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[Opinion] Public Pensions Can Meet Their Obligations
"Funded ratio is an important measure to consider when examining the health of a public pension plan, but it is only one measure.... [T]here are usually more good years than bad years as far as investment returns are concerned, and good years allow pension funds to build up a cushion that can cover the shortfall during recession years." (National Public Pension Coalition)

Public Pension Assets Quarterly Update (Q3 2017)
"As of the third quarter of 2017 (September 30), public pension assets were a record $4.16 trillion, an increase of approximately 2.5 percent, from $4.06 trillion as reported for the prior quarter and higher from the same quarter one year ago by some $330 billion, or 8.6 percent." (National Association of State Retirement Administrators [NASRA])

Panel Says Only Cuts to Employee Medical Benefit Can Fix New Jersey Pension Fund
"New Jersey employees' medical benefits are the only budget expense with enough potential savings to fix the state's pension deficit, according to the final report of a panel created by outgoing Gov. Chris Christie. Those benefits are 'substantially more generous and expensive' than those of non-government employees.... Without benefit changes, pension and medical costs will consume 26%, or $10.7 billion, of the budget by 2023, according to the panel. It recommended holding those costs to no more than 15%." (Pensions & Investments)

Government Plan Sponsors Seek Employee Communication from Providers
"While most government employers (53%) offer defined contribution (DC) plans to their employees, only slightly more than half (56%) of those plan sponsors believe they are successful in aiding a worker's retirement savings.... [P]articipation rates in DC plans offered by a government employer are much lower compared to 401(k) plans, with only a 44% participation rate found in government plans compared to 82% in 401(k)." (planadviser)

CalPERS Sees Unfunded Liabilities Rise $27 Billion
"CalPERS' unfunded liability grew $27.3 billion to $138.6 billion in the fiscal year ended June 30, 2016 ... The data lags a year, marking the end of a 12-month period in which the $344.4 billion system had a 0.61% investment return compared to the 11.2% return for the fiscal year ended June 30, 2017. CalPERS officials have estimated the system is 68% funded as of June 30, a drop from 68.3% a year earlier and 73.1% at the end of the 2015 fiscal year." (Pensions & Investments)

Tax Reform and Public Pensions: Minor Provision Causes Major Trouble
"Even though the [Unrelated Business Income Tax (UBIT)] would only impact a small portion of a pension fund's investments, it is still a cause for concern.... [A] new tax means a loss of revenue for the pension fund ... Furthermore, the new provision is scheduled to take effect on January 1, 2018, meaning public pension plans would not have time to restructure investments to avoid being subject to the UBIT." (National Public Pension Coalition)

[Opinion] Are Hedge Funds or Private Equity Investments Appropriate for Public Pension Funds?
"[If] all these arrangements are private... how do we know the deals are aboveboard? ... Is it appropriate for pension funds which are supposed to guarantee very non-volatile pension benefits to get into such risky assets? ... If outside interested parties cannot tell the terms of the arrangement -- such as fees, etc. -- how do we know these arrangements are on the up-and-up?" (STUMP)

[Opinion] Moving to 401(k)-Style Retirement for Kentucky Teachers Will Reduce Costs
"[A]ctuaries working for the Kentucky Teachers Retirement System claim that Gov. Matt Bevin's plan to switch newly hired public employees to 401(k)-type retirement accounts would cost billions more than simply keeping them in their traditional 'defined benefit' pension plan. This conclusion flies in the face of a worldwide movement toward 401(k)s that was designed to reduce costs. And it has." (American Enterprise Institute)

[Opinion] Don't Dismantle Public Pensions Because They Aren't 100 Percent Funded (PDF)
"In the last decade or so, state and local policymakers ... have been slowly dismantling public pensions. Why? Because, they argue, pension plans are underfunded and cannot be sustained.... Ability to pay depends on whether an entity can meet its cash flow needs and whether the total assets of the entity -- the public employer -- are a reasonable fraction of its total liabilities." (National Conference on Public Employee Retirement Systems [NCPERS])

