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Actuarial - funding of pensions

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World's Major Economies to Come up $400 Trillion Short on Retirement Savings
"Longer life spans and disappointing investment returns will help create a $400 trillion retirement-savings shortfall in about three decades, a figure more than five times the size of the global economy ... That includes a $224 trillion gap among six large pension-savings systems: the U.S., U.K., Japan, Netherlands, Canada and Australia ... China and India account for the rest." (Bloomberg)
Contributions to Public Pensions Experience Significant Gains
"The 2016 Annual Survey of Public Pensions found that total contributions were $191.6 billion in 2016, increasing 6.6 percent from $179.7 billion in 2015. Government contributions accounted for the bulk of them, $140.6 billion in 2016, increasing 6.5 percent from $132.0 billion in 2015, with employee contributions at $51.0 billion in 2016, climbing 7.1 percent from $47.7 billion in 2015[.]" (U.S. Census Bureau)
[Opinion] How to Steal a Lot of Money from CalPERS, the Nation's Largest Public Pension
"Presumably the mega-pension knows ... all the fees -- asset-based and performance -- it pays its money managers pursuant to fee invoices.... What CalPERS doesn't know is the performance and other fees its managers take directly from the funds they manage for CalPERS without asking, disclosing or invoicing.... [A] software program developed by outside firms determined at the end of 2015 that the pension paid $3.4 billion in performance fees over the past quarter-century to private-equity firms. In 2016, that number was said to be $490 million. Don't believe these figures for a second." (Edward Siedle, in Forbes)
Single Premium Pension Buy-Out Sales in U.S. Surpass $1.4 Billion in First Quarter 2017
"Total assets of buy-out products were nearly $99 billion at the end of the first quarter 2017, nearly 11 percent higher than first quarter 2016." (LIMRA Secure Retirement Institute)
Economic Loss: The Hidden Cost of Prevailing Public Pension Plan Reforms (PDF)
28 pages. "76% of the money coming into public pensions comes from investment earnings. The same figure in 1940 was only 22%. The 2015 Census data show that state pensions are funded at a level of 76.3%... Using models and parameters developed through our 2015 analysis of empirical data, we estimate that if dismantling of pensions continues, the economy will suffer $3.3 trillion in damage in 2025.... Our analysis shows that in 2025 the economy is likely to grow at 4.00%, the same rate predicted by the Congressional Budget Office. 6 This rate, we project, will be dragged down to 3.29% if the dismantling of public pensions continues." (National Conference on Public Employee Retirement Systems [NCPERS])
[Discussion] Funding of DB Plan While Waiver Application Pending
"A client with a traditional DB plan is interested in applying for a funding waiver. One of the biggest disadvantages (based on my experience) is that the IRS makes no promise as to when they will respond. So, how the plan should be funded while the waiver application is pending? Should we assume it will be approved and run the risk of missed contributions, late quarterlies and an excise tax if the waiver is rejected? Or should they continue funding assuming the waiver won't be approved -- in which case, what's the point?" (BenefitsLink Message Boards)
Puerto Rico Public Pension Fund Joins Government's Bankruptcy Case
"The government's request to include the pension system ... was approved by the oversight board [on May 22].... Guy G. Gebhardt, the acting U.S. trustee for the bankruptcy case, said in court documents that he will appoint a retiree committee for participants in the commonwealth's five public pension systems. An ad hoc retiree committee had already asked the court to form an official committee." (Pensions & Investments)
Puerto Rico Goes to Court Over Failing Public Pension System
"Puerto Rico is seeking help from federal court to restructure the debt of the U.S. territory's public pension system, which is projected to run out of money this year. Gov. Ricardo Rossello said late Sunday that the government has been unable to reach a deal with creditors to whom it owes some $3 billion.... Rossello said retired workers will still receive their pensions, and that the government will dip into its general fund once the pension system itself runs out of money." (ABC News)
Pennsylvania Independent Fiscal Office Evaluates Teacher Pension Funding Bill
"The Pennsylvania Independent Fiscal Office ... concludes that the measure would change its financing but would leave benefit provisions intact.... The bill would ... accelerate the amortization of the unfunded accrued liabilities ... by: [1] computing the unfunded liabilities using the market value of assets; [2] providing for a fresh start amortization of the unfunded liabilities; and [3] providing a schedule of payments that would amortize the unfunded liabilities over approximately 20 years, based on a schedule of payments increasing at specified rates." (National Tax-Deferred Savings Association [NTSA])
[Opinion] New Jersey's Stupid Pension Trick: Let's Use Lottery Money!
