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Preview: Government plans - state and local - misc (BenefitsLink.com)

Government plans - state and local - misc (BenefitsLink.com)



Headlines re Government plans - state and local - misc, gathered by BenefitsLink.com



 



[Opinion] The Dallas Pension Fiasco Is Just the Beginning
"It's tempting to see the generous pension structure and bad investment decisions in Dallas as making it a special case. Detroit was seen by many as a special case when it went into bankruptcy in 2013 as it had seen its population fall by 25% in a decade.... Growing debt and pension obligations are signs of what is to come for many local and state governments who have been living beyond their means for decades." (ValueWalk)



[Opinion] Environmentalism Provides Moral Cover for New Taxes to Fund Pensions
"There are two intertwined themes that define unionized government in California. First, funding government retiree pensions will soak up every new source of tax revenue they will ever collect. Second, cloaking new taxes and fees -- and new agencies -- in the virtuous raiment of environmentalism will deflect criticism and demonize critics." (PensionTsunami)



[Opinion] Future of California Pension Reform Now Up to State Supreme Court
"Two appellate courts recently ruled that state lawmakers may alter retirement benefits for current employees.... That's a radical departure from decades of rulings suggesting pension benefits could not be reduced.... Whether the Supreme Court agrees will profoundly affect California lawmakers' ability to slow soaring retirement costs strangling state and local governments. It also might enable practical unions to negotiate changes for current employees, depending upon how broad the decision is." (San Jose Mercury News)



California State Pension Costs Doubled After Rate Increases
"State payments to CalPERS next fiscal year are expected to total $6 billion, nearly double the $3.2 billion paid six years ago before a wave of employer rate increases.... [S]tate payments to CalSTRS for the fiscal year beginning in July are expected to be $2.8 billion, nearly double the $1.5 billion paid three years ago when a rate increase began. Meanwhile, what had been the fastest-growing annual retirement cost in the budget, retiree health care for state workers, only increased by about half during the last six years, going from $1.5 billion in fiscal 2011 to $2.2 billion next year." (Calpensions)



NCPERS Public Retirement Systems Study, 2016 (PDF)
39 pages. "Responding funds report the total cost of administering their funds and paying investment managers is 56 basis points ... a decrease of four basis point from 2015.... Almost 40 percent of responding funds have lowered their actuarial assumed rate of return, and nearly an additional 30 percent are considering lowering in the future.... Aggregated 10-year returns are reported at 6.2 percent.... The aggregated average funded level is 76.2, up from 74.1 in 2015 and 71.5 in 2014." (National Conference on Public Employee Retirement Systems [NCPERS])



How Public Pension Plan Investment Risk Affects Funding and Contribution Risk (PDF)
"[The authors] modeled the finances of [a] prototypical pension fund over thirty years, assuming that employers pay full actuarially determined contributions.... [P]lans faced a fundamental trade-off ... If they moved into riskier assets, the risk to the pension fund would increase significantly but government contributions would remain low.... If instead ... the plan lowered assumed investment returns, the risk to the pension fund would remain minimal, but employer contributions would have to triple, and would stay high for all thirty years of the simulation period." (Rockefeller Institute of Government)



A Second California Court Says Public Employee Pension Set at Hire Can Be Cut
"A second appeals court panel has unanimously ruled that the public pension offered at hire can be cut without an offsetting new benefit, broadening support for what pension reformers call a 'game changer' if the state Supreme Court agrees.... The two appeals court rulings are contrary to previous rulings known as the 'California rule': The pension offered at hire becomes a vested right, protected by contract law, that can only be cut if offset by a comparable new benefit, erasing any savings." [Cal Fire Local 2881 v. California Public Employees' Retirement System (CalPERS), No. A142793 (Cal. Ct. App. Dec. 30, 2016)] (Calpensions)



Dallas Police and Fire Pension Members May Have to Pay Back Funds
"The city has agreed to put in an additional billion dollars over 30 years, but they're proposing a series of bitter pills to make up the rest of the nearly $4 billion shortfall. The bitterest pill: A proposal to take back all of the interest police and firefighters earned on Deferred Option Retirement accounts, or DROP. That would amount to an additional billion dollars saved." (WFAA)