Cost-of-Living Adjustments in State and Local Government Pension Plans (PDF)
16 pages, Nov. 2017. "Cost-of-living adjustments (COLAs) in some form are provided on most state and local government pensions.... Considerable variation exists in the way COLAs are designed, and in many cases they are determined or affected by other factors, such as inflation or the condition of the plan.... This brief presents a discussion about the purpose of COLAs, the different types of COLAs offered by government retirement systems, and an overview of recent state changes to COLA provisions." (National Association of State Retirement Administrators [NASRA])

[Opinion] The 'Pension Crisis' Is a Myth, Part 6
"The National Institute on Retirement Security (NIRS) calculates that the national average is that for every dollar invested in a pension fund, $2.21 is generated. This money goes directly into local economies through the spending of retirees. Cities and states are actually getting back more money than they spend on public pensions.... The reality is that funding public pensions does not 'crowd out' spending in other areas." (National Public Pension Coalition)

Oregon Task Force Identifies Measures to Reduce Unfunded Pension Liabilities by About $5 Billion
"An Oregon state task force is recommending a number of measures including harvesting some of the state's timberland, selling state-owned real estate and privatizing state universities that could result in a combined $4.2 billion to $6.4 billion to reduce the $74.9 billion Oregon Public Employees Retirement Fund's unfunded actuarial liability ... Another idea is to transfer surplus capital held by Oregon's hybrid workers' compensation system above what it needs to pay estimated claims to workers to the pension plan." (Pensions & Investments)

Colorado Governor Proposes Increase in Required Employee Contributions to State Pensions, Cap on COLAs
"[E]mployees would contribute an additional 2% of their salary, totaling 10% for most workers, starting in January 2019, and annual cost-of-living adjustments would be capped at 1.25%, from 2% now for most retirees ... Employer contribution levels would not change." (Pensions & Investments)

2017 Public Pension Funding Study (PDF)
"As of June 30, 2017, the aggregate funded ratio is estimated to be 70.7%, as assets experienced healthy growth. One-third of the plans reduced the interest rate assumptions they use for determining contribution amounts. The difference between the median sponsor-reported discount rate (7.50%) and [Milliman's] independently determined assumption (6.71%) continues to widen, indicating that further reductions in interest rate assumptions are likely." (Milliman)

CalPERS Identifies Income Sources of Public Employee Pensions
"The CalPERS Pension Buck illustrates the sources of income that fund public employee pensions. Based on data over the past 20 years ending June 30, 2017, for every dollar CalPERS pays in pensions, 61 cents comes from investment earnings, 26 cents from employer contributions, and 13 cents from employee contributions. In other words, 74 cents out of every public employee pension dollar is funded by CalPERS' own investment earnings and member contributions." (CalPERS)

[Opinion] Coping with the Public Employee Pension Albatross
"Only a few years ago, opponents of pension reform disparaged reformers by repeatedly asserting that pension costs only consumed 3% of total operating expenses. Now those costs have tripled and quadrupled, and there is no end in sight. What can local elected officials do? The short answer is not much. At least not yet." (PensionTsunami)

[Opinion] Pension Pursuit: How State and Local Governments Are Underfunding Pension Obligations
"Play the game of Pension Pursuit and see how state and local governments are underfunding pension obligations by trillions of dollars. This five-part animated video series is based on Hoover Institution Senior Fellow Josh Rauh's research on the vast underestimation of public pension liabilities and gives insight into the hidden debts the next generation will face." (Policyed)

[Opinion] American Academy of Actuaries Letter to Missouri State Retirement Board on Terminated-Vested Member Buyout Program (PDF)
"We appreciate the need to manage the cost of [Missouri State Employees' Retirement System (MOSERS)], and recognize that offering members lump sums that are lower than the present value of their annuity benefits has the potential to benefit both the system and the members. We are concerned, however, that MOSERS members may not understand that the methodology used under the buyout program results in lump sums that are substantially lower than would be needed to purchase the forsaken annuity benefits in the private market." (American Academy of Actuaries)

