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Houston Mayor Announces Plan to Cut Pension Benefits, Issue Bonds
"[The mayor] announced benefit reductions in the three pension funds would reduce total liabilities by $2.5 billion, and the city would also issue $1 billion in pension obligation bonds, $750 million of which would be contributed to the police officers' pension system and $250 million of which would be issued to the municipal employees pension system." (Pensions & Investments)

Teacher Pension Costs Are Crowding Out Education Spending
"Almost every state increased retirement benefits for teachers in the booming 1990s ... By 2003, the funding for teacher pension plans overall was short by $235 billion; and by 2009, pension debt had more than doubled, to $584 billion.... [P]ension debt per pupil ... increased by an inflation-adjusted $9,588 between 2000 and 2013.... Retirement costs per pupil are already approaching 10% of all education expenditures." (Manhattan Institute for Policy Research)

[Official Guidance] Text of GASB Exposure Draft of Proposed Implementation Guide: Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans
129 pages. "The objective of this Implementation Guide is to provide guidance that clarifies, explains, or elaborates on the requirements of Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans.... The requirements of this Implementation Guide apply to the financial statements of all state and local governments." (Governmental Accounting Standards Board [GASB])

[Opinion] Are Public Pensions Bulletproof?
"Loyalton has been thrust onto center stage of America's public pension drama and this showdown is raising the possibility that California's pension promise is not absolute. This is particularly worrisome given California's pension gap is widening and could bring about major changes to public sector pensions there. And while Loyalton lacks the resources to fight CalPERS, if other cases develop ... don't be surprised if we get massive class action lawsuits (think Erin Brockovich) against retirement systems all over the United States." (Pension Pulse)

Union Appeal Focuses Attention on Public Employee Pension Precedent
"A decision by four Marin County public-employee associations to appeal a pension-related case to the California Supreme Court could ultimately determine whether localities have the tools needed to rein in escalating pension debt. At issue is how far officials can go to reduce some benefits for current employees after a state appeals court has chipped away at a legal 'rule' long favored by the state's unions." (Cal Watchdog)

Public Pension Cost-of-Living Adjustments Among the 50 States (PDF)
15 pages. "Public pension COLAs have received increased attention as many states look to make adjustments to the cost of benefits amid challenging fiscal conditions and the current low-inflationary environment. This brief presents a discussion about the purpose of COLAs, the different types of COLAs provided by government pension plans, and an overview of recent state changes to COLA provisions." (National Association of State Retirement Administrators [NASRA])

Wilkes-Barre to Receive Aid for Municipal Pension Plans
"Wilkes-Barre is one recipient of aid in a new round of state payments to municipal pension plans, but the payment is expected to only cushion the expected shortfall in the 2017 budget. Pennsylvania Auditor General Eugene DePasquale this week announced the distribution of $271 million in annual payments to nearly 1,500 pension plans for municipal employees, police and firefighters." (The Citizens' Voice)

2016 Public Pension Funding Study (PDF)
"As of June 30, 2016, the aggregate funded ratio is estimated to be 69.8% ... Plan sponsors continue to reduce interest rate assumptions in the expectation that returns over the coming decades will be lower. The difference between the average sponsor-reported assumption of 7.50% and our independently determined assumption of 6.99% is the highest we have seen, indicating that pressure to reduce interest rate assumptions is unlikely to abate." (Milliman)

Employee Contributions to Public Pension Plans (PDF)
"[N]early all employees of state and local government are required to share in the cost of their retirement benefit.... [By] providing a consistent and predictable stream of revenue ... contributions from employees fill a vital role in financing pension benefits. In the wake of the 2008-09 market decline, employee contribution rates in many states have increased. This issue brief examines employee contribution plan designs, policies and recent trends." (National Association of State Retirement Administrators [NASRA])

