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  #751  
Old 09-09-2013, 04:58 PM
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Mary Pat Campbell
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CONTRA COSTA, CA

http://www.contracostatimes.com/dani...sta-retirement

Quote:
Marking a significant political shift, Contra Costa's public worker retirement system last week eliminated most pension spiking opportunities for new employees.

The Contra Costa County Employees' Retirement Association administers pensions for 17 government agencies. Its board consists of the county treasurer, four trustees appointed by the county Board of Supervisors, and four retiree and employee representatives.

Historically, labor has controlled the board because county supervisors have appointed at least one union-friendly trustee. That ended in June, when they refused to reappoint former Richmond Councilwoman Maria Theresa Viramontes and replaced her with attorney Scott Gordon.

The first significant sign of change came when the retirement board decided how to implement the new state pension law for workers hired after Jan. 1 of this year. For years, the Contra Costa system has included a ridiculous list of pay add-ons in pension calculations.

For example, a worker's pension could be based not only on highest base salary but also extra compensation for everything from unused vacation to shift differentials, holiday pay and training certificates.

The new state law eliminated many add-ons for new employees' pension calculations, but left it to each retirement system to make determinations on other items. With Viramontes, the Contra Costa pension board had planned to include a substantial list.

But on Wednesday, trustees voted to eliminate all add-ons. Pensions for new workers will be calculated using only base pay. That comports with the plain reading of the new law.

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  #752  
Old 09-09-2013, 05:20 PM
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CALIFORNIA

http://www.fresnobee.com/2013/09/08/...ince-1999.html

Quote:
The average retirement payout for new retirees in California's biggest public pension system doubled between 1999 and 2012, according to CalPERS data, and initial monthly payments for one group nearly tripled in that period.

State and local cops and firefighters benefited the most.

In the 14 years covered by the data analyzed by The Sacramento Bee, average first-month pensions to state police and firefighters went from $1,770 to $4,978. CHP officers' first-month retirement payments doubled from $3,633 to $7,418, and local government safety employees' pensions went from $3,296 to $6,867.

The figures from CalPERS' internal annual reports, obtained by The Sacramento Bee through a Public Records Act request, show how upgraded pension formulas that became fashionable during the late 1990s and early 2000s amplified the impact of pay raises to boost retirement allowances.
.....
CalPERS Deputy Chief Actuary David Lamoureux attributed the increase largely to higher salaries. He noted that initial payments are determined by three factors: an employee's retirement age, service time and pay.

The largest group of state workers is under a "2 at 55" formula. Under that plan, for example, a person earning $5,000 per month when he or she retires at age 55 after 20 years of service receives a $2,000 monthly pension.


.....
Salary growth explains "at least 50 percent" of the increase in initial pension payments, Lamoureux said, "and maybe closer to 70 or 75 percent." Enhanced formulas introduced in 1999 and later "could easily account for another 20 percent of the (pension) increases," Lamoureux said.

.....
During the dot-com boom, state and local governments had extra money, he said, "and there were aggressive, retroactive increases, especially in public safety." CHP officers, for example, before 1999 could retire at age 50 with 2% of pay multiplied by up to 30 years of service time.

Then lawmakers approved a change to the formula that allowed officers to retire at 50 with 3% of their wages. The result wasn't that officers retired earlier — their average age of retirement, 53, didn't change significantly — but they retired with a bigger pension. The change was made retroactive.

Last year, initial average retirement payments from the CHP ran $500 per month more than those of local police and fire retirees and about 21/2 times those of state miscellaneous workers, the largest group in CalPERS.



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  #753  
Old 09-09-2013, 08:53 PM
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Default Senate Bill 400 1999

If Lamoureux had said since 2000, he might have been right.

But the period beginning in 1999 includes SB 400 which seems to make him wrong:

http://online.wsj.com/article/SB1000...189252384.html

Quote:
Originally Posted by Crane
In 1999 then California Governor Gray Davis signed into law a bill that represented the largest issuance of non-voter-approved debt in the state's history. The bill SB 400 granted billions of dollars in retroactive pension boosts to state employees, allowing retirements as young as age 50 with lifetime pensions of up to 90% of final year salaries. The California Public Employees' Retirement System sold the pension boost to the state legislature by promising that "no increase over current employer contributions is needed for these benefit improvements" and that Calpers would "remain fully funded." They also claimed that enhanced pensions would not cost taxpayers "a dime" because investment bets would cover the expense.
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  #754  
Old 09-10-2013, 11:54 AM
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DETROIT

http://www.freep.com/article/2013090...ptcy-Kevyn-Orr



Quote:
One of Detroit’s two pension funds handed out nearly $1 billion in bonus cash payments over two decades to retirees and active employees’ retirement accounts instead of reinvesting the extra earnings for the future, according to a Free Press review of city records.

The payments, often referred to as a “13th check,” contributed to Detroit’s financial crisis and its historic Chapter 9 bankruptcy filing by increasing the amount the city needed to contribute each year to keep the pension fund solvent.

Had the city’s General Retirement System held on to the excess cash, the city might not have felt the need to borrow $1.44 billion in 2005 to plug the city’s unfunded pension liabilities gap, the Free Press found. That debt has ballooned to nearly one-fifth of the city’s total debt today and played a role in pushing the city into filing the largest municipal bankruptcy in the nation’s history in July.

.....
Pension board officials have consistently defended the practice, but the City Council finally outlawed it in late 2011.

.....
By the time the practice was outlawed, the General Retirement System board, which represents nonuniform employees, had already distributed $951 million in excess earnings from 1985 to 2008, according to an actuarial report performed for the council in 2011 by independent statistician Joseph Esuchanko.

.....
The 13th checks were distributed when the pension fund’s investments outperformed annual expectations. The extra bucks were given to active workers’ annuity accounts and to retirees usually as an extra monthly payment.

.....
Even after the city used borrowed cash to fund the pensions, pension trustees continued to hand out 13th checks — more than $200 million since 2005. And in some years when investment returns were too low to support a 13th check, trustees still voted to give $500 checks to retirees, a tab that totaled millions, minutes of the General Retirement System show.

.....
An audit report from Conway MacKenzie, filed by Orr’s team in bankruptcy court on July 18, highlighted a move by the GRS in 2009 that increased active employees’ pension annuity accounts by 7.5%, even though the overall pension fund lost 24.1% of its value that same year. The report called it a particularly “egregious” move and an “abuse of discretion.”

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  #755  
Old 09-10-2013, 01:13 PM
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RHODE ISLAND

http://news.providencejournal.com/br...fundedrea.html

Quote:
PROVIDENCE, R.I. -- Twenty three public pension plans managed by cities and towns remain critically underfunded, according to the state Division of Municipal Finance.

The plans are not expected to emerge from that critical status until 2033. The majority are not even expected to meet their required annual contribution until 2014, according to the division.

Susanne Greschner, who heads the state municipal finance division, presented the information Monday to the state commission charged with looking at the pension plans.
Narragansett, among the newest additions to the list of plans in critical status, also gave an update on how the town is seeking to improve its pension system.

The town has two plans that are in critical status: a pension plan for certain, older police officers, which is 2.3 percent funded; and the plan for town workers which is about 57.5 percent funded.
Uh......

...I'm sure there's probably only a few people left in that plan... right?

Yeesh.
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  #756  
Old 09-10-2013, 01:46 PM
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USA

http://ai-cio.com/channel/REGULATION..._Pensions.html

Quote:
(September 10, 2013) – It may be hard to believe, but according to legislative voting records, public pensions only became a partisan issue a few years ago.

A study of state lawmakers’ voting records from 1999 through 2011 has determined that Democrats and Republicans heavily supported expanding pension benefits until 2009. During the first three years of the data set, 34 states passed bills boosting liabilities, while just a single state—South Dakota—reduced benefits.

But the financial crisis brought an end to both this largesse and political consensus, the researchers found.

......
Prior to 2009, Democrats voted to raise benefits 97% of the time, while Republicans supported increases at a rate of 92%. Democrats’ rate held steady (98%) with the onset of the recession, while Republican “yes” votes fell to 68%, according to 34,301-vote data set.

Likewise, before the recession, politicians of both parties tended to back the rare pension reduction bills that crossed their desks roughly 90% of the time. Post-2008, voting became much more partisan. Republicans serving in Democratically controlled states supported reforms at a rate of 54%. When Democrats were in the minority, “yes” votes fell to 69%. Politicians from both sides of the aisle continued to support reductions more than 90% of the time when their own party was in power.

Typically, politicians “are in the enviable position of being able to promise public workers and their unions much-valued benefits without having to pay the true costs,” Moe and Anzia argue. “This is an alluring political calculus that knows no party lines.”

Ya don't say.

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  #757  
Old 09-10-2013, 07:57 PM
extrovertedactuary extrovertedactuary is offline
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MPC-

I find your posts very informative, but the potential collapse of the system makes me really sad. Keep them coming!
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  #758  
Old 09-10-2013, 10:00 PM
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Yeah, I'm feeling really chipper about all this.

I think my supply of such stories will end either with my death or the Second Coming.

So I've got that going for me.
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  #759  
Old 09-12-2013, 05:45 PM
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RHODE ISLAND

http://www.providencejournal.com/bre...al-returns.ece

Quote:
WARWICK — Two years after poor investment returns convinced the State Retirement Board to lower its expectations for the state pension fund, a new audit is raising the possibility that even the reduced assumptions on market returns may be too optimistic.

The audit by Cheiron, an actuarial services firm based in McLean, Va., looks at recent reports and studies provided by the state’s pension consultant, Gabriel Roeder Smith & Company, giving their work positive reviews.

But in its recommendations, the Cheiron team — citing conclusions in a recent Gabriel Roeder Smith & Company study — says the board should “consider lowering” its assumed 7.5-percent rate of return because there is only a 40-percent chance the yields will be that good over a 20-year period.

Asked at the Retirement Board meeting Wednesday how low the assumed rate of return would have to go for the $7.7-billion fund to have a 50-percent probability of yielding its expected returns, Cheiron’s presenters said they did not attempt to calculate that number.

They did say, however, say that public officials across the country have been reducing their assumptions in an attempt to reduce the risk that returns will be lower than expected and leave their plans short of cash.
.....
The last reduction, approved by the Retirement Board in April 2011, lowered the assumed rate of return from 8.25 percent to 7.5 percent. In the process, it raised the unfunded liability for teachers and state employees by more than $150 million, and it also jacked up the projected taxpayer contributions to the fund. For fiscal 2012, taxpayer contributions toward state employee and teacher pensions were expected to rise more than $156 million.
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  #760  
Old 09-12-2013, 06:09 PM
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This:

Quote:
Originally Posted by Cheiron/GRS
But in its recommendations, the Cheiron team — citing conclusions in a recent Gabriel Roeder Smith & Company study — says the board should “consider lowering” its assumed 7.5-percent rate of return because there is only a 40-percent chance the yields will be that good over a 20-year period.

Asked at the Retirement Board meeting Wednesday how low the assumed rate of return would have to go for the $7.7-billion fund to have a 50-percent probability of yielding its expected returns, Cheiron’s presenters said they did not attempt to calculate that number.
cries out for WWWSituation

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