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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)

Why the Last Defense of Public Pensions Is Eroding
"Twenty-year annualized returns for public pensions in the U.S. are poised to decline to 7.47%... That would be the lowest-ever annual mark recorded by Wilshire, which began tracking the statistic 16 years ago. In 2001, near the height of the dot-com boom, pensions' 20-year median return was 12.3% ... The dip is intensifying a national debate over whether states and cities can continue to afford pension obligations, as the soaring costs are squeezing budgets across the U.S." (The Wall Street Journal; subscription may be required)

[Guidance Overview] The Proposed 457(f) and 409A Regs: A Closer Look
"One of the first clarifications provided in the proposed regulations is that the rules under 409A apply 'separately and in addition to the rules under 457.' Thus, both the 409A regulations and the 457 regulations would apply to 457(f) plans when finalized. So the regulatory environment for 457(f) plans remains complex, though important clarifications regarding the interaction between 457(f) and 409A was provided in the proposed 457 regulations." (Cammack Retirement Group)

[Opinion] The Public Pension Problem Is Much Worse Than It Appears
"Most state and local pension funds closed the books on their latest fiscal year on June 30, and during that 12-month period the bellwether Standard & Poor's 500 increased by less than half a percentage point. While many funds have yet to report their results for the year, early returns suggest that the industry fell well short of its lofty investment goals." (Investor's Business Daily)

Financing State and Local Pension Obligations: Issues and Options (PDF)
29 pages. "This policy brief provides background on public pensions and discusses different ways to bring the poorly-funded systems into balance. [The authors] conclude that the legacy costs of these pension plans should be covered by some combination of overall tax increases and spending cuts, while the new costs that would otherwise accumulate could be mitigated by judicious reform proposals." (The Brookings Institution)

State and Local Government Contributions to Statewide Pension Plans: Fiscal Year 2014 (PDF)
"[T]he experience for FY 14 reflects an improved effort among state and local governments to make the full actuarially determined pension contribution, as well as a decline in the rate of growth of pension costs. This brief describes how contributions are determined; the recent public employer contribution experience; and trends in employer contributions over time." (National Association of State Retirement Administrators [NASRA])

CalPERS Earned Less Than 1% in Most Recent Fiscal Year
"CalPERS reported a 0.61 percent gain in investments in its latest fiscal year, the second straight year of subpar results for the big California pension fund.... [T]he meager gains are sure to heighten concerns about the $302 billion fund's long-term sustainability and its impact on taxpayers. The latest results come on top of a gain of just 2.4 percent in the previous fiscal year. Both results are well below CalPERS' official annual target of 7.5 percent." (The Sacramento Bee)

As CalPERS Exits Hedge Funds, CalSTRS Adds More
"CalPERS announced two years ago that it was eliminating its $4 billion hedge fund program ... CalSTRS adopted a 'risk mitigation strategy' last November that will move 9 percent of its investment portfolio into long-term U.S. Treasury bonds and hedge funds with strategies designed to lose less value during recessions. The different views of hedge funds is one of the biggest separations of investment strategy since CalSTRS, under legislation 34 years ago, took control of the teacher pension fund that had previously been managed by CalPERS." (Calpensions)

[Opinion] How to Save Public Pensions, No Federal Bailout Needed
"Instead of bailing out these pensions, Congress should pass a law allowing states and local governments to reduce promised benefits -- something that is now illegal under some states' statutes or constitutions. Congress should stipulate that pension plans must be in very bad shape to qualify for relief ... Many pensions allow retirement at age 55; states and local governments could mandate that benefits cannot be drawn until age 65. Payments could be capped at 150% of the median income in the local jurisdiction. Automatic cost-of-living increases that now exceed expected inflation could instead be tied to increases in the median income." (The Wall Street Journal; subscription may be required)

Proposed Changes to Social Security for Public Employees: SSA Actuary Estimates Financial Effects (PDF)
"[This letter provides an] estimate of the financial effects on the Social Security Trust Funds of the amendment in the nature of a substitute ... for H.R. 711, the 'Equal Treatment of Public Servants Act of 2015' ... This amendment would generally replace the windfall elimination provision (WEP) with a new formula that you have referred to as the 'Public Servant Fairness Formula' (PSF). The proposal would also provide for a rebate payment starting in 2018 for individuals affected by the current WEP." (Office of the Chief Actuary, U.S. Social Security Administration [SSA])

Preserving Retirement Income Security for Public Sector Employees (PDF)
42 pages. "[M]ost public retirement systems provide new members with a DB pension benefit or a DB benefit in combination with a DC account. Only a very small number of systems provide only a DC benefit.... 71 percent of the plans surveyed credit their members with interest on their contributions if they leave and request a refund.... [A]ll public DB plans allow for the purchase of service credits for prior military service, and more than half of the plans surveyed allow for the purchase of credits for prior out-of-state government service.... A number of plans have features that increase benefits for short or moderate term employees." (National Institute on Retirement Security [NIRS])

[Opinion] The Great Recession and Public Pensions
"[In] 2007, most public pensions were reasonably well-funded. Several were over 100 percent funded, a good number were over 90 percent funded, and many were above 80 percent funded.... Then, in the two year period from 2008 to 2009, we see the funded ratios drop for almost all plans. Florida drops from 101.4% funded to 84.1% funded. New York drops from 101.5% funded to to 94.3% funded. Oregon drops from 112.2% funded all the way down to 80.2% funded ... The single most important thing states can do to have well-funded public pensions is to fully pay their contribution to the pensions each year." (National Public Pension Coalition)

[Guidance Overview] IRS Proposes Regs for Deferred Compensation Plans of Tax-Exempt and Governmental Employers
10 pages. "The proposed regulations do not 'grandfather' existing arrangements or offer a transition period to conform to the proposed or final regulations. Thus, while new arrangements generally should be designed with an eye to compliance with the proposed rules, decisions about existing arrangements will be more complex." (Ropes & Gray LLP)

Independent Citizens Advisory Committee Report on Sonoma County, California, Pension Issues: Findings, Conclusions, and Recommendations
99 pages, dated June 2016. "[Recommendations include:] [1] Aggressively pursue the sharing of pension costs with employees through continuing supplemental payments ... beyond 2024, sharing normal costs 50/50, and assuming some of the risks of plan gains and losses.... [2] Implement a new tier that is a hybrid plan of defined benefits and defined contributions, which [the Committee deems] to be a more effective plan to meet pension reform objectives than current plans.... Until this can be achieved, negotiate for ever higher employee contributions through collective bargaining, since this is the best tool available to control pension costs available to the County in the short term." (Sonoma County Independent Citizens Advisory Committee on Pension Matters)