An Overview of the Pension/OPEB Landscape
"This paper provides a comprehensive accounting of pension and OPEB liabilities for state and local governments and the fiscal burden that they pose. The analysis includes plans serving more than 800 entities: 50 states, 178 counties, 173 major cities, and 415 school districts related to the sample of cities and counties.... The cost analysis calculates, separately, pension and OPEB costs as a percentage of own-source revenue for states, cities, and counties. It then combines pension and OPEB costs to obtain the overall burden of these programs." [Data figures (XLS) also available.] (Center for Retirement Research at Boston College)

Detroit Retirees' Effort to Restore Pension Fails
"A federal appeals court on Monday rejected a challenge to cuts in Detroit pensions, saying a plan that helped bring the city out of the largest municipal bankruptcy in U.S. history must not be disturbed.... Some retirees sued, saying they deserve the pension that was promised before Detroit filed for bankruptcy in 2013. Thousands saw their pension cut by 4.5%; annual cost-of-living increases were eliminated." (Detroit Free Press)

Quarterly Survey of Public Pensions: Second Quarter 2016
"This report provides national summary data on the revenues, expenditures and composition of assets of the largest defined benefit public employee pension systems for state and local governments. This report produces three tables: Tables 1 and 3 include data on cash and security holdings and Table 2 provides data on earnings on investments, contributions and payments." (U.S. Census Bureau)

A Better Way to Measure the Danger of State and Local Governmental Pension Debt
"It's important to think about how cities will cover their unfunded pension liabilities. But when we talk about how pensions affect financial health, the far more important question is how does a region decide to manage its tax base and the overlaps that inevitably exist?" (Governing)

Standards and Metrics for Public Retirement Systems (PDF)
20 presentation slides. "What does heightened risk suggest for policy and what might it portend for behavior? For policy, ... it means we need more disclosure of risk to those who bear risk, to those who act on risk-bearers' behalf ... If deciders decide long-term risks are too high, could lead to: [1] Lower assumed returns; [2] Allocation away from riskier assets... [3] Substantially higher contribution requests; [4] Certain and substantial crowding out now (services, taxes), rather than risk of greater (or lesser) crowding out later." (The Pew Charitable Trusts and the Urban Institute)

Puerto Rico Pension Fund Joins Lawsuit Against UBS Over Muni Bonds
"UBS served as a major banker for the U.S. territory, which has been defaulting on a growing share of its debt and has been placed under federal financial oversight. The bank was able to legally serve as an adviser, underwriter and bond-fund manager even though such multiple roles are barred on the mainland because of the conflicts of interest." (Bloomberg)

In a First, CalPERS May Cut Small Town's Pensions
"A CalPERS crackdown on employers that have not been paying into the pension fund could cut the pensions of all four retirees of a small Sierra County city, Loyalton, which stopped making its payments more than three years ago. It would be the first time that CalPERS used its power to cut pensions, in proportion to the payment not made by the employer, after a plan is terminated and closed to new members, a CalPERS spokesman said." (Calpensions)

'This Is Becoming a Moral Issue': Officials Face Truth Behind Oregon's Soaring Pension Costs
"Just how bad is Oregon's public pension funding crisis? Bad enough that Rukaiyah Adams, the normally polished investment professional who is vice chair of the Oregon Investment Council, broke down in tears last week as she spoke of passing a record $22 billion in unfunded promises to future taxpayers.... Experts openly acknowledged they're understating the magnitude of Oregon's problem." (The Oregonian)

California Decision Called 'Existential Threat' to Pensions
"Reformers hailed the decision in a Marin County case last month as a long-sought way, if upheld by the state Supreme Court, to control runaway costs by cutting pension amounts current workers earn in the future, while protecting pension amounts already earned.... [T]he CalSTRS board was given a broader interpretation of the ruling by its fiduciary counsel, ... [who] seemed to suggest the ruling might open the door for cuts in pension amounts already earned." [Marin Assoc. of Public Employees v. Marin County Employees' Ret. Assoc., No. A139610 (Cal. Ct. App. 1st Dist. Aug. 17, 2016; certified for pub.)] (Calpensions)

