Headlines about "Government plans - state and local - misc"

Gathered from the web by the editors at BenefitsLink.com.
New York Comptroller Issues 'Red' Alert on Pension Fund
Excerpt: "The shortfall comes despite DiNapoli's decision -- also announced yesterday -- to raise the mandatory pension contributions paid by local governments and the state to 16.3 percent of payroll, up from 11.9 percent." (New York Post)

[Opinion] Public Sector Pensions: One of the Greatest Ponzi Schemes of all Times
Excerpt: "Public sector pension plans take a series of liberties that create an unrealistic financial scenario that can only be described as one of the greatest Ponzi schemes of all times. These include underestimating the raises that government workers may earn until they retire and overestimating the interest assumptions for funding. This collection of bogus assumptions is hidden away in 'off-the-balance-sheet' accounting practices . . . ." (The Free Enterprise Nation)

State Pension Fund Faces Shortfall, Candidate for State Comptroller Says
Excerpt: "When the state takes its snapshot of the fund, he says, it makes several mistakes, including two big ones. First, it counts money that is not in the fund -- hoped-for investment gains that may or may not appear and future contributions from workers and taxpayers. Second, it does not take into account that the state pensions are worth more than other such promised money because they come with a constitutional guarantee." (The New York Times; free registration required)

Top Vernon, California, City Attorneys Get Generous 'Public Safety' Pensions
Excerpt: "Vernon's top city attorneys, already among the highest-paid public employees in the state, have received an unusual pension deal under which they would get the same enhanced benefits as police officers and firefighters." (Los Angeles Times)

SEC's Cease-and-Desist Order Against State of New Jersey Relating to Disclosure Regarding Pension Plan Obligations
Excerpt: "This alert focuses on lessons and concerns for state and municipal issuers arising from the Order." (Nixon Peabody LLP)

[Guidance Overview] GASB's Proposed Changes to Pension Accounting and Financial Reporting by Employers (PDF)
Pages 1, 3 of 4 pages. (National Council on Teacher Retirement)

Pension Fund Investments Are Up, But Gaps Persist
Excerpt: "A review by Stateline of 20 public employee pension plans in 19 states shows preliminary returns ranging from 10.8 percent for the Nevada Public Employee Retirement System to 18.7 percent for the South Dakota Retirement System. Meanwhile, Wilshire Associates, a California-based investment adviser, reports a 13.09 percent median return among public plans with more than $1 billion in assets for fiscal 2010, compared to an 18.76 percent loss in fiscal 2009." (The Pew Charitable Trusts)

Broke Miami, Florida, Breaking Employee Contracts
Excerpt: "The city is operating under a state of 'fiscal urgency,' declared earlier this summer. The budget deficit for next fiscal year is about $110 million. The proposed cuts in salary, pension contributions and health insurance costs amounts to about $86 million in savings for the city." (NBC Universal, Inc.)

[Guidance Overview] GASB Moving Towards Radical Overhaul of Public Pension Accounting (PDF)
12 pages. Excerpt: "'Preliminary Views' issued by GASB on pension accounting would, if adopted, represent a radical departure from past practice and bring governmental employers much closer to the FASB standards governing private employers. Public employers should anticipate that the accounting rules under consideration would have a significant impact on their balance sheet and income statements." (CHEIRON, Inc.)

Problems With State-Local Final Pay Plans And Options for Reform
Excerpt: "[F]inal pay plans suffer from serious shortcomings: they (1) severely 'backload' benefits; (2) treat very differently workers on different career trajectories; and (3) invite mischief in terms of sudden late-career promotions. They are also riskier for workers than they appear... " (Center for Retirement Research at Boston College)

University of California Retirement Funds Face a Shortfall of More Than $20 Billion, Report Says
Excerpt: "A panel recommends increasing contributions by employees, raising the retirement age for new hires and reducing some benefits." (Los Angeles Times)

Pension Overhaul in California Is Up in The Air
Excerpt: "The governor may have to settle for a few incremental pension reforms pending in the final hours of the legislative session, particularly Assembly Bill 1987, whose tortured history illustrates the political difficulty of the issue." (The Fresno Bee)

[Opinion] The Public Pension Monster
Excerpt: "The graph projecting the growth of pension obligations in California demonstrates that what started as a little harmless back scratching has morphed into a monster that unaddressed will claim all of the resources the state can muster via taxation." (Tom Lindmark via iStockAnalyst)

[Opinion] Public Employee Pension Reforms Recipe for Disaster
Excerpt: "While many of the people, including the Daily News, calling for reform are acknowledging that private-sector workers have lost tremendous value on their retirement plans, incredibly they present that as a model for public-sector employees!" (Paul Weber in the Los Angeles Daily News)

[Opinion] It's Time for Washington State Workers to Help Pay More for Healthplan Coverage
Excerpt: "Labor negotiators for Gov. Chris Gregoire told state and higher-education employees last week that state workers must increase their contribution to health-care premiums from the current 12 percent to as much as 26 percent or reshape their health-care benefits package. The governor, at long last, has it right." (Seattle Times)

[Opinion] Time is Now for Changes to Municipal Government Pensions and Health Plans in Massachusetts
Excerpt: "[I]n many towns Massachusetts taxpayers subsidize medical services that are available to all retirees under Medicare. Yet feckless local boards, under the thumbs of unions, refuse to enact even basic economies." (Boston Globe)

[Opinion] Public Pensions and Our Fiscal Future
Excerpt: "Few Californians in the private sector have $1 million in savings, but that's effectively the retirement account [guaranteed] to many government employees." (Arnold schwarzenegger via The Wall Street Journal)

States Watching Minnesota Pension Lawsuit
Excerpt: "A legal battle in Minnesota next month will test the ability of states to change benefits of current retirees. The outcome could prompt other cash-strapped states to follow suit or grind a fleeting movement to a sharp halt." (Franklin Center for Government & Public Integrity)

States Press Workers on Health Care Costs
Excerpt: "On Thursday, a Michigan judge heard arguments in two of three lawsuits filed by public-school unions and retirees who opposed a new law that for the first time required them to contribute toward their health-care benefits. Michigan is among several states struggling with record budget deficits that want employees to take on a greater share of the burden of ballooning health-benefits costs." (The Wall Street Journal)

NAGDCA 2010 Survey of Defined Contribution Plans: Stable Value
Excerpt: "This report contains two sections. The National Summary provides a narrative overview of the key areas involved in administering governmental 457, 401(k), 401(a), and 403(b) plans. The survey also provides a pdf of the Overall Survey Results, which offers a look at the survey through charts and responses from all participating entities." (National Association of Government Defined Contribution Administrators)

Another Illinois Pension Plan Sells Investments to Cover Benefits
Excerpt: "Illinois Teachers' Retirement System . . . plans to sell $3 billion in investments, or about 10% of its $33.1 billion in assets, in the current fiscal year to pay pension benefits . . . . The system is the fifth Illinois statewide defined benefit plan to sell off investments this fiscal year to pay benefits." (Pensions & Investments; registration may be required)

South Carolina Will Spend $2.4 Million on Bariatric Surgeries for State Workers
Excerpt: "After monitoring the participants for a year and a half, the pilot program will check for complications and see if the surgeries lead to health-care savings." (Governing)

Audio and Transcript: Even State Pensions Aren't Safe Anymore
Excerpt: "Guest host Rachel Martin talks with Keith Brainard, research director for the National Association of State Retirement Administrators, and Stephen Pincus, a Pittsburgh lawyer representing retirees in a legal fight over benefits." (National Public Radio)

[Opinion] Truth in Pensions: Just How Big a Hole Is New Jersey In?
Excerpt: "The action was historic: New Jersey is the first state targeted by the SEC for securities fraud. But with pension funds crumbling everywhere, other states probably will join us in shame. But from this day forward, cross our hearts and hope to die, New Jersey has agreed to tell the truth about its grossly and dangerously undernourished pension funds." (New Jersey On-Line LLC)

More Than Half of U.S. Public Pension Funds Could Disappear
Excerpt: "In a new research paper titled: Policy Options for State Pensions Systems and Their Impact on Pension Liabilities,' [an associate finance professor] explains that the large and daunting group of troubled states pension funds 'are headed for run outs and financial disaster,' an Aug. 19 announcement said." (Financial Planning)

CalPERS Loan Sought by California Governor Likely 'Very Expensive,' Analysts Say
Excerpt: "The governor's plan represents an apparent about-face ? and raises questions about the long-term costs. The last time the state borrowed from CalPERS, it had to pay the pension fund $400 million in interest. More borrowing would surely bring more interest expense, experts said Friday." (The Sacramento Bee)

States Study Their Pension Assumptions
Excerpt: "Pension boards in states around the country are considering recommending lower anticipated returns on investments, a move that could further pinch revenues in states struggling to balance yearly budgets." (Franklin Center for Government & Public Integrity)

Key Votes in 1996 and 2002 Boosted Top 20 Pensions for San Diego City Workers by 176 Percent
Excerpt: "The deals struck by labor leaders and city officials in 1996 and 2002 created a financial windfall for thousands of city workers, some of whom enjoy double or triple the pensions they would have under the previous program, according to an analysis of pension records by The Watchdog." (The San Diego Union-Tribune, LLC)

Pension Fraud in New Jersey Extends Focus to Other States
Excerpt: "A spokeswoman for Gov. Pat Quinn's Office of Management and Budget, Kelly Kraft, said Illinois believed its pension disclosures were complete and accurate. The state has not hidden the fact that its pension funds have big shortfalls, she said, and there was no reason to think the S.E.C. might lodge a complaint against it, as it did with New Jersey." (The New York Times; free registration required)

New York May Reduce Assumed Returns on Public Pension Assets
Excerpt: "A reduction to 7.5 percent or 7.75 percent is likely . . . . The move 'will increase the required contributions from the state and local governments but will keep the fund as strong as it is now,' . . . ." (Bloomberg Businessweek)

Pension Cuts Won't Cover U.S. Taxpayers' $3 Trillion Bill, Professor Says
Excerpt: "Taxpayers must cover at least a third of a $3 trillion bill for public employee pensions even if lawmakers eliminate cost-of-living increases and raise the retirement age, according to an academic study." (Bloomberg L.P.)

Behind Fraud Charges, New Jersey's Deep Public Pension Crisis
Excerpt: "Experts say that governors and legislators, Republicans and Democrats, have all contributed to the problem by refusing to put state money into the funds as they should have. And even if benefits are cut and taxes raised, they said, there is no obvious fix in sight." (The New York Times; free registration required)

In Pennsylvania, Philadelphia City Council Members Weigh in on DROP
Excerpt: "DROP has become one of the most contentious political issues in the city. This month, a report commissioned by Mayor Nutter said the program had cost the city an extra $258 million in pension expenses over the last 10 years." (The Philadelphia Inquirer)

CalPERS Committee Approves Policy Change to Lower Pension Costs
Excerpt: "A key committee of the California Public Employees' Retirement System [has approved a] recommendation that would change the pension fund's policies to immediately recognize benefit changes. A CalPERS news release said the shift in policy, requested by the employer and some unions, could save the State's General Fund budget up to $500 million this fiscal year if the Governor and Legislature enact higher contributions for existing members and new hires." (PLANSPONSOR.com)

Colorado Pension Program on Way to Recovery After Landmark Legislation, According to Auditors
Excerpt: "Colorado's pension fund is back on track toward solvency after state lawmakers became the first in the nation to cut retiree benefits to prevent its pension system from going broke, auditors said Monday." (Huffington Post, Inc.)

Issue Brochure: Evolution of the Government Deferred Compensation Plan Market (PDF)
4 pages. (National Association of Government Defined Contribution Administrators)

Fact Check:ing San Diego on Retiree Health Care Reform
Excerpt: "Of the 10 fiscal reforms on the city of San Diego's November sales tax ballot proposition, reducing retiree health care costs is city's the biggest opportunity for savings." (voiceofsandiego.org)

Supporters of Reforming California Public Pensions Say Bill Would Not Be Effective
Excerpt: "Pension reform advocates said that amendments added to the bill have weakened the bill's overall purpose. The amendments, which are supported by unions, would allow negotiations on issues such as education incentives and shift changes to determine a final pay figure." (California HealthCare Foundation)

U.S. Alleges Fraud in New Jersey Pension Funding
Excerpt: "Federal regulators accused the State of New Jersey of securities fraud on Wednesday for claiming it had been properly funding public workers' pensions when it was not." (The New York Times; free registration required)

Colorado PERA Cutbacks Bolstering Plan's Finances
Excerpt: "A move by Colorado's state pension fund to cut retiree benefits to avoid going broke has apparently returned the system on a path toward solvency, according to a new audit." (PLANSPONSOR.com)

Disclosure of Contributions Is Proposed for Candidates Running for Boards of CalPERS, CalSTRS
The bill passed the California Assembly almost unanimously, and now goes to the California Senate. (AP via New York Times; free registration required)

Public Pensions and Its Retirees
Excerpt: "Illinois is hardly the only state to put retirees' teeth on edge. Pew found that as of fiscal 2009, only 4 states had pensions that were 'fully funded,' with enough money on hand to pay future benefits. Many states are legally barred from reducing payments to current retirees, but some are breaking that mold." (SmartMoney)

California State Worker Contracts Modifying Pension Benefits Get Assembly OK
Excerpt: "The Assembly voted 61-4 Thursday to ratify contracts with three state employee bargaining units that include some modifications to pension benefits ? agreements that the Schwarzenegger administration worked out with the affected unions." (The Sacramento Bee)

[Opinion] California Governor Calls for a State Budget That Cuts Spending and Does Not Raise Taxes
Arnold Schwarzenegger, governor of California. Excerpt: "We must also reform California's pension system for government employees, whose costs to taxpayers for just one of our major pension funds have skyrocketed from $150 million a year a decade ago to almost $4 billion this year. Private-sector workers already struggle to pay for their own retirement. Now they are being forced to pay more and more for the government workers' retirement, at the very time their own retirement accounts have declined. What is worse, in five years those pension costs will grow to well over $10 billion per year, and keep growing from there." (Los Angeles Times)

San Francisco Labor Unions Sue to Stop Pension Ballot Measure
Excerpt: "San Francisco's largest city labor unions have filed a lawsuit asking a judge to strip a measure from the November ballot that calls for city employees pay more into the retirement system and to pick up more of the health care costs for their dependents." (PLANSPONSOR.com)

Can the Illinois Public Pension Catastrophe Be Stopped?
Excerpt: "Public pension systems in Illinois have long served as vehicles for the government to borrow money out of the view of taxpayers. In place of even higher public employee salaries, politicians have made unfunded pension promises extending far beyond their own terms in office. These debts are coming due, placing a massive burden on state and local budgets." (Chicago Tribune)

Can the Illinois Public Pension Catastrophe Be Stopped?
Excerpt: "Public pension systems in Illinois have long served as vehicles for the government to borrow money out of the view of taxpayers. In place of even higher public employee salaries, politicians have made unfunded pension promises extending far beyond their own terms in office. These debts are coming due, placing a massive burden on state and local budgets." (Chicago Tribune)

New Pension Rules May Depend on Where You Work, When You Started Work and If You Were Elected
Excerpt: "In a handful of states, employees will increase their personal contributions to the plan, or begin contributing for the first time." (Governing)

Philadelphia, PA, Public Workers Rush to Get DROP Pension While They Can
Excerpt: "The Deferred Retirement Option Program allows employees eligible for retirement to pick a retirement date four years in the future. That decision freezes the employee's pension benefit and prompts the city to start putting the person's pension payment aside in an account with a 4.5 percent yearly interest rate." (The Philadelphia Inquirer)

Ohio Public Pension Systems' Refusal to Disclose Records Draws Attention of State Lawmakers
Excerpt: "Two state lawmakers want to open up state retirement records to public scrutiny after The Plain Dealer and seven other Ohio newspapers were denied access to the information." (Cleveland Live, Inc.)

How Local Governments Are Addressing Retiree Health Care Funding (PDF)
15 pages. Excerpt: "The brief follows up on a 2009 survey in which 206 local governments indicated they were likely to adopt a long-term strategy to strengthen their retiree health care funding, including establishing a Section 115 trust (governmental); medical subaccount [401(h)]; or Voluntary Employee Beneficiary Association (VEBA) trust [501(c)(9)];issuing OPEB bonds; increasing the years of service for vesting for RHC;increasing the age at which RHC is available; terminating retiree health care for all new hires." (Center for State and Local Government Excellence)

States Test Whether Public Pension Benefits Can Be Reduced for Retirees
Excerpt: "Lawmakers in Colorado, Minnesota and South Dakota voted earlier this year to limit cost-of-living increases they previously had promised to thousands of current and future retirees, who courts historically have protected from benefit reductions." (The Pew Charitable Trusts)

[Opinion] Illinois Public Employees Who Think State Constitution Guarantees They'll Get All Their Pension Benefits May Have Another Think Coming
Excerpt: "[A legal opinion from a Chicago law firm] acknowledges that the constitution creates a contractual agreement between the workers and the state's employee pension funds. But it concludes that neither the constitution nor the law say the state is a guarantor of that obligation." (Chicago Tribune)

Oklahoma Teachers' Retirement System May Sue Board of Education for Refusing to Make Required $35 Million Employer Contribution
Excerpt: "Following budget cuts by the state Legislature this year, the Board of Education approved its own budget June 29, directing funding to education programs, rather than to the pension fund . . . ." (Pensions & Investments; registration may be required)

Who Should Pay for the Trillion-Dollar Pension Gap?
Excerpt: "[G]iven that we've promised at least $1 trillion more in retirement benefits to public employees than we have put aside to pay for them, who should pay to make up the difference? Should it be the employees themselves who pay, through cutbacks to annual cost-of-living adjustments for current retirees or tweaks to benefits that those still working will receive?" (New York Times; free registration required)

Taming the Whale Lurking in Pension Financing: Overly Optimistic Investment Return Assumptions
Excerpt: "To make the whale work out if earnings are 7% instead of 7.75%, contributions need to be increased from 24% to 30%, starting the first date of hiring. If earnings are 6%, contributions need to be a whopping 39% of salary cost." (Pensions & Investments)

Huge Battle Looms Over Public Pensions; Who Will (Who Should) Foot the Bill?
Excerpt: "There's a class war coming to the world of government pensions. The haves are retirees who were once state or municipal workers. Their seemingly guaranteed and ever-escalating monthly pension benefits are breaking budgets nationwide. The have-nots are taxpayers who don't have generous pensions." (Mike "Mish" Shedlock)

[Guidance Overview] Arizona Ban on Benefits for State Employees Domestic Partners on Hold
Excerpt: "Domestic partners of Arizona state employees may be receiving benefits next year, now that a federal judge has blocked a state law that would have prohibited the state government from extending benefits to them." (Thompson Publishing Group Inc.)

Los Angeles Takes Aim at Pensions
Excerpt: "With pension costs expected to consume nearly a third of the city budget within five years, the City Council on Tuesday ordered new studies of ways to rein in the expense, potentially setting up conflicts with the city's powerful unions. " (LA Daily News)

Nevada Slashing Health Benefits to State Workers
Excerpt: "Facing a $111.2 million shortfall to support existing benefits, the Public Employee Benefits Plan board voted Thursday for sweeping changes that will drastically reduce benefits for active state workers and retirees." (Nevada Appeal)

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