[Opinion] Pension Obligation Bonds: Portents of Bankruptcy
"It is no coincidence that the worst funded public pension systems (NJ, IL, CT, PR) all tried the [pension obligation bond (POB)] gambit not because it made any fiscal sense but because they chose not to look at immediately unpleasant alternatives (i.e. cutting benefits or affording honest contribution amounts). The POB money suddenly appeared in trust assets making the plans seem better funded which would theoretically reduce future contributions. In practice, in New Jersey at least, future contributions were reduced anyway as politicians simply chose to pick their contribution numbers with expediency as the primary determinate." (Burypensions)



Pension Obligation Bonds No Long-Term Fix for Public Pensions (PDF)
"Bond proceeds have been most frequently used to shore up pension funded ratios, effectively substituting a debt for a pension liability.... [S]tructural pension reform [is] the most prudent and creditworthy approach to addressing the growing liability, and the issuance of POBs can be merely a tactic that delays a long-term solution." (Standish)



California Court Upholds 2013 Law That Cut Buying Pension Credits
"The lawmakers' action in eliminating the right of public employees to buy additional retirement credits was 'wholly reasonable' and did not violate any binding promises made to the employees, the [court said] ... A lawyer for a firefighters union that challenged the law said it would probably seek review by the state Supreme Court, which has already agreed to consider another case cutting back on public pensions.... [The] case affects a pension system for 1.6 million state and local employees, although the ruling deals only with those who were employed when the law took effect in 2013[.]" [Cal Fire Local 2881 v. California Public Employees' Retirement System, No. A142793 (Cal. Ct. App. Dec. 30, 2016)] (San Francisco Chronicle)



Pennsylvania Governor Proposes New Retirement System Compromise
"The proposed plan includes a mandatory, 401(k)-style plan for all new employees making at least $75,000 annual income. In addition, all employees could be given the option to participate only in a defined contribution plan at their time of hire. The plan also features a risk-sharing component for all new employees.... The $51.7 billion Pennsylvania Public School Employees' Retirement System and $27.6 billion Pennsylvania State Employees' Retirement System ... together have an unfunded liability of $60.1 billion." (Pensions & Investments)



When City Retirement Pays Better Than the Job
"[A] coterie of former El Monte civil servants [receive] one taxpayer-funded pension through [CalPERS] -- and a second through a 'supplemental' plan approved by the city council in 2000. The extra pensions, along with other sweeteners granted to El Monte employees over the years, have created one of the heaviest public pension burdens of any city in California ... El Monte's retirement costs totaled $16.5 million this year. That's equal to 28% of the city's general fund." (Los Angeles Times)



State And Local Pension Reform Since the Financial Crisis
"74 percent of state plans and 57 percent of large local plans have cut benefits and/or raised employee contributions to curb rising costs. While the majority of state and local plans reduced benefits for new employees only, 25 percent also cut benefits for current employees. The two most common benefit reductions for current employees were increases in employee contributions and reductions to the COLA.... Plans more likely to make cuts had the highest annual required contribution (ARC) as a percentage of revenue or had lower employee contributions." (Center for State & Local Government Excellence)



Committee Will Recommend Vermont Create State-Sponsored Retirement Plan for Private Sector Workers
"45 percent of Vermont businesses, employing a total of 104,000 people, don't offer workers access to a retirement plan.... State Treasurer Beth Pearce who chairs the Public Retirement Study Committee says the group will recommend that lawmakers create a public plan for businesses with fewer than 50 employees that currently don't have a way for workers to invest in their retirement." (Vermont Public Radio)



State University Is an Arm of the State, Therefore Immune from FMLA Suit
"The employee rejected the offer to be placed in an inferior position, and filed suit under the FMLA's self-care and retaliation provisions.... The district court rejected MSU's motion to dismiss her federal claim based on Eleventh Amendment immunity, finding that the university is not an alter ego of the state and so can be sued in federal court. Applying the fact-intensive, co-equal Fitchik factors -- which differ slightly from the analogous factors considered by its sister circuits -- the Third Circuit reversed in what it deemed a 'close case.' " [Maliandi v. Montclair State Univ., No. 14-3812 (3d Cir. Dec. 27, 2016)] (Wolters Kluwer Law & Business)



Agencies Warn of Massive Ohio Public Pension Shortfall
"A year that began with Gov. John Kasich telling national TV viewers Ohio public pensions are rock solid ends with another independent, outside analysis warning of an approaching calamity in the retirement system.... Where [the American Legislative Exchange Council (ALEC)] sees a $331.5 billion shortfall, amounting to 58 percent of Ohio's total economic output, [the conservative Mercatus Center at George Mason University] sees a shortfall that consumes 51 percent of state GDP and gives all of the Ohio pension funds poor odds of actually paying retirees their full benefits." (The News-Messenger; subscription may be required)