How a Pension Deal Went Wrong and Cost California Taxpayers Billions
"Proponents sold the measure in 1999 with the promise that it would impose no new costs on California taxpayers. The state employees' pension fund, they said, would grow fast enough to pay the bill in full. They were off -- by billions of dollars -- and taxpayers will bear the consequences for decades to come. This year, state employee pensions will cost taxpayers $5.4 billion ... That's more than the state will spend on environmental protection, fighting wildfires and the emergency response to the drought combined." (Los Angeles Times)

A Sour Surprise for Public Pensions: Two Sets of Books
"CalPERS ... keeps two sets of books: the officially stated numbers, and another set that reflects the 'market value' of the pensions that people have earned. The second number is not publicly disclosed. And it typically paints a much more troubling picture[.]" (The New York Times; subscription may be required)

Calif. Governor Signs Bill to Boost Pension Fund Fee Disclosure
"Private equity and hedge funds must disclose the fees they charge to California's public pension funds under a bill signed by Gov. Jerry Brown (D) Sept. 14. [The law] is intended to boost transparency about investment costs for [CalPERS and CalSTRS]. The new law also applies to city and county retirement systems, the University of California Retirement System and other independent public retirement systems." (Bloomberg BNA)

Consumer Protection Comparison of the Federal Pension System and the State Insurance System
68 pages. "When an employer de-risks its pension plan by purchasing one or more annuity contracts, consumer protections for affected individuals shift from the pension system to the insurance system. From a consumer-protection perspective, how does that shift affect the relative levels of protection? ... [T]he two systems employ different methods of protections that have different features and formulas, but both provide strong, time-tested protection of future pension or annuity benefit payments." (National Organization of Life and Health Insurance Guaranty Associations [NOLHGA])

Drop in Funding Levels of City and County Retirement Systems in Fiscal Year 2015 (PDF)
"For the 99 city and county retirement systems that reported actuarial data for 2015, pension assets grew by 0.4%, or $1.9 billion, from $451.1 billion in 2014 to $453.0 billion in fiscal 2015, while liabilities grew 5.9%, or $35.7 billion, from $600.5 billion in 2014 to $636.2 billion in 2015. These 99 plans saw their aggregate shortfall increase $33.7 billion over fiscal year 2015 from -$149.5 billion to -$183.2 billion." (Wilshire Associates)

An Examination of State Pension Fund Performance: 2006-2015
13 pages. "While capital markets largely drove returns for state pensions ... a wide range of 10-year return outcomes [exists] among state pensions, most of which is attributable to implementation (fund/manager selection) rather than differences in asset allocation.... [F]und/manager selection by state pensions, in aggregate, has been accretive to return over the study period. [T]he role of investments in helping solve pension underfunding will largely be determined by the future health of the capital markets, particularly for equity securities." (Cliffwater LLC)

What Role Can Annuities Play in Easing Risks in Public Pension Plans? (PDF)
36 pages. "This paper considers the role that annuities might play in providing a secure retirement to public employees. It finds that: [1] Public DB pensions are highly cost efficient.... [2] Public DB pension plans provide significant consumer protections in state law, while annuities have different consumer protections in state regulation and insurance law.... [3] Longevity annuities focus on the insurance value and are less expensive than fixed income annuities." (National Institute on Retirement Security [NIRS])

Hedge Fund Capacity May Be Factor in Pension Plan Pullback
"Large public plans -- those with $100 billion or more to invest -- typically have strategies to put 10 percent or more of their portfolio into hedge funds.... Investment managers for these plans, however, may be having difficulty finding a sufficient array of top-flight hedge fund managers in which to invest this money ... Sometimes ... these funds decide that taking in additional dollars will harm their investment returns. Consequently, they stop taking new money once the fund determines that it has reached its investment capacity[.]" (Bloomberg BNA)

[Opinion] Public Pensions Work -- and These Three Systems Prove It
"This report will examine three of the most successful public pension systems in the country. These three pension plans offer a roadmap to success for other pension systems looking to provide a secure retirement for their public employees. While each is unique, their common commitment to sound funding practices and responsible management ensures that the retirees of these systems can enjoy the dignified retirement they deserve." (National Public Pension Coalition)

State Pension Funds Showed Annualized 6.8% Median Return over 10-Year Period
"The 6.8% median return fell within a wide range of individual pension fund returns -- between 4.8% and 8.4%.... [T]he best-performing state plan outperformed the lowest-returning fund by a cumulative 63.8 percentage points over the 10-year period. The best performing fund was the $13.8 billion Oklahoma Teachers' Retirement System, Oklahoma City, which returned 8.3% for the 10 years ended June 30, 2015." (Pensions & Investments)

Chicago Mayor Tries to Prove Tax Plan Sufficient to Save Pension Fund
"Mayor Rahm Emanuel released an actuarial analysis in hopes of proving to aldermen that his 29.5 percent tax on water and sewer bills will be enough to save the largest of Chicago's four city employee pension funds.... Civic Federation President Laurence Msall said ... the infusion of $1 billion in new revenue from the new utility tax by 2023 will put the city's largest pension fund in a 'significantly better place.' But Msall noted that even with that windfall ... the condition of the pension fund will continue to drop over the next five years with 'more benefits going out than coming in.' " (Chicago Sun-Times)

Illinois Pension Crisis Builds as Market Turmoil Deals a Setback
"The state with the least-funded retirement system in the U.S. may see next year's contributions jump by nearly half a billion dollars after its largest pension, the Teachers' Retirement System, reduced the assumed rate of return on its portfolio.... Moody's Investors Service said the change added $7.4 billion to Illinois's debt to the fund[.]" (Bloomberg)

Seasonal Workers May Affect Health and Retirement Benefit Obligations
"The number of seasonal workers you hire may impact whether your agency is subject to certain ACA obligations.... [S]easonal workers may be entitled to paid sick leave under California's Healthy Workplaces, Healthy Families Act.... [W]hen the employer hires an employee who is already a member of [the California Public Employees' Retirement System (CalPERS)], the employee must be enrolled in membership with the employer, even if a seasonal worker. In addition, if full-time employment has a fixed term of more than six months, or more than one-year for a part-time employment (an average of at least 20 hours per week), the employee is entitled to membership." (Liebert Cassidy Whitmore)

Some Public Funds Uneasy with Fee Disclosure
"Measures in several states focusing on alternative investment fee disclosure are causing public pension plan executives to worry they could get shut out of the best funds if managers are unhappy with the requirements." (Pensions & Investments)

Public Pensions and Social Security, by State: Where Do Employees Get Both?
"The theory is that for public employees not covered by Social Security their government pensions should be higher (as should the amount they contribute towards their pension). Since we have the raw data from actuarial reports and have now found a website that lists states where public employees are not covered by Social Security ... we can test that theory. As it turns out the top eight states where retirees receive the largest average payouts are all [on the list of those not covered by Social Security]." (Burypensions)

[Opinion] Are U.S. Public Pensions Crumbling?
"Declining or negative rates will effectively mean soaring pension liabilities.... [T]he duration of pension liabilities (which typically go out 75+ years) is much bigger than the duration of pension assets so any decline in rates will disproportionately and negatively impact pension deficits no matter what is going on with risk assets like stocks, corporate bonds and private equity.... Stop focusing on assets and focus on growing liabilities in a deflationary world where people are living longer and introduce risk-sharing and better governance at your public pensions." (Pension Pulse)

[Opinion] Society of Actuaries to Publish Controversial Report on Public Pension Plan Financing
"Working under the auspices of both our organization and the American Academy of Actuaries, we were unable to reach an agreement with the authors on a version acceptable to all parties through our standard editing process. Nevertheless, on Thursday, Aug. 25 ... [the SOA] informed the authors of the paper of our plans to publish the paper representing their views in the SOA's Pension Forum publication. The publication is anticipated by the end of October[.]" (Society of Actuaries)

[Opinion] The Trillion Dollar State Pension Fund Gap?
"[S]witching to a DC pension plan won't stop the pension Titanic from sinking, it will only accelerate widespread pension poverty and increase social welfare costs (and the national debt).... [A recent report from Pew Charitable Trusts] gives us a snapshot of state pension funding gaps using the net amortization measure (and even that is deficient because they use their own assumed discount rates), but if offers little in terms of insights and policies that will improve retirement security in the United States." (Pension Pulse)

[Opinion] Covering Up the Public Pension Crisis
"On Aug. 1, the American Academy of Actuaries and the Society of Actuaries shut down a 14-year-old task force on pension financing when several members were about to publish a paper that found many state and local retirement systems calculate their obligations using overly optimistic future rates of return. The authors want states and municipalities to adopt new valuation standards that would make projecting the cost of future benefits more predictable. The problem is that this change would also make many public pension funds seem far more indebted than they are under current standards." (The Wall Street Journal; subscription may be required)

Puerto Rico's Pensions: $2 Billion in Assets, $45 Billion in Liabilities
"Puerto Rico's constitution calls for the island to pay its general-obligation bonds ahead of public services or pensions, but a law signed by President Barack Obama in June clouds that hierarchy by directing the new board to ensure pensions are adequately funded.... Cutting payouts to debtholders ahead of pensions will inflame creditors, but cutting pension payments to plan members could accelerate the migration and economic decline that the oversight board is tasked with stemming." (The Wall Street Journal; subscription may be required)

The State Pension Funding Gap in 2014: New Accounting Rules Provide Clearer Picture
"The nation's state-run retirement systems had a $934 billion gap in fiscal year 2014 between the pension benefits that governments have promised their workers and the funding available to meet those obligations. That represents a $35 billion decrease from the shortfall reported for fiscal 2013.... When combined with the shortfalls in local pension systems, this estimate reaches more than $1.5 trillion for fiscal 2015 and will likely remain close to historically high levels as a percentage of [U.S. GDP]." (The Pew Charitable Trusts)

Funding for State Pension Funds Improves in 2014
"Among the 50 states, South Carolina, Oregon, Wisconsin, Tennessee and North Carolina posted the highest funding ratios at 107%, 104% 103%, 99% and 99%, respectively. Illinois, Kentucky, New Jersey, Connecticut and Alaska reported the lowest funding ratios at 41%, 41%, 42%, 51% and 60%, respectively." (Pensions & Investments)

Can Dallas Police and Fire Pension Fund Be Saved?
"The pension system ... is hurtling toward insolvency by 2030. The fund has $3.27 billion in unfunded liabilities and less than $2.7 billion in assets -- a funding ratio of 45 percent.... [T]he Deferred Retirement Option Program [DROP] ... gave recipients an 8 percent to 10 percent annual return even while the system earned significantly less.... That makes up $1 billion of the fund's money.... The plan will trim cost-of-living increases, base payments on a five-year highest-salary average rather than three years, and raise all members' contributions to 9 percent." (The Dallas Morning News)

State Court Rules California Can Trim Current Public Employees' Retirement
"In a potential game-changer for pension reform advocates, the state Court of Appeal has ruled that the Legislature can trim public employee retirement benefits for workers who are still on the job. The unanimous decision ... rejects widely held assumptions that benefits cannot be reduced once employees start working. That constraint has hindered attempts statewide, and in charter cities such as in San Jose, to meaningfully stem soaring taxpayer costs for pensions." [Marin Assoc. of Public Employees v. Marin County Employees' Ret. Assoc., No. A139610 (Cal. Ct. App. 1st Dist. Aug. 17, 2016; certified for pub.)] (Daniel Borenstein, via East Bay Times)

Connecticut Treasurer Calls for Re-Evaluation of Pension Returns
"Connecticut Treasurer Denise Nappier said the 0.35 percent return posted by the state's $29 billion retirement system in the year that ended in June underscores the need to adopt more realistic investment assumptions. The teachers' and state employees' funds, Connecticut's two biggest pensions, target an 8 percent annual return." (Bloomberg)

California Appellate Court Pension Decision Weakens 'California Rule'
"Last week, an appeals court issued a ruling in a Marin County case that is a 'game changer' if upheld by the state Supreme Court ... Justice James Richman of the First District Court of Appeal wrote that 'while a public employee does have a 'vested right' to a pension, that right is only to a 'reasonable' pension -- not an immutable entitlement to the most optimal formula of calculating the pension. 'And the Legislature may, prior to the employee's retirement, alter the formula, thereby reducing the anticipated pension. So long as the Legislature's modifications do not deprive the employee of a 'reasonable' pension, there is no constitutional violation.' " [Marin Assoc. of Public Employees v. Marin County Employees' Ret. Assoc., No. A139610 (Cal. Ct. App. 1st Dist. Aug. 17, 2016; certified for pub.)] (Calpensions)

[Guidance Overview] GASB 73: Implementation and Overview (PDF)
"New accounting rules for public postretirement benefit plans in the United States are set to take effect soon. Successful implementation of the new rules will require an understanding of a variety of technical concepts regarding the various newly required calculations." (Milliman)

[Opinion] The $6 Trillion Pension Cover-Up?
"Pension deficits are path dependent, which in effect means the starting point matters a lot as do investment and other decisions along the way. If a pension plan is already underfunded below the 80% threshold (i.e., assets cover 80% of liabilities) many consider to be manageable, then taking more investment risk at a time when assets are fairly valued or over-valued can lead to a real disaster, a point of no return where the only thing left is to ask taxpayers to bail them out or introduce cuts to benefits and increases to contributions." (Pension Pulse)

Maryland Pension System Misses Earnings Target
"Maryland's public pension system missed its annual target for returns by more than six percentage points in fiscal 2016, marking the second consecutive year that the retirement program fell short of its goal. The $45.5 billion investment portfolio earned 1.16 percent after fees for the fiscal year that ended June 30, well below the fund's annual objective of 7.55 percent ... In 2015, growth was 2.68 percent." (The Washington Post; subscription may be required)

[Opinion] The $6 Trillion Public Pension Hole That We're All Going to Have to Pay For
"U.S. state and local employee pension plans are in trouble -- and much of it is because of flaws in the actuarial science used to manage their finances. Making it worse, standard actuarial practice masks the true extent of the problem by ignoring the best financial science -- which shows the plans are even more underfunded than taxpayers and plan beneficiaries have been told. The bad news is we are facing a gap of $6 trillion in benefits already earned and not yet paid for, several times more than the official tally." (MarketWatch)

Public Pension Cuts Upheld by Sixth Circuit -- Again
"The court found that the Kentucky legislature didn't contractually bind itself to provide COLAs at specified levels, which defeated the pensioners' arguments under the Contract Clause. The Sixth Circuit said it was following the majority position on this question, noting that only in 'very limited circumstances' have courts found that state pensioners had a contractual right to specific COLA levels." [Puckett v. Lexington-Fayette Urban Cty. Gov't, No. 15-6097 (6th Cir. Aug. 15, 2016)] (Bloomberg BNA)

Dissident Actuaries Want to Show Big Pension Debt
"Two actuarial associations did not publish a controversial paper by their joint task force, reflecting a split in the profession over whether public pension debt should be measured with risk-free bonds or the earnings forecast for stock-laden investment funds.... Although not as well publicized as criticism from outside the profession, a group of actuaries has been urging the adoption of a risk-free discount rate for about a decade, said Paul Angelo of Segal Company ... For the first time, Angelo said, the actuaries urging a risk-free discount rate went beyond simply reporting debt and seemed to be advocating its use to set the annual payments to the pension fund made by government employers." (Calpensions)

Chicago Teacher Pension Fund Overpaid 234 Retirees, Wants Its Money Back
"[T]he pension fund's administrators miscalculated benefits for the 234 retirees and mistakenly gave them lump-sum payments ranging from $566 to $217,185 as back pay between 2012 and 2014, when the error was discovered ... [R]etirees were contacted last year and told they had to return the money either by paying the amount back in full or in monthly increments through reduced pension payouts until the money was repaid." (Chicago Sun-Times)

Public DB Plans Adding Risk to Combat Funding Crisis as Contributions Rise
"[J]ust less than 65% of total investible public DB assets were invested in equity-like investments in 2015, down from a high of about 65% in 2013 but up from where it was in each of the previous five decades (roughly 60% in 2005, 54% in 1995, 30% in 1985, 19% in 1975 and 7% in 1965).... In 2014, total state and local government pension contributions fell $16.5 billion short of actuarially required contributions, with 33 plans underpaid by $100 million or more[.]" (Pensions & Investments)

[Guidance Overview] A Closer Look at the Restrictions on Hiring a Retired CalPERS Annuitant
"[T]he general rule is that an agency cannot hire a retired annuitant to work for your agency without reinstating that individual back into CalPERS.... The two common exceptions are found in Government Code sections 21221(h) and 21224.... [W]hen an agency is utilizing either one of these exceptions, it must be aware of the strict and complicated requirements associated with these exceptions." (Liebert Cassidy Whitmore)

Chicago Bonds Gain as City Plans Tax Hike to Fix Biggest Pension
"Without the fix, the fund that serves more than 70,000 workers and retirees is on track to run out of money within a decade. Less than a day after [Mayor Rahm] Emanuel laid out the plan at Chicago's investor conference, the municipal market applauded the proposal." (Bloomberg)

[Opinion] Chicago: Are Pitchforks and Torches on the Way?
"[T]he sad reality is while these taxes might help at the margin, they're not going to make a big difference unless they are accompanied by a change in governance, higher contributions and a cut in benefits (get rid of inflation protection for a decade!). There's an even bigger problem ... chronic public pension deficits are deflationary." (Pension Pulse)

Public Pensions Face Worst Returns Since Great Recession
"The slim earnings for fiscal 2016, which ended June 30 for most plans, is well below the average earnings target of about 7.5 percent. It also marks the second year in a row that plans have missed the assumed rate of return: Most reported an investment gain between 2 percent and 4 percent in fiscal 2015." (

Chicago Seeks Tax Hike to Avert Pension Fund Insolvency
"The city wants to raise the levies on water and sewer bills to shore up the Municipal Employees' Annuity and Benefit Fund of Chicago, the most underfunded of the four pensions ... Without changes, the pension that serves more than 70,000 workers and retirees is on track to run out of money within a decade.... The plan would boost Chicago's payments to the fund by no less than 30 percent over five years starting with the 2017 contribution. New employees will have to pay 3 percent more to their pensions, and employees hired after Jan. 1, 2011, have the option to retire earlier, but will have to contribute more to their retirement fund." (Bloomberg)

Actuarial Leaders Disband Task Force, Object to Paper on Public Plan Liabilities
"The American Academy of Actuaries and the Society of Actuaries Monday abruptly disbanded its longtime joint Pension Finance Task Force, objecting to a task force paper challenging the standard actuarial practice of valuing public pension plan liabilities.... One product of the task force was the paper, 'Financial Economics Principles Applied to Public Pension Plans,' which has not been published or posted.... The paper, written by four members of the task force ... calls for measuring public plan liabilities using risk-free interest rates." (Pensions & Investments)

Pennsylvania Auditor General to Examine State Employee Retirement Funds
"Auditor General Eugene DePasquale says one of the things his office will examine is the use of outside investment advisers by the State Employees Retirement System and the Public School Employees Retirement System. The auditor general says those advisers can't even beat conservative stock index funds." (CBS Philly)

Cook County Pension Liability Skyrockets from $6 to $15 Billion
"Cook County, Illinois -- which includes Chicago -- was just forced by its actuaries to restate its unfunded pension liability from $6 billion to $15.3 billion.... To put the importance of this stunning change of financial solvency in perspective, the entire annual payroll for all 22,000 Cook County employees is about $1.5 billion. That means that the pension plan's shortfall is ten times the annual payroll." (Breitbart)