How Have Municipal Bond Markets Reacted to Pension Reform? (PDF)
14 pages. "This brief ... finds that for both state and local governments, higher unfunded pension liabilities as a percentage of government plan sponsor revenues, has a statistically valid relationship to increased municipal bond borrowing rates, relative to Treasuries. This analysis also finds that previous pre-recession findings remain the same. This work ... highlights the need for state and local officials and other stakeholders to continue to analyze both short and long-term costs, holistically, as the decisions and financial management in one priority area can clearly impact the costs in another." (Center for State & Local Government Excellence)

For Public Employees, Health Care Premiums Just Keep Going Up
"News of the looming public pension crisis has become ubiquitous in recent years. But far less noticed or publicized is a similar phenomenon taking place with health-care plans for public employees. There's been a steady movement in many states to shift ever-larger portions of monthly premiums to the employees themselves. Deductibles have also gone up, as have copayments." (Governing)

Kentucky Pension Crisis: Governor's Proposal Would Move Workers to 401(k) Plans
"The plan protects the benefits of current retirees ... But it cuts benefits of current employees and teachers in some ways. And many leaders of employee and retiree groups raised the prospect that if the changes become law they would be challenged in court -- particularly over a plan that would move current teachers and most public employees into 401(k)-type plans after 27 years of service." (The Courier-Journal)

[Opinion] Teachers and Schools Are Well Served by Teacher Pensions
"While attrition is high in the first years, teachers who end up leaving the profession are a small share of the teaching workforce and at a minimum recover their contributions to the pension plan plus interest ... [T]eachers who spend their careers in one district earn higher benefits because all their service credits are tied to their final salaries, typically averaged over three to five years.... A shift to account-style plans would not benefit most teachers and would increase teacher turnover to the detriment of students." (Economic Policy Institute)

How a 40-Year-Old Bill Is Key to This Local Pension Lawsuit in California
"In his suit against the county, George Luke, a resident of Santa Rosa since 1975, argues that the county did not follow the rules when it significantly boosted public employee retirement benefits in 2002 and 2003. He claims the Board of Supervisors did not hire its own actuary to make cost projections. It did not publicly disclose those costs at least two weeks before the increases were approved and a public hearing was never noticed.... Because they did not follow the law, 'the action is void,' Luke argues. 'It's like it never happened.' ... [T]hose enhanced benefits ... are expected to eat up nearly $50 million a year in additional expenses from the county budget between now and 2030." (PressDemocrat)

Pension Costs in Context (PDF)
"[In] 9 states, the total annual cost of corporate subsidies, tax breaks and loopholes exceeds the current annual pension costs for their main public pension plans. In some cases the differences are enormous. In Florida they are nearly three times pension costs. In four of the twelve states, subsidies and loopholes are more than twice pension costs." (Good Jobs First)

Public Pension Spending and Crowd-Out of Governmental Services in California, 2003-2030 (PDF)
193 pages. "The case studies demonstrate a marked increase in both employer pension contributions and unfunded pension liabilities over the past 15 years, and they reveal that in almost all cases that costs will continue to increase at least through 2030, even under the assumptions used by the plans' governing bodies -- assumptions that critics regard as optimistic.... Pension costs have crowded out and will likely to continue to crowd out resources needed for public assistance, welfare, recreation and libraries, health, public works, other social services, and in some cases, public safety." (Stanford Institute for Economic Policy Research [SIEPR])

[Opinion] California's Pension Costs Cause Reduction in Services by Local Governments
"[M]any US public pensions are chronically underfunded and will not be able to sustain another financial crisis.... Until we reach the boiling point, the pension 'crowding out' effect will continue taking a big chunk out of public budgets, leaving less money for governments to spend ... [No] matter what you do to slay the public-sector pension beast, it's deflationary, and with inflation in freefall, the long-term effects are self-reinforcing." (Pension Pulse)

[Opinion] South Carolina Can't Afford Its State Pension System
"Gov. Henry McMaster wants to abolish the state's defined-benefit pension system and replace it with a 401(k)-style plan, making state employees responsible for their own retirement income planning. Generations of future South Carolinians who understand what's at stake are turning cartwheels.... Why? Because South Carolina, like most public entities, has created a monster that must be slain." (GreenvilleOnline)

Wisconsin Governmental Entities Now Prohibited from Offering Domestic Partners Benefits
"[T]he official passage of the 2017-2019 biennial budget [included] the creation of Wis. Stat. Section 66.0510, which prohibits all municipalities, counties, and school districts from offering employee benefit plan coverage to domestic partners of employees as of January 1, 2018.... [T]he Legislature pointed to the State's recent legalization of same-sex marriage as eliminating the need for government employers to offer benefit plans which cover domestic partners." (von Briesen & Roper, s.c.)

Summary of the Quarterly Survey of Public Pensions: Asset Growth Continues in Second Quarter 2017 (PDF)
"For the 100 largest public-employee pension systems in the country, assets (cash and investments) totaled $3,584.0 billion in the second quarter of 2017, increasing by 2.2 percent from the 2017 first quarter level of $3,505.5 billion. Compared to the same quarter in 2016, assets for these major public-pension systems increased 8.5 percent from $3,302.5 billion. This continues the growth trend that began in the third quarter of 2015." (U.S. Census Bureau)

Ohio's Public-Employee Pensions Face Cutbacks
"Collectively, Ohio's five public pension funds have $192 billion in assets and last year paid out more than $15 billion in pension benefits and $1.1 billion in health-care benefits.... Although the funds have been mostly reliable and financially sound for decades, recent economic downturns, soaring health-care and prescription-drug costs, and the increased longevity of retirees have taken a toll. Several of the funds are reducing or eliminating cost-of-living adjustments, cutting subsidies and increasing health-care premiums." (The Columbus Dispatch)

Employee Contributions to Public Pension Plans (PDF)
10 pages; Sept. 2017. "[By] providing a consistent and predictable stream of revenue to public pension funds, contributions from employees fill a vital role in financing pension benefits. Reforms made in the wake of the 2008-09 market decline included higher employee contribution rates in many states. This issue brief examines employee contribution plan designs, policies and recent trends." (National Association of State Retirement Administrators [NASRA])

University of California Hands Out Generous Pensions While Students Pay the Price with Higher Tuition
"As parents and students start writing checks for the first in-state tuition hike in seven years at the University of California, they hope the extra money will buy a better education. But a big chunk of that new money -- perhaps tens of millions of dollars -- will go to pay for the faculty's increasingly generous retirements. Last year, more than 5,400 UC retirees received pensions over $100,000. Someone without a pension would need savings between $2 million and $3 million to guarantee a similar income in retirement." (Los Angeles Times)

[Opinion] Kentucky Pension Blues: Let's Get This Fire Started
"[A] variety of proposals [have been] put forth to 'fix' the problem. None of them actually fix the problem: the pension benefits already promised and earned by current and past employees. The 19% fundedness of the state plan is not for future retirees ... It's for people currently getting pension benefits. It's for people who aren't yet retired but have 20 years' worth of pensionable service. It's for people with 5 years of service that they've earned.... It doesn't include future service, it doesn't include new employees. It's for benefits that have already been legitimately earned. Those benefits have got to be paid for." (STUMP)

[Opinion] Revisiting the Three Rs of Teacher Retirement Systems: Recruitment, Retention, and Retirement (PDF)
22 pages. "Teacher effectiveness increases with experience.... The cost of teacher turnover is quite high, both in terms of financial cost and loss of productivity to the school district.... Defined benefit pension plans help to recruit high quality teachers, and to retain highly productive teachers longer, as compared with defined contribution (DC) accounts.... In 2009, DB pensions helped to retain and additional 30,000 teachers nationwide.... In 2009, DB pensions saved school districts between $130.7 million and $284.4 million nationally in teacher turnover costs." (National Institute on Retirement Security [NIRS])

CalPERS Considers Paying Down New Debt Faster
"CalPERS plans to get local government reaction to a proposed new policy that would pay down new pension debt over a shorter period, yielding big savings in the long run but also requiring larger payments in the early years.... [F]or new debt from investment losses, the payment period would be shortened from the current 30 years to perhaps 20 years ... and the higher debt payments from years with investment losses could be offset by lower payments from years with gains." (Calpensions)

Public Pension Assets Quarterly Update, Q2 2017
"As of the second quarter of 2017 (June 30), public pension assets were a record $3.06 trillion, an increase of approximately 2.0 percent, from $3.98 trillion as reported for Q1 2017." (National Association of State Retirement Administrators [NASRA])

[Opinion] The Push for Full Funding of Public Pensions: Is It Worth It?
"[P]ublic pension liabilities are long-dated and unlike corporate pensions, there is no solvency threat to treat them the exact same way as their corporate counterparts.... [P]ensions are all about matching assets and liabilities but more importantly, they are about fulfilling a pension promise to allow plan beneficiaries to retire in dignity and security." (Pension Pulse)

Rhode Island General Assembly Passes Bill Requiring Transparency from Investment Managers
"The legislation ... establishes mandatory public disclosure of information regarding how the state's pension investments are managed and invested and how such investments are performing, along with an overview of the state's pension investment strategies." (Pensions & Investments)

[Opinion] Public Pension Storm Warning
"Admittedly, public pension liabilities don't come out of nowhere the way hurricanes seem to -- we know exactly where they will strike. In many cases, we know approximately when they'll strike, too. Yet we still let our elected officials make impossible-to-fulfill promises on our behalf.... Worse, we let our government officials use predictions about future returns that are every bit as unrealistic as calling a 13-inch rain in Houston a 100-year event. And while some of us have called pension officials out, they just keep telling lies -- and probably will until we reach the breaking point." (Mauldin Economics)

[Opinion] Pensions Leaving Workers Behind by Focusing on Messaging, Politics
"[The Council for Institutional Investors (CII)] describes itself as a 'leading voice for effective corporate governance practices for U.S. companies and strong shareowner rights and protections.' But what started off as promoting good governance has transformed into politically motivated environment and social governance, often referred to as ESG. Fiduciary responsibility has taken a back seat.... CII members are staring at an unfunded liability of nearly $4 trillion ... So why do they insist on devoting so much of their time and resources on initiatives that will do nothing to help close that gap?" (Mark A. Bloomfield, American Council for Capital Formation, via Investor's Business Daily)

California Pension Reform: The San Jose Model
"[In] August 2015, the San Jose city council passed a compromise resolution that replaced Measure B with a scaled down reform; this was approved by voters in November 2016. The provisions of this new pension reform measure should be of keen interest to local reformers everywhere in California, because they survived relentless attacks in court.... San Jose's current unfunded pension liability now stands at just over $3.0 billion. These reforms are estimated to save $1.7 billion over the next ten years." (PensionTsunami)

[Opinion] What Is the New Hampshire Decennial Retirement Commission?
"There is legitimate concern that the anti-pension ideologues serving on the decennial retirement commission will use the commission's report and recommendations to push for harmful changes to the New Hampshire Retirement System. This could mean a push for cash balance plans or even conversion to a 401(k)-style defined contribution plan." (National Public Pension Coalition)

Using a Section 115 Trust to Help Manage Pension Obligations
"[An Internal Revenue Code section 115] trust is a vehicle for segregating agency funds from general assets for the purpose of funding essential governmental functions.... Funds placed in a 115 trust are irrevocably committed for the essential government function(s) specified in the applicable trust agreement (e.g., pension obligations). Therefore, the monies held in such trusts can be invested in accordance with the rules governing such special purpose accounts." (Best Best and Krieger LLP)

Texas Teacher Retirement System Adjusts Proposed 403(b) Rule Amendments
"TRS is sticking with its current rule allowing a 10-year surrender period (12 years with disclosure) at 10%, instead of its proposal to halve the penalty to five years and 5%. Additionally, TRS is opting to raise the caps it previously proposed on asset-based fees and split those caps into two categories, one for variable annuity (VA) products and one for non-annuity products[.]" (National Tax-Deferred Savings Association [NTSA])

CalPERS Said to Mull Outsourcing Its Private-Equity Investments
"CalPERS, the largest pension fund in the U.S., may ask BlackRock to manage all or part of its private-equity holdings, as it seeks to control fees ... CalPERS in April began reviewing how it invests in private equity, looking to cut exposure to the asset class because of rising fees.... The California pension fund has about $26 billion in private-equity assets that BlackRock could help manage if the preliminary talks lead to an outsourcing arrangement." (Institutional Investor)

This Missouri City Just Switched Employees from a 401(k) to a Defined Benefit Plan
"The city of Webster Groves switched from a defined contribution 401(k) plan to a defined benefit pension through the Local Government Employees Retirement System (LAGERS) ... [which is] a statewide public pension system for local government employees in Missouri.... The system is also 95% funded, a clear sign of the strength of the system." (National Public Pension Coalition)

[Opinion] New Math Hits Minnesota's Pensions?
"[W]hile Kentucky, Illinois, and New Jersey have well-known public pension problems, other states are also on the verge of seeing their pensions collapse, either because of years of neglect or more likely, because the new pension math (new GASB rules) is forcing them to use a much lower discount rate to determine their future liabilities.... [S]ince the duration of liabilities is a lot bigger than the duration of assets, then no matter how well investments do, pension deficits will keep widening as interest rates decline. This effectively is the death knell for chronically underfunded US public pension plans." (Pension Pulse)

Commonwealth of Kentucky Pension Performance and Best Practices Analysis: Recommended Options (PDF)
113 pages. "In the aggregate, the Commonwealth of Kentucky's pension plans are among the worst funded in the nation. Without corrective action, the large and growing unfunded liabilities associated with these pension benefits not only threaten the retirement security of plan participants, but they are also eroding the fiscal stability of the state ... [This report presents] ideas and alternatives for improving the long-term security, reliability, and affordability of these benefit programs. These recommended options build on [an] analysis of factors that have led to the current conditions ... Actuarial assumptions; Benefit levels and risk exposure; Funding; Investment practices and approach." (pfm)

Puerto Rico Oversight Board Sues, Wants Governor to Enforce Pension Reforms
"Puerto Rico's Financial Oversight and Management Board filed a lawsuit [August 28] in U.S. District Court in San Juan to enforce parts of its fiscal plan calling for furloughs and pension reforms, following Gov. Ricardo Rossello's refusal to carry out those provisions. The complaint asks the court for an injunction prohibiting the governor from refusing to enforce or comply with the board's fiscal plan." (Pensions & Investments)

Puerto Rico Governor Signs Pension Reform Law
"Puerto Rico has passed pension reforms that include making payments to the depleted defined benefit system from general revenues, and creating a defined contribution plan for active workers and new hires.... The changes are subject to approval by Puerto Rico's Financial Oversight and Management Board [PROMESA] ... [which] has its own plan for pension reform that calls for progressively reducing pension benefits by a total of 10% for most participants and enrolling all active members and new hires in defined contribution accounts." (Pensions & Investments)

[Opinion] The 'Pension Crisis' Is a Myth, Part Three
"Illinois does face real challenges with its public pension systems, challenges that will take years to resolve.... Illinois' pension problems are the direct result of years of mismanagement and deliberate underfunding by governors and legislators of both parties. Resolving these problems will take the commitment of lawmakers from both parties to fully fund the state's pension obligations every year." (National Public Pension Coalition)

Public Pension Funded Ratio Continues to Improve Through Second Quarter, Now at 73.0% (PDF)
"The strong equity returns in Q2 led public plan asset growth to outpace the rise in pension liability, increasing the estimated funded status of the 100 largest U.S. public pension plans by $33 billion from the end of March 2017 through the end of June 2017 ... During the second quarter, the deficit dropped from $1.314 trillion to $1.281 trillion. As of June 30, the funded ratio stood at 73.0%, up from 72.0% at the end of March." (Milliman)

[Opinion] The 'Pension Crisis' Is a Myth, Part Four
"When a pension plan is closed ... it can no longer invest on an infinite time horizon. At a certain point in time, all of the participants in the plan will be retired and will be collecting benefits and no new employees will be paying into the plan. As the number of retired members in the plan continues to increase over time, with fewer and fewer active members contributing, the plan must shift to more conservative, lower-return investments in order to maintain the assets they already have. This makes it more difficult to pay down any unfunded liability already present in the plan." (National Public Pension Coalition)

An Update on Retirement Plan Choices for Public Employees and Employers (PDF)
38 pages. "When given the choice between a primary DB or DC plan, public employees overwhelmingly choose the DB pension plan. DC plans are less cost efficient than DB plans, due to lower investment returns, and the lack of longevity risk pooling. Some states have considered moving employees from a DB-only to a DC-only structure in an attempt to address an unfunded liability. Making this shift, however, does nothing to close any existing funding shortfalls, and can actually increase retirement costs. Traditionally, employers bear most of the risk in DB plans, and employees bear most of the risk in DC plans. The public sector has always had cost sharing in its DB pensions and employees have experienced increases in their portion of plan contribution in recent years." (National Institute on Retirement Security [NIRS] and Milliman)

[Opinion] Switching to 401(k)-Type Plan for Kentucky Public Employees Would Cause More Harm (PDF)
18 pages. "[T]he plan for most [Kentucky] state employees ... is severely underfunded, possessing only 16 percent of the assets it needs to pay future benefits ... [A] shift to a DC plan will not save money because its cost for new workers and teachers would be similar to the already-inexpensive defined benefit plans. In fact, closing the DB plans will increase the cost of paying off those plans' unfunded liabilities." (Keystone Research Center, for Kentucky Center for Public Policy)

District Court Rejects Union's Challenge to CalPERS Amendment Increasing Retirement Age
"The case goes back to the Golden State's budget crisis in 2013, when lawmakers passed a law that raised the retirement age to 62 for its state workers' pension plan CalPERS... The union said the change violated the Contract Clause of the U.S. Constitution by retroactively impairing the union's contract rights and sued CalPERS, Gov. Jerry Brown and other state administrators. In her ruling for summary judgment in favor of the state, U.S. District Judge Beth Labson Freeman found the change to the contract was legal." [Local 101 AFSCME v. Brown, No. 14-5640 (N.D. Cal. Aug. 16, 2017)] (SCVNews)

Three Pension Funds Sue Major Banks in Stock Loan Case
"Three public retirement funds have banded together to file a lawsuit against six major Wall Street investment banks, alleging that they were overcharged by those banks in the stock loan market and that the banks conspired to control the market.... Stock lending is a common practice among institutional investors, particularly public pension funds, which often sit on large piles of cash for a long time. Lending shares ... allows these investors to earn a cash return on their investments while holding a stable interest in publicly-traded companies... [T]he investors allege that the banks worked together to keep the stock-loan market inefficient by conspiring to keep third-party electronic platforms from tapping into this lucrative business." (Institutional Investor)

Abandoning the Pension Rat Race for Absolute Returns
"A pension fund does three things... It pays current benefits, grows assets for future benefit payments, and weathers markets to ensure the delivery of the first two. For each function -- liquidity, growth, and hedging -- the investment team modeled a dedicated portfolio, so the assets overall no longer needed to serve three functional masters." (Institutional Investor)

Public Pensions: Why Do 100% Required Contribution Payers Have Decreasing Fundedness?
"[According to a May 2017 working paper from the Center for Retirement Research at Boston College,] 'The valuation (or measurement) of public pension liabilities and contribution requirements is highly sensitive to the choice of several actuarial assumptions, which should be considered when assessing the financial condition of public pension systems.' ... [T]he part that is significant: a sensitivity to valuation parameters, especially the discount rate used. And public pension plans get to choose that for themselves.... [T]he point is that the plans are often optimistic on parameter choice.... The discount rate is just the most obvious parameter choice. There are many others that go into the mix." (STUMP)

[Opinion] Public Pensions: A Good Deal for Taxpayers (PDF)
"Pension funds are resilient. Pension funds pose little burden, if any, on taxpayers. Taxpayers' contributions are fully or partially offset by the tax revenues generated by public pension investments in the community and by the local spending of retirees who receive pension checks.... [D]ismantling pensions contributes to income inequality, a sluggish economy, and economic volatility.... [If] governments continue to dismantle public pensions they will inflict $3 trillion in economic damage by 2025." (National Conference on Public Employee Retirement Systems [NCPERS])