Texas Pension Fund Takes Bold Step on Fees
"The $133.2 billion Austin-based defined benefit plan is the first to adopt a new fee structure developed by its hedge fund consultant, Albourne Partners Ltd. The objective of the fee formula is to ensure that the investor consistently retains 70% of the gross alpha returns of the hedge funds in its portfolio." (Pensions & Investments)



Contingency Planning for Clients Relying on Pensions
"If the pension is funded at 85% or less, there could be cuts in the future to the cost-of-living adjustment, for example, or to health benefits. In cases like this, where the client's current retirement planning is based on receiving 100% of their pension income, build in contingency plans where the client relies only on as little as 85% of their pension." (The Wall Street Journal; subscription may be required)



CalPERS Board Cuts Assumed Rate of Return to 7%
"Chief Investment Officer Theodore Eliopoulos said at last month's finance and administration committee meeting that given diminished investment return assumptions over the next decade, 6% was a more realistic return for the coming 10 years....CalPERS' current funding ratio is 68%. Two years of poor results -- a 0.6% return for the fiscal year ended June 30 and a 2.4% return in fiscal 2015 -- have contributed to a more negative view of what CalPERS can earn over the next decade." (Pensions & Investments)



New York Pension Fund Manager, Brokers Charged in Pay-To-Play Scheme
"U.S. prosecutors on [Dec. 21] accused a former portfolio manager at New York state's retirement fund, the third largest in the United States, of steering $2 billion in trades to two brokerage firms in exchange for gifts such as cash, drugs and prostitutes. Manhattan federal prosecutors announced charges centered on the New York State Common Retirement Fund, which was shaken by another pay-to-play scheme a decade ago that sent the state comptroller to prison and sent shock waves through the pension fund world." (Reuters)



[Opinion] U.S. Pension Funds Should Look North for Inspiration
"Despite being among the largest private equity investors, U.S. pension funds such as [CalPERS] and [CalSTRS] have been slow to transition from a hands-off approach to one that involves actively participating in select deals, a feature known in the industry as direct investing. The benefits of direct investing are lower (or sometimes no) fees and the potential to enhance returns, and that makes it an attractive proposition. But so far, U.S. pension funds have been pretty content as passive investors for the most part, writing checks in exchange for indirect ownership of a roster of companies but without outsize exposure to any." (Bloomberg)



CalPERS Poised to Lower Discount Rate Again, Increase Employer Contributions
"CalPERS' Finance and Administration Committee ... estimates that with a reduction in the rate of return to 7.25%, most employers could expect up to a 2% increase in the normal cost for miscellaneous plans, and up to 3% for safety plans. Should the rate of return be reduced to 7%, employers could expect an increase in the normal cost of up to 3% for miscellaneous, and up to 5% for safety plans." (Liebert Cassidy Whitmore)



CalPERS Votes to Expand Tobacco Investment Ban to External Managers and Affiliate Funds
"The Investment Committee [has] voted to remain divested from tobacco-related securities with respect to the internally managed public equity and debt portfolios of the Public Employees' Retirement Fund (PERF). In addition, the Committee has now broadened the tobacco investment restrictions to include the PERF's externally managed portfolios of publicly traded assets and the Affiliate Fund portfolios." (CalPERS)



[Opinion] In Illinois, 'Pension Reform' Is Siren Call
"The unfunded liabilities incurred to date are a permanent fixed cost that cannot be reduced. 'Pension reforms' intended to reduce that cost are a pipe dream. Benefits promised need to be paid. That is not to say that the public, press and pension administrators should not seek to stop pension abuse -- which usually happens through salary spikes that ultimately inflate pensions. Abuse also occurs by enrolling people who do not meet the eligibility requirements." (Louis Kosiba, Executive Director of the Illinois Municipal Retirement Fund, via Crain's Chicago Business)



How the DOL Fiduciary Rule Might Affect Governmental Plan Sponsors (PowerPoint)
24 presentation slides. "State and local government DC plans are not bound by ERISA and the DOL rules. But, it can be expected that providers of investment services will likely treat participants in government plans similarly to those in the ERISA covered plans." (National Association of Government Defined Contribution Administrators [NAGDCA])



America's Largest Pension Fund: A 7.5% Annual Return Is No Longer Realistic
"Top officers of [CalPERS] want to lower their investment targets, a move that would trigger more pain for cash-strapped cities across California and set an increasingly cautious tone for those who manage retirement assets around the country.... The last time the California system lowered its investment expectation was in 2012, when the rate was dropped to 7.5% from 7.75%." (The Wall Street Journal; subscription may be required)



Dallas Pension Fund Halts Payments Following Mayor's Lawsuit
"The Dallas Police and Fire Pension System's board has halted ... most payments and withdrawals from the Deferred Retirement Option Plan (DROP), a program that allows members who have passed retirement age to keep working and transfer their benefits into an account that has historically guaranteed a generous 8 percent rate of return. Nearly $500 million has been withdrawn from the DROP plan over the last few months when changes to the program were first floated." (Reuters)



[Opinion] U.S. State Pensions Need a Miracle?
"[T]he median state pension has had 74.5 percent of assets needed to meet promised benefits, down from 75.6 percent the prior year. Typically any figure close to 80% is considered fine to pension actuaries who smooth things out over a long period. But ... the structural headwinds pensions face, driven primarily by demographics but other factors too, are unlike anything in the past and looking ahead, the environment is very grim for US state pensions." (Pension Pulse)



[Opinion] Let's Scrap Pension Systems Altogether
"Dallas is not alone in the mismanagement of its pension fund that could leave taxpayers on the hook for a whopping $1.1 billion. Pension funds all over the country are going broke or bleeding profusely ... It's time to scrap pension funds for future workers and allow them -- actually, require them -- to set aside their own 401(k)-type accounts with contributions matched by employers. Let workers manage their own money as private employees around the country do every day." (National Center for Policy Analysis [NCPA])



How Public Pension Plan Demographic Characteristics Affect Funding and Contribution Risk (PDF)
"Approximately two-thirds of public pension funds' $3.7 trillion of assets are in investments other than cash and fixed income, and have volatile investment returns. Investment gains and losses become larger relative to payroll and government contributions... can become more variable, and plan funded ratios can become more volatile.... Growing plans with increasing numbers of workers are less susceptible to investment risk than are shrinking plans. Very mature plans with high assets relative to payroll and high cash outflows face greater funding risk, all else equal." (Rockefeller Institute of Government)



Dallas Mayor Sues Pension Board to Stop Withdrawals
"Dallas Mayor Michael S. Rawlings ... filed the lawsuit Dec. 5 in state court in Dallas in his personal capacity. He seeks a court order to temporarily restrict all withdrawals from the pension system's Deferred Retirement Option Plan (DROP) as 2016 outflows allegedly have greatly reduced the system's protected benefits. DROP is a program that allows eligible participants to simultaneously stay on the job with full pay while having their full retirement annuity paid into an interest-bearing account." (Bloomberg BNA)



2016 Retirement Confidence Survey of the State and Local Government Workforce (PDF)
25 pages. "One-third of public sector employees have been with their current employer for less than 10 years, and one-third for 20 years or longer.... Health insurance, retirement benefits, job security and salary are the most important job elements they would consider in deciding whether to switch employers. The vast majority are covered by a primary defined benefit pension plan; almost 20 percent of these workers reported changes to these benefits over the past two years. Two-thirds expect to receive retiree healthcare benefits from an employer when they retire; among these, one-quarter reported changes to their benefits over the past two years." (TIAA Institute, and the Center for State and Local Government Excellence)



Chicago Pension Reform Bills Stall as State Legislature Adjourns; Lame-Duck Vote Possible
"The measure was approved by the House by a 91-16 vote on Dec. 1, the final day of the fall session. There is still an opportunity for a final Senate vote as Illinois lawmakers are expected to reconvene in early January for a lame-duck session. The bill is intended to improve the pension fund's funding ratios through increased city contributions and raised contributions for certain employees." (Pensions & Investments)



[Opinion] CalPERS Gets Real on Future Returns?
"When it comes to pensions, it's not just about taking more risk, it's about taking smarter risks, it's about delivering high risk-adjusted returns over the long run to minimize the volatility in contribution risk. Sure, CalPERS can allocate 60% of its portfolio to MSCI global stocks and hope for the best but can it then live through the volatility or worse still, a prolonged recession and bear market? ... [P]ension plans are path dependent which means the starting point matters and if the plan is underfunded or severely underfunded, taking more risk can put it in a deeper hole, one that it might never get out of." (Pension Pulse)



State and Local Government Pension Risks (PDF)
30 presentation slides. "Despite large contribution increases and benefit cuts (primarily for new workers), U.S. public pension underfunding remains near record, almost as severe as at end of recession.... As interest rates fell and investing environment became more difficult, public pension plans maintained earnings assumptions and increased investment risk.... Incentives & institutions encourage risk taking. Lowering earnings assumptions would require large contribution increases." (Rockefeller Institute of Government)



Long-Term Pension Policy Considerations with an Aging Population (PDF)
"An aging population and low fertility rates are two major demographic challenges facing the world today and, more specifically, U.S. public sector pension plans. Both of these challenges create a rising fiscal burden whose effects reverberate through all public sector populations. Risk pooling for retirement and health care benefits begins to lose its effectiveness as populations tilt more toward the aged person whose life expectancy is increasing with each future generation." (GRS)



Teachers to Sue Kentucky Governor Over Underfunding of Pensions
"Jefferson County teachers who are fed up with the state government's failure to properly fund their pensions plan to sue Gov. Matt Bevin and two other high-ranking officials over the financial quagmire.... They hope the lawsuit will lead to a ruling that requires the state to fulfill its fiscal obligations to the Kentucky Teachers' Retirement System, which has been inadequately funded for years ... Teachers are contributing over 12 percent of their paychecks to KTRS[.]" (The Courier-Journal)



[Opinion] A Boomtown at Risk: Austin's Mounting Public Pension Debt (PDF)
11 pages. "Austin owes nearly $1.8 billion in pension debt, and its pension plans do not have enough money to pay for nearly one third of the retirement benefits that workers have already earned." (Laura and John Arnold Foundation)



California Supreme Court Agrees to Rule on Its Own Pensions
"The state Supreme Court last week agreed to hear an appeal of a groundbreaking ruling that allows cuts in the pensions earned by current state and local government workers, including judges.... [T]he seven Supreme Court justices seem unlikely to recuse themselves from a possible landmark ruling on this Marin County pension case, mainly because there is no clear alternative." (Calpensions)



The Interplay Between Retirement Plan Funding Policies, Contribution Volatility, and Funding Risk (PDF)
22 presentation slides. "Goal: Evaluate and quantify risk of severe underfunding and of large increases in employer contributions (ERC) under different funding policies.... Findings: [1] Commonly used funding methods can exacerbate the risks of severe underfunding and of large increases in contributions by government employers. [2] No easy way out: de-risking almost certainly requires higher contributions." (Rockefeller Institute of Government)



California Supreme Court Will Review Major Public Pension Ruling
"The court of appeal's August ruling amounted to a major change in California pensions law, scholars said.... For decades, California courts have ruled that state and local employees were entitled to the pension that was in place on the day they were hired. Pensions could be cut for current employees only if an equivalent benefit were added, making it difficult for governments to cut costs. If upheld, the ruling could be a vehicle for reducing a shortfall of hundreds of billions of dollars in public pensions in California." (Los Angeles Times)



CalPERS, CalSTRS Considering More Rate Increases
"The two systems are still seriously underfunded, CalPERS at 68 percent and CalSTRS at 65 percent.... Both are nearing a time when there will be more retirees in the system than active workers.... [In] 1971 there were were six active workers in the [CalSTRS] system for every retiree. Today CalSTRS only has 1.5 active workers for every retiree, similar to the CalPERS ratio. A wave of baby boom retirees that began around 2011, and the continuing increase in the average life span of retirees, have added to the growing cost of paying pensions[.]" (Calpensions)



[Opinion] CalSTRS Sets Standard on Fee Disclosure?
"CalSTRS is leading the way once again with this initiative to be completely transparent by disclosing all the fees it pays out to external managers and track total expenses more closely.... In an ideal world, we should be able to read the annual report of any public pension to understand how much was paid out in management fees, how much in performance fees (carried interest), how much for internal salaries, how much to vendors, brokers, consultants, accountants, lawyers, etc. and exactly who received what amount." (Pension Pulse)



2017 Planning for Governmental Retirement Plan Operations (PDF)
"The calendar provided in this [article] will help sponsors of governmental retirement plans that are exempt from many ERISA requirements set up a schedule of activities to address as the year progresses so that important deadlines for qualified public -sector plans are met.... [T]here are a number of key issues for you to consider as we head into 2017." (Xerox HR Services)



CalPERS Cuts Tiny Town's Pensions by 60 Percent
"Doing what it has never done before, the CalPERS board voted yesterday to slash the pensions of all five former employees of a small Sierra County town, Loyalton, by an estimated 60 percent.... A divided Loyalton city council attempted to get back into CalPERS, talked about getting a loan with installment payments, and pleaded ignorance about the need to pay off the big debt to preserve the pensions of four retirees and one person not yet retired." (Calpensions)



CalPERS Finds the City of Loyalton in Default for Non-Payment of Pension Obligation
"The Board of Administration for [CalPERS] today declared the city of Loyalton in default of its obligations to CalPERS after failing to pay what it owes to fund its pension plan.... To date, Loyalton has not made any payments toward its voluntary termination costs.... [A] certified letter explaining CalPERS' proposed action to reduce benefits was sent to the four affected retirees and one individual who no longer works for the city but does not yet collect retirement benefits." (CalPERS)



Text of Arizona Supreme Court Opinion: Pension Formula for State Judges Vests Upon Employment; 2011 Legislative Changes Violate State Constitution (PDF)
"[T]he Bill's change to the benefit increases formula violates the Pension Clause because it 'diminishes and impairs' the employed members' pension benefits. The Bill's changes to the benefit increases formula and the contribution rate also violate our holding in Yeazell because the Legislature cannot unilaterally change the terms of the members' pension contracts once their rights to those terms have vested at the beginning of the members' employment." [Hon. Hall et al. v. EORP/State, No. CV2011-021234 (Az. Nov. 10, 2016)] (Supreme Court of the State of Arizona)



NASRA Issue Brief: State Hybrid Retirement Plans (PDF)
"[T]his brief examines two types [of hybrid plans] in use in the public sector. The first is a cash balance plan, which marries elements of traditional pensions with individual accounts into a single plan ... The second type combines a traditional DB plan, usually with a lower level of benefit accrual, with an individual [DC] retirement savings account ... Despite variability among these plans, most contain the core features known to promote retirement security: mandatory participation, shared financing between employers and employees, pooled assets invested by professionals, targeted income replacement with survivor and disability protection, and a benefit that cannot be outlived." (National Association of State Retirement Administrators [NASRA])



New Developments in Social Investing by Public Pensions
"Public pension funds continue to engage in social investing, most recently divesting from Iran and fossil fuels. However, social investing is often not effective, as other investors step in to buy divested stocks. Social investing can also produce lower investment returns, conflict with the views of beneficiaries and taxpayers, and interfere with federal policy. In short, public pension funds should not engage in social investing." (Center for Retirement Research at Boston College)



San Jose Alternative Pension Plan Appears to Pass
"About 62 percent of San Jose voters approved Measure F, which will allow the city to adopt retirement health care and pension benefits it agreed on with its 11 employee unions.... Measure F's proponents have argued that the negotiated plan will save the city $3 billion in the next three decades and draw in new and former employees, including police officers needed to help fill patrol shifts as the city's population grows." (KTVU.com)



Going Down: Public Pension Plan Return Assumptions
"Public pension plans have abandoned their 8% return assumption en masse since 2010, accepting that the current investing environment cannot keep pace with that level of return.... [T]he majority of plans as of FY 2016 have shifted their return assumptions into the 7.25%-to-7.5% range. Half of the number of plans that targeted a return of 8% in 2005 have maintained that into the current period." (Pensions & Investments)



EEOC Files Appeal in Baltimore County Pension Case
"The [EEOC] is appealing a court ruling that absolved Baltimore County of having to return money to thousands of employees who overpaid into the pension system.... EEOC lawyers have argued that the county knew for years that its age-based pension plan rates were discriminatory, and the possibility of having to pay employees back should have been 'foreseeable for several decades.' A federal judge ruled in 2012 that the county had been wrong to overcharge older workers. In August, another judge ruled the county would not have to pay those workers back." (The Baltimore Sun)



[Opinion] Put Public Employees on Secure Choice and Social Security
"Why not freeze the employer contributions into California's state and local employee pension funds at 20% of salary (that's a two-to-one match on a 10% contribution via withholding), and then, constrained by those fixed percentages, lower all benefits, for all participants, on a pro-rata basis to restore solvency? Better yet, why not enroll every state and local government employee in the Secure Choice program?" (UnionWatch)



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])