Headlines about "Government plans - state and local - misc"
Gathered from the web by the editors at BenefitsLink.com.
Public Pension Shortfall is Worse than You Think
Excerpt: "A new research paper, 'Public Pension Promises: How Big are They and What are They Worth?,' from the University of Chicago looks at nationwide public pension obligations and funding. . . . The bottom line of this paper is that: a) By the most realistic measure, public pensions in America are underfunded by more than $10 trillion. b) Future taxes to pay for the benefits promised but not funded by current political leaders will be very burdensome and will distort the economy. Future generations will curse us for this." (The Reason Foundation)
Public Pension Promises: How Big Are They and What Are They Worth?
Excerpt: "We calculate two present value measures of already-promised state pension liabilities using discount rates that reflect their risk. If benefits have the same priority in default as general obligation debt, aggregate underfunding is $1.21 trillion. If states cannot default on these benefits, underfunding is $3.12 trillion. The first measure is a lower bound on the value of the liability to taxpayers, and is more than the $0.94 trillion in state municipal debt. The second measure is a better benchmark for funding adequacy. We also estimate broader concepts of accrued liabilities that account for projected salary growth and future service." (Social Science Research Network)
West Virginia Considering Alternatives to Dropping Retiree Health Care for New State Employees
Excerpt: "Newly hired state employees in West Virginia would have to pay the entire cost for their health insurance after retirement under a current proposal by the state Retiree Health Benefit Trust and Public Employees Insurance Association Finance Board. West Virginia's share of Other Post-Employee Pension debt, affecting state employees, is estimated at $7 billion, and the RHBT and PEIA Finance Board is seeking alternative suggestions to eliminating retiree health insurance benefits for new hires." (The Intelligencer / Wheeling News-Register)
Philadelphia Confronts the Cost of Employee Benefits
Excerpt: "To help inform the public discussion, the Philadelphia Research Initiative, with assistance from the Pew Center on the States, sought to update the situation regarding pension and health-care conditions in Philadelphia and the comparison cities, based on interviews with officials as well as the latest available documents. We reviewed policy changes and proposals that have arisen regarding Philadelphia over the past year and a half. We interviewed two dozen experts on employee benefits from across the spectrum, and three of the four major unions that represent Philadelphia city workers provided varying amounts of information." (The Pew Charitable Trusts)
Text of California Governor's Pension Reform Proposal (PDF)
2 pages. Excerpt: "For new employees hired on or after July 1, 2009 this proposal would: Return to pre-SB 400 retirement formulas for Miscellaneous, Industrial, State Safety, and Peace Officer retirement categories. Repeal the SB 183 expanded definition of the State Safety retirement category. Change the benefit formula for Firefighter and Highway Patrol from 3 percent at age 50 to 3 percent at 55. Compute final compensation for Peace Officers, Firefighters, and Highway Patrol based on the highest 3 years instead of the highest 1 year." (State of California, Office of the Govenor, via The Sacremento Bee)
Charleston, West Virginia, Still Allows Employees to Trade Sick Days for Health Insurance
Excerpt: "Eight years after state government stopped the practice for new hires, the city of Charleston continues to let employees trade unused sick days for health insurance premiums in retirement. And despite the fact that the city, like the state, has a hefty unfunded liability for health insurance promised to its retirees, City Manager David Molgaard says the city comes out ahead by using the incentive." (Charleston Daily Mail)
Los Angeles City Council Approves Early Retirement Plan Despite Opposition
Excerpt: "The proposal also calls for postponing raises for thousands of workers to balance the budget without layoffs or closing City Hall twice a month. But one union threatens a court challenge." (Los Angeles Times)
Three Out of Four Public Employers Consider Increasing Employee Deductibles, Co-Pays or Premiums
Excerpt: "Public employers nationwide are modifying their employee health care benefits to include more cost-saving measures, according to a recent survey conducted by the International Foundation of Employee Benefit Plans. The financial crisis and escalating health care costs are motivating public plan sponsors to change both their plan design and plan funding. The survey found that 72 percent of public employers are increasing or considering an increase in their employees' deductibles, coinsurance or co-pays. In addition, 74 percent of public employers are increasing or considering an increase in employee premiums." (Wolters Kluwer)
Benefit Cuts Possible for Future Iowa Public Employee Retirees
Excerpt: "Iowa's largest public employee pension fund could be forced to reduce benefits for future retirees because of the global recession, which has worsened the fund's existing financial troubles, state officials said Thursday. The Iowa Public Employees' Retirement System has 312,000 members who include current and former employees and retirees of state government, cities and counties, public schools and other agencies. . . . A study is under way to examine such factors as retirement ages, cutting early retirement subsidies, requiring new and current employees to earn pensions more slowly, and increasing the number of years used to calculate final average salaries for pension purposes. The research will also explore additional increases in contributions by taxpayers and employees, coupled with benefit reductions. Recommendations are expected in September. They could include benefit changes, said Donna Mueller, IPERS's chief executive." (The Des Moines Register)
Public Pension Finance Symposium: The Rationale for Traditional Actuarial Models (PDF)
35 pages. Excerpt: "This paper examines the degree to which certain actuarial methods satisfy public pension plan funding objectives. It compares the funding patterns that result from a conventional actuarial approach used by the majority of public plans with patterns that result from the 'market value of liability' (MVL) approach. The comparison is made by applying these approaches to a modeled public plan based on historical demographic, economic, and investment data over the period from 1978 to 2008. The paper finds that funding under the MVL approach would likely result in rapid and erratic changes to a public plan's normal costs, accrued liabilities, and funded levels, largely due to changes in the MVL discount rate. By contrast, conventional funding results in measures that are more stable and predictable over time. Consequently, the paper concludes that the conventional approach is more effective in meeting the funding objectives of public pension plans. The serious instabilities in the MVL measures would most likely lead either to erratic demands on government resources or plan terminations. If the MVL approach were applied, we believe it would ultimately be abandoned as being too unstable for state and local governments." (Society of Actuaries)
[Guidance Overview] Smith Barney Fails to Get Florida Pension Case Moved Out of Court
Excerpt: "The U.S. District Court for the Southern District of Florida has declined to enforce arbitration clauses contained in account agreements between the City of Delray Beach Police and Firefighters Retirement System and Smith Barney. According to the court's decision, chairman of the retirement system's board William Adams signed Pension Consulting Agreements and other documents for Smith Barney. The agreements have an arbitration clause that says contract disputes must be resolved by arbitration. Smith Barney moved to remove the case from court and have the court direct the board to proceed through arbitration. However, the board argued that Adams lacked authority to execute the account agreements, and the court agreed." (PLANSPONSOR.com; free registration required)
Los Angeles Weighing Retirement Option for Reducing City's Workforce
Excerpt: "Looking to avoid the need for layoffs and furloughs, Los Angeles Mayor Antonio Villaraigosa and the City Council are weighing a plan to offer early retirement to thousands of city workers, some of whom would receive an incentive of at least $15,000 to leave. As it attempts to close a $530 million budget gap, the mayor's bargaining team hopes to reduce the workforce by 2,400 while giving no pay increases for most civilian employees in the next two years, according to several sources familiar with the confidential salary talks" (Los Angeles Times)
Benefits for Ex-City Employees Examined in San Diego
Excerpt: "For weeks after leaving their city jobs, more than 100 San Diego employees enjoyed benefits such as health insurance, holiday pay and pension contributions, according to a new audit. In the past year, the city spent $660,000 to pay the benefits to 111 employees, the report by City Auditor Eduardo Luna found. The workers received the benefits by staying on the payroll while they were paid vacation and sick time they had coming. In part because of union contracts, they were treated as active employees and enjoyed the same benefits as before." (The San Diego Union-Tribune)
Orange County, California, Workers Vote to Change Pension Plan, Retirement Age
Excerpt: "Thousands of Orange County workers will begin voting Saturday on a new contract that includes a two-tier 'hybrid' retirement plan that would require a new state law before it could go into effect. The proposed option would push back the retirement age to 65 from 55 and result in a smaller pension. But the amount of money workers would pay into their pension plan would be cut by nearly half, and the county would match up to 2 percent for a 401(k), according to the Orange County Employees Association, which represents the workers and is backing the proposal." (City News Service)
[Opinion] Failing to Fund Retirement Benefits: The Downside of 'Pay-As-You-Go'
Excerpt: "In addition to digging a deeper hole, there are three other consequences of pay-as-you-go: higher liabilities and expenses in financial statements; lost and lower investment earnings; and a weakened collective bargaining position." (Governing.com)
CalPERS Plan To Raise Health Care Premiums Receives Final Approval
Excerpt: "On Wednesday, the CalPERS Board of Administration voted to give final approval to a proposal to raise public workers' and retirees' health insurance premiums by an average of 2.9%, the lowest rate increase in 14 years, the Sacramento Business Journal reports . . . ." (California HealthCare Foundation)
The West Virginia Teachers' Retirement System: DC to DB to DC?Then Back Again
Excerpt: "Until June 30 of this year, participants who transferred into the DB plan also have the option to make up for not making? the same contributions by purchasing benefits credits. Since DC plan members only contributed 75% of what DB members? contributed? (4.5% versus 6%), Lambright says, the basic service? transfer was set at 75%. Those who want to purchase the remaining 25% service credit pay a cost based on the 1.5% of pay not contributed, plus 4% interest." (PLANSPONSOR.com; free registration required)
Four New Mexico Public Employee Unions Sue to Stop 'Wage Tax' for Pensions
Excerpt: "Four of New Mexico's public employee unions are suing the state to stop the enactment of a new law that decreases the state's payment into public employee pension funds by 1.5 percent for two years. . . . If enacted . . . the law will force more than 66,000 public employees to shore up the state's budget deficit by paying 1.5 percent more out of their paychecks into PERA and ERB, the state's public employee pension funds." (The New Mexico Independent)
California's Governor Opposes the CalPERS Proposal to Spread Losses Over 30 Years
Excerpt: "The state's largest pension plan is scheduled to vote today on a proposal to spread this year's severe investment losses over 30 years and save cash-strapped state and local governments hundreds of millions of dollars initially. But Gov. Arnold Schwarzenegger opposes the move as a 'pass-the-buck-to-our-kids idea.' The California Public Employees' Retirement System, the fund for state and local government workers, has to take action to cover tens of billions in losses from the recession. Its holdings were valued at $239.2 billion at the start of last July but plummeted nearly 30% by the end of March, a month when key stock market indexes fell to their lowest levels in more than a decade." (Los Angeles Times)
Alabama Cancels Deferred Compensation Plan with Nationwide
Excerpt: "The State Personnel Board cited a lack of financial transparency Wednesday when it canceled a contract with Nationwide Retirement Solutions to provide a deferred compensation plan for active and retired state workers in Alabama. The board voted 3-0 to cancel the contract, with board members saying the company is not providing financial information they want." (AP via Forbes.com)
Texas's Teachers' Pension Fund Adopts Pay-to-Play Limits
Excerpt: "Texas's $77.9 billion Teacher Retirement System, the sixth-largest public pension fund in the U.S., has adopted a policy prohibiting pay-to-play by companies trying to win business managing investments. As of July 1, those seeking management work from the fund will face disclosure requirements regarding placement agents and restrictions on the fees paid them, according to the new policy." (Bloomberg L.P.)
Sources of Funding of Public Pension Plans (PDF)
1 page. Excerpt: "Unlike private-sector defined benefit plans, public-sector pension plans are not funded entirely by employers. They are financed by workers as well as employers . . . . Public pension revenue relies on three sources: earnings from investments, government (employer) contributions, and worker contributions. Public pension plans depend largely on investment earnings, because they are generally financed on a 'funded' basis rather than a pay-as-you-go basis." (Employee Benefit Research Institute)
Tax-Exempt/Governmental Plans Guidebook
Excerpt: "[The website is] devoted to following legal developments related to retirement and benefit plans maintained by tax-exempt organizations and governmental entities[.]" (ERISA Fiduciary Guidebook)
Massachusetts Governor Exults in Signing Pension Reform Bill
Excerpt: "Gov. Deval L. Patrick, struggling all year with multibillion deficits, squabbles with the Legislature and scandals erupting over legislative payoffs and bid rigging, broke through that Beacon Hill funk today and was beaming over signing a bill closing loopholes in state pension laws that have outraged the public for years. . . . The 'one day-one year rule' allowed legislators whose terms expire Jan. 1 to take a year of pension credit for serving one day in a calendar year. 'King for a day' pension rules let employees retire on accidental disability pensions at a pay rate of their supervisors if they worked for one day in that job as a fill-in. The 'termination allowance' gave a substantial pension boost to elected officials if they were voted out of office." (Worcester Telegram & Gazette Corp.)
New Mexico State Workers Sue Over Pension Changes
Excerpt: "Multiple unions representing more than 60,000 state and public school employees filed a lawsuit against the state of New Mexico on Monday, accusing the state of violating employees' constitutional rights by decreasing contributions to public employee pension funds and making employees fill the gap. 'We believe this was in order to remedy a general budget shortfall, and we believe it's just not fair,' said attorney Shane Youtz at a news conference . . . ." (KRQE News 13)
Advisory Committee on Tax Exempt and Government Entities' Eighth Report (PDF)
283 pages. Excerpt: "This year there are four (4) reports on the following topics: Exempt Organizations: Recommendations to Improve the Tax Rules Governing International Grantmaking; International Pension Issues in a Global Economy: A Survey and Assessment of IRS' Role in Breaking Down the Barriers; Record Retention Requirements for Tax-Exempt Bonds and Tax Credit Bonds: A Specific Proposal for Published Guidance; Federal-State-Local Government Compliance Verification Checklist for Public Employers" (Internal Revenue Service)
Public Employers Respond to Financial 'Crisis' and Rising Health Care Costs by Raising Employee Cost Sharing, Premiums
Excerpt: "Nearly three-fourths of public employers are increasing or considering increasing their employees' cost sharing for health insurance, according to a recent survey conducted by the International Foundation of Employee Benefit Plans (IFEBP)." (Wolters Kluwer)
Massachusetts House and Senate Agree on Plan to Curb State Pension Excesses
Excerpt: "State lawmakers agreed today to end some of the most egregious pension abuses that have plagued the Massachusetts state retirement system for decades, cutting a deal to eliminate sweetheart provisions, tighten the rules, and -- they hope -- repair some of the damage inflicted on Beacon Hill by a series of pension controversies. The House and Senate are expected to vote Thursday on the provisions, and the governor vowed to quickly sign the bill. The moves followed a recent series of Globe stories that revealed how public officials had enriched themselves by exploiting special provisions in state pension law." (The Boston Globe)
[Opinion] Time to Drop DROPs? Alice-in-Wonderland Math Can't Work for Deferred Option Retirement Plans
Excerpt: "The mere existence of a DROP plan should signal that something is wrong with the pension plan. The idea of providing incentives to seniority workers to keep them in service -- because their pension plan encourages a life of leisure well before age 60 -- is a signal that the pension benefit is simply too rich. But early retirement plans with full lifetime benefits are simply not sustainable in today's world of increased longevity, shrunken government budgets and underwater pension fund portfolios. While most workers in the private sector must now toil until or beyond age 65 because their 401(k) accounts are insufficient to retire, the public sector continues to act as if nothing has changed in the world around them. Further sweetening the pot with what some might call a bribe to remain working is a Mad-Hatter-meets-Rube-Goldberg scheme." (Governing.com)
New York Governor and Public Employee Unions Agree on Limits for New Pensions
Excerpt: "Gov. David A. Paterson and the state's public employee unions announced an agreement on Friday that would reduce pension benefits for future public employees and save the state billions of dollars in an attempt to control ballooning costs for retirees. To win their support for the deal, the governor provided the unions with significant incentives and backed off earlier demands for concessions from current employees." (The New York Times; free registration required)
Chrysler Speeds Past Legal Limits in Race to Live; Bondholders, Step Aside!
Excerpt: "Today was supposed to be the day that Chrysler LLC sold itself to Fiat and embarked on a new, government-designed chance at survival. Instead, its lawyers are arguing in a federal appeals court this afternoon to please, please let the sale go through." (James Pressley on Bloomberg.com)
[Opinion] Time to Drop DROPs
Excerpt: "The mere existence of a DROP plan should signal that something is wrong with the pension plan. The idea of providing incentives to seniority workers to keep them in service -- because their pension plan encourages a life of leisure well before age 60-- is a signal that the pension benefit is simply too rich. But early retirement plans with full lifetime benefits are simply not sustainable in today's world of increased longevity, shrunken government budgets and underwater pension fund portfolios." (Governing.com)
[Guidance Overview] Presentations by IRS at April 2008 Governmental Plans Roundtable
Powerpoint slides. Excerpt: "The following sessions were presented at the Roundtable: Navigating the Staggered Remedial Amendment Period . . . Requirements Relating to Section 414(d) Governmental Plans . . . EPCU and Examinations Efforts . . . Federal State and Local Governments (FSLG) . . . EPCRS & Governmental Plans . . ." (Internal Revenue Service)
New York Governor Vetoes Routine Extension of Pension Provision; Would Have Provided More Generous Benefits
Excerpt: "Paterson shocked Capitol insiders by vetoing a routine extension of a law that lets newly hired police and firefighters join an older plan no longer available to most public employees. The vetoed plan allows police officers and firefighters to retire after 20 years at half salary. As a lawmaker, Paterson routinely supported the measure." (NYDailyNews.com)
[Guidance Overview] Pension Legislation in the States During 2009 (as of May 1, 2009)
Excerpt: "This report summarizes major pensions and retirement enactments in the state legislatures as of April 20, 2009. At that time, nearly 40 of the 50 state legislatures and the Legislature of Puerto Rico remained in session. This report is therefore an incomplete review of what will have been enacted by the end of legislative sessions, most of which will have ended by July 1, 2009." (State Legislatures Magazine, National Conference of State Legislatures)
New York City Labor Unions Agree to Reductions in Health Benefits
Excerpt: "The agreement imposes the $50 to $100 co-payments for about one-fifth of current and retired city employees, and eliminates coverage for preventive dental care at certain offices. For most other city employees, the plan would restrict certain hospital, ambulatory and hemodialysis coverage to network providers and would implement several other administrative cost-saving measures." (New York Times)
Pennsylvania Legislators Unanimously Pass Pension Forfeiture Bill; Accelerates Effective Date of Cessations
Excerpt: "[Pennsylvania] House lawmakers voted unanimously Monday to more quickly cut pension benefits access for state employees who plead guilty to crimes." (CitizensVoice.com)
[Opinion] The Staying Power of Pensions in the Public Sector (PDF)
Excerpt: "This article explores why DB plans have 'staying power' in the public sector, from the perspective of employers, employees, and taxpayers. It concludes that pensions are an effective way to meet the objectives of all three stakeholder groups, suggesting that the public sector ought not to mimic the private sector trend away from DB pensions." (National Institute on Retirement Security)
[Opinion] Dumping of Defined-Benefit Plans By Governmental Employers Has a Cost, Too
Excerpt: "Accounting rules can require pension costs to accelerate in the wake of a freeze, and maintaining two plans is more costly than operating one. . . . Our research shows that pensions are the most fiscally responsible way to fund retirement. The economic efficiencies embedded in pensions enable them to deliver the same retirement benefit at half the cost of individual accounts." (National Institute on Retirement Security)
Almost 700 Retired Public Educators in New York State Are in '6-Figure Club'
Excerpt: "The 690 school retirees join 899 state and local government workers in the six-figure state pension club." (TimesUnion.com)
Database Online of California State Pensioners Receiving More than $100,000 Annually
Excerpt: "The information below was obtained under the Freedom of Information Act from the California Public Employees Retirement System (CalPERS)." (California Foundation for Fiscal Responsibility)
Nevada Legislature Approves Bill Cutting Benefits to Public Employees
Excerpt: "A bill that saves the state millions of dollars by cutting public employee retirement and health care benefits won approval Thursday night on votes of 19-2 in the Senate and 41-0 in the Assembly. . . . During hearings on SB427, both Republican and Democrats said benefit reductions were necessary to guarantee the continued solvency of the Public Employees Retirement System and the Public Employees Benefits Program." (Las Vegas Review-Journal)
City and County Government Benefits Comparison Tool
Excerpt: "This tool allows you to compare retiree benefit data of localities of similar size and location. You will find: Detailed health care and pension data on the typical benefits cities and counties offer their retirees. How they pay or plan to pay for these benefits. You can search by population size; state; geographic region; size of the general fund revenue." (Center for State and Local Government Excellence)
New Jersey Governor Orders Review of Public Employee Health Insurance Plans to Stem Rising Costs
Excerpt: "Forecasting a 'double-digit increase' in health care premiums next year for local employers enrolled in the state's public employee health insurance plans, Gov. Jon Corzine today ordered a review of possible steps to hold down the costs. The governor directed two state commissions overseeing health benefits for public employees to consider a series of controls on employers that participate in the state plan. The proposed reforms would help reduce the burden on local school districts and other employers as the state grapples with declining funds and rising health care costs, Corzine said." (NJ.com)
Nevada PERS Reform Will not Include Age Hike for Pension Withdrawals
Excerpt: "Nevada Assembly Majority Leader John Oceguera said negotiators have reached a tentative agreement on reforms to the financially strapped Public Employees Retirement System (PERS). The Las Vegas Review-Journal reports that Oceguera said the tentative agreement does not include a requirement demanded earlier by Senate Minority Leader Bill Raggio that no pensions should be given to public employees before they turn 62." (PLANSPONSOR.com; free registration required)
Comparison of ERISA Pension and State Pension Protections
Excerpt: "You asked whether any state has adopted Employees Retirement Income Security Act of 1974 (ERISA) pension fund mismanagement protections. You also asked for a comparison of the ERISA provisions that are designed to protect private-sector employees from pension plan mismanagement with state law provisions designed to protect public pension plans from mismanagement by the state treasurer." (Blogness)
Connecticut House Approves Two Health Insurance Pooling Bills
Excerpt: "The first measure would create a public health insurance pool open to all residents. The pool, intended to compete with rather than replace private insurance, would be based on the existing pool for state workers . . . . The second measure would allow local governments, small businesses and not-for-profit groups join the state employee insurance plan. The bill would increase the current pool's membership from 200,000 to an estimated 300,000." (Kaiser Family Foundation)
One of Los Angeles' Biggest Pensioners Warns of the Costs
Excerpt: "Los Angeles Councilman Bernard Parks, City Hall's budget committee chief who is warning that soaring payroll and pension costs threaten the city's financial stability, receives $22,000 a month in city retirement benefits, in addition to his $178,789 a year salary, records and interviews show." (Los Angeles Times)
[Opinion] Is 'Your Mattress' a Valid Retirement Savings Option? The Implications of Financial Turbulence for Plan Sponsors (PDF)
7 pages. Excerpt: "In conclusion, current market conditions have participants worrying, rightfully so, about the security of the retirement investments, and, consequently, making the wrong decisions when trying to protect themselves. The decisions occur due primarily to fear and misunderstanding. It is incumbent upon Plan Sponsors to fully understand their participants and their participants' needs, and to design plans that provide the helpful investments and tools ? in all economic conditions." (National Association of Government Defined Contribution Administrators, Inc.)
[Opinion] Groom Law Group Comments on IRS Pilot Government Plan Questionnaire (PDF)
5 pages. Excerpt: "Groom Law Group submitted [a] letter to the IRS to provide comments on the Government Plan Survey released in February 2009 and sent to a pilot group of 25 governmental plans. We provide comments on two distinct topics ? (1) steps that might be taken prior to the broader distribution of the Survey and (2) steps that might be taken to improve and make the Survey more manageable for governmental plans." (Groom Law Group)
Bill Enables California Legislature to Identify and Address Concerns in CalPERS Additional Retirement Service Credits Program
Excerpt: "A bill by Assemblyman Roger Niello (R- Fair Oaks) to provide transparency regarding Additional Retirement Service Credits (ARSC) in the California Public Employees Retirement System (CalPERS) was unanimously approved today by the Assembly Appropriations Committee and now heads to the Assembly Floor. The Additional Retirement Service Credit program enables eligible CalPERS members to purchase up to five years of service credit to be applied toward retirement benefits. It is sometimes referred to 'air time' because members' benefits are based upon these years even though they were not directly involved in public service at the time." (Rocklin & Roseville Today)
Resources for GASB Invitation to Comment on Pension Accounting and Financial Reporting
Excerpt: "The Governmental Accounting Standards Board currently is reviewing Statements 25 and 27, standards that provide guidance on pension accounting and financial reporting. In April 2009, GASB distributed an Invitation to Comment to solicit perspectives of interested individuals and groups regarding possible changes to these standards. Responses to the ITC are due July 31, 2009. Listed [on the target page] are resources pertaining to the ITC. Portions of the Invitation to Comment reflect views held by those who believe that public pension financial reporting should include plans' so-called market value of liabilities." (Governmental Accounting Standards Board)
[Guidance Overview] The GASB's Invitation to Comment on Pension Accounting and Reporting Standards (PDF)
Excerpt: "On March 31, 2009, the Governmental Accounting Standards Board (GASB) issued its Invitation to Comment (ITC) on potential changes in accounting and financial reporting standards related to public pensions. The ITC is an early step in the GASB's project to review these standards, and is intended to encourage comments from interested parties before the GASB begins its formal deliberations. Written comments are due to the GASB by July 31, 2009, and a public hearing is scheduled during the Board's regular meeting on August 26, 2009. This article summarizes the ITC, along with various arguments suggested in the ITC for and against potential changes to the standards. However, the article does not provide a detailed evaluation of the arguments, which will be done in a separate paper." (Gabriel, Roeder, Smith & Company)
Wellness Program Saves Kalamazoo County, Michigan, About $900,000
Excerpt: "Since instituting a work-site-wellness program in 2006, Kalamazoo County has trimmed about $900,000 in health-care costs annually . . . . Kalamazoo County's efforts have succeeded because of the support of administrators and an incentive program in which employees earn prizes and paid personal time in exchange for taking weight-management classes, walking and participating in health screenings . . . ." (The Kalamazoo Gazette)
Illinois Lawmakers' Pension Perk Scrapped; Now They're Like Other State Workers
Excerpt: "State lawmakers voted Wednesday to wipe away a lucrative pension perk and instead have themselves treated like any other state employee. 'The members of the General Assembly should have very similar pension benefits as to what other state employees do. We shouldn't have a sweeter deal and this is one way of moving us in that direction,' . . . . The legislation makes the basis for General Assembly and judicial pensions the average of the highest four years of salary out of their final 10 years of state employment. Currently lawmakers' pensions are based on their final salary." (Daily Herald)
A Tidal Wave Postponed: The Economy and Public Sector Retirements (PDF)
4 pages. A survey of two groups of government managers reveals that the slumping economy is holding back retirements among state and local government employees. (Center for State and Local Government Excellence)
The Tab for Public Employee Retiree Health Care Benefits Is Spiraling Out of Control
Excerpt: "States pay the costs of retiree health care, which range from full coverage for life to more modest benefits, out of their annual budgets. And the tab has been spiraling out of control. In 2008, employer health insurance premiums increased by 5%, or twice the rate of inflation. 'Governments have piled up huge unfunded health care liabilities, the dimensions of which are just now being realized,' writes Lance Weiss in a report released in 2006 by Deloitte titled 'Paying for Tomorrow.' 'Estimates of unfunded liabilities associated with retiree health benefit plans represent a fiscal crisis for many states and municipalities.'" (Cable News Network)
Massachusetts Lawmakers Work to Pass Pension Reform Bill
Excerpt: "Governor Deval Patrick has pushed for reform in the state's pension system. Patrick has called on state workers to give up pension perks and loopholes that allow them to bolster their retirement payouts. One benefit that's being contested is known as Section 10. It's the option for lawmakers who decide not to run for re-election to start collecting on their pensions before they're 55. The Boston Globe reported that combined the state officials now collecting their pensions under the law could pocket up to 3 million dollars over their lifetime." (NECN and Use Labs)
The Public Pension Fund Time Bomb
Excerpt: "To better understand this ticking time bomb it helps to focus on a single state, and New Jersey makes a compelling case study. For one thing, its situation is dire. In June 2008 the state estimated that the plan - one of the nation's largest, covering teachers, state employees, firefighters, and police - had $34 billion less than it needed to meet its obligations. Since then the market value of the plan has dropped from $82 billion to $56 billion (a new estimate of underfunding is due in July). Also, New Jersey is in some ways ahead of the pack in trying to deal with the crisis - Gov. Jon Corzine, a Democrat, made addressing the problem a central theme of his 2005 campaign - and the obstacles it is encountering shed light on the hard choices facing other states." (CNNMoney.com)
Public Pension Funds Are Masking a Funding Crisis
Excerpt: "Public pension funds across the United States are hiding the size of a crisis that has been looming for years. Retirement plans play accounting games with numbers, giving the illusion that the funds are healthy. The paper alchemy gives governors and legislators the easy choice to contribute too little or nothing to the funds, year after year. The misleading numbers posted by administrators of retirement funds help mask this reality: Public pensions in the United States had total liabilities of $2.9 trillion as of Dec. 16, according to the Center for Retirement Research at Boston College. Their total assets are about 30 percent less than that, at $2 trillion." (Bloomberg News via Philly.com)
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