retirement plans of the Kentucky Retirement Systems on the road to recovery.

That breaks down to $477 million more for three plans that provide pension and health benefits for state government retirees, and $317 million more from local governments and school districts for the pension and health benefits of their employees.

To put the $477 million increase needed for the state government plans next year into context, consider that this year’s total cost to operate Kentucky’s prison system is a bit more than $500 million. Where the money for pensions will come from is undetermined.

But the Kentucky Retirement Systems board of trustees received and approved the recommended increases in taxpayer outlays for public pensions on Thursday. The increases would take effect July 1.

More on pensions: Most House Republicans ask Gov. Bevin to hold off on calling special session in 2017

Background: Kentucky pension reform: House Republicans say they're close to a deal

The massive dollar amounts come as no surprise and are largely a result of new assumptions the board made this year — lowering projections on how much the plans will earn on investments and on how much government payrolls are expected to grow.


John Farris, chairman of the board, said the new assumptions replace optimistic ones used by boards in the past that caused Kentucky Retirement Systems to not ask for sufficient funding, which led to the accumulation of billions in unfunded liabilities.

“Now we’re giving the right numbers. Lots of complaints about the right numbers. I understand it,” Farris said. “I hear that from local and county officials. I wish it wasn’t that way. I wish they were given the right numbers 10 years ago.”

The numbers released Thursday show that the state’s worst-funded plan — the main plan that covers most state employees — needs the majority of the new money. This plan, for state employees in non-hazardous occupations, must get its funding boosted a whopping $448 million a year — from $844 million this year to nearly $1.3 billion in 2018-19.

Two other state government pension plans will require $29 million more next year, while two plans that cover local government employees plus the non-teaching employees of school districts (bus drivers, cooks, janitors, etc.) will require $317 million more.

The amounts that state and local governments and school districts will be required to contribute to pensions next year will change if the General Assembly passes a pension reform bill before the next fiscal year begins.

But exactly what that reform bill will look like, and when it will pass, are unclear.

Join now for as low as
$29/YR
Subscribe Now
Gov. Matt Bevin has said he will call a special legislative session before the year ends to pass such a bill. But the reform bill Bevin offered in October was met with strong opposition and was never embraced by his fellow Republicans who control the Kentucky House.

House Republicans on Wednesday asked the governor to not call a special session in the remaining weeks of this year. They said they want to press on to develop a revised bill that has their support and pass it in January after the regular legislative session begins.

Budget Director John Chilton said that pensions are likely to require a major infusion of additional state dollars next year. “We continue to think there will be a need for another $700 million in General Fund dollars — in addition to what we’ve been contributing in the past,” said Chilton, who is a member of the retirement systems' board.
http://www.sunherald.com/news/busine...188572709.html
Quote:
Kentucky lawmakers get expensive ask for pension system
Spoiler:
Kentucky taxpayers need to pay nearly $1 billion extra over the next two years to keep solvent a retirement plan for most state workers.

The Kentucky Employees Retirement System board of trustees told state lawmakers Thursday they need to spend $2.8 billion over the next two years on a retirement plan that covers state workers and police officers. That's $954 million more than was required the previous two years.

Nearly all of that increase is because the board of trustees believes the state will earn less money on its investments and have fewer employees contributing to the system over the next three decades. Board chairman John Farris says the numbers, while more expensive, are more realistic.

"Our role should have been in the past to calculate these numbers correctly and give them to the Legislature. Previous boards didn't do that," he said.

The numbers approved Thursday do not include the Kentucky Teachers Retirement System, which is governed by a separate board of trustees. When you include them, state budget director John Chilton said he expects the state would need an extra $700 million a year.

The huge increases come at a bad time for the cash-strapped state government. The state ended the most recent fiscal year with a $138.5 million deficit. State economists predict the government is headed for another shortfall next year of $155 million.

Republican Gov. Matt Bevin has indicated he wants to impose mid-year budget cuts of 17.4 percent to cover the shortfall and replenish the state's savings account. But most state agencies outside of his direct control, including the judicial branch and the department of education, have resisted.

State lawmakers could decide not to fully fund the pension system, as previous Legislatures chose to do for much of the last decade. But Bevin and other Republican leaders have sharply criticized that approach, indicating they are committed to paying the full amount regardless of the impacts it has on the rest of state government.

Bevin has proposed a 500-plus page bill to overhaul the pension system, but has been met with significant opposition among state employees and even within his own political party. Bevin has vowed to call a special session of the Legislature to vote on the bill by the end of the year. But Wednesday, more than half of the majority House Republican caucus signed a letter asking Bevin not to call a special session.

Thursday's vote also affects local governments. All together, they would have to pay an additional $317 million each year for the retirement plan that covers local city and county government workers. Some board members wanted to soften that blow by phasing in the increases over the next five years. But an attorney for the board said only the Legislature could decide to do that.

LOUISVILLE
https://www.courier-journal.com/stor...get/933259001/
Quote:
Louisville's pension costs to go up a whopping $38M, threatening to wipe out new revenue
Spoiler:
Louisville's pension bill will go up by $38 million next year, an amount that could wipe out any revenue growth in Mayor Greg Fischer's next budget.

The Kentucky Retirement Systems board of trustees announced this week that it needs almost $800 million more to make state and local government retirement plans solvent. That breaks down to about $317 million for local governments and school districts alone.

The Fischer administration said that will result in the city spending about $115 million on pensions next year, compared to $76.5 million this fiscal year. The 50 percent increase would be the largest single-year jump metro government has ever faced.

"We have not yet projected for the new fiscal year, but I can assure you it won't be $38 million in new revenue," Fischer spokesman Chris Poynter said.

Related: Most House Republicans ask Bevin to hold off on calling special session in 2017

Daniel Frockt, the city's chief financial officer, told members of the Metro Council Budget Committee on Thursday that the increase will "more than absorb all the growth that we had."

Fischer said in April that the city was projecting $23 million in revenue growth for the current fiscal year.

Council members suggested the administration seek some sort of reprieve with the state retirement board, given the increase.

"While we want some form of reform, we also need time to implement something like this," said Councilwoman Marianne Butler, chairwoman of the budget panel. "A $38 million hit is much more than what our growth was last year."

Some council members asked if Louisville has the option to pay the retiree obligations in phases rather than immediately on July 1.

Frockt said the rate adopted by the retirement board is normally an obligation that local governments are required to pay in full. "But we also haven’t had a rate that has increased by 50 percent," he said.

Background: Pension plans will need nearly $800 million more next year

Paying for retirees’ benefits has eaten up an increasing amount of the city’s budget over the years.

In the 2003-04 fiscal year — the first year after city and county governments merged — Louisville's contribution to the to the County Employees Retirement System was $31 million. But in 2010-11, Louisville’s contribution was about $67 million.

The amounts that Louisville will be required to pay toward retiree benefits could change depending on whether state lawmakers adopt a pension reform plan before the next fiscal year begins.

But what that legislation will look like remains unclear.

Gov. Matt Bevin has promised he will call a special legislative session this year, but House Republicans have asked that he not do so. Instead, GOP lawmakers said they want to tackle the issue when the regular legislative session begins next month.

__________________
It's STUMP

LinkedIn Profile
Reply With Quote
  #1720  
Old 12-10-2017, 07:41 PM
campbell's Avatar
campbell campbell is offline
Mary Pat Campbell
SOA AAA
 
Join Date: Nov 2003
Location: NY
Studying for duolingo and coursera
Favorite beer: Murphy's Irish Stout
Posts: 88,019
Blog Entries: 6
Default

MICHIGAN
http://www.pionline.com/article/2017...-pension-plans

Quote:
Michigan Legislature passes bill to create stability board to assist municipal pension plans
Spoiler:
The Michigan Senate and House passed legislation on Thursday creating a Municipal Stability Board within the state's treasury department to oversee the funded status of municipal pension plans.

The proposed Protecting Local Government Retirement and Benefits Act creates the board for municipalities in Michigan that have a funding ratio of 60% or less and whose annual pension contribution is more than 10% of its revenue.

The three-member board, which will consist of a state official, local official and member representing employees and retirees appointed by the Michigan governor, will review and annually update a list of best practices for municipalities with underfunded plans, and those municipalities will be required to submit a corrective action plan within 180 days of receiving notification from the board of their underfunded status.
Thomas Albert, state representative and sponsor of the bill, and Jennifer Mausoff, spokeswoman for the $10 billion Michigan Municipal Employees' Retirement System, Lansing, was not available to provide further information.

__________________
It's STUMP

LinkedIn Profile
Reply With Quote
Reply

Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off


All times are GMT -4. The time now is 10:58 AM.


Powered by vBulletin®
Copyright ©2000 - 2019, Jelsoft Enterprises Ltd.
*PLEASE NOTE: Posts are not checked for accuracy, and do not
represent the views of the Actuarial Outpost or its sponsors.
Page generated in 0.63879 seconds with 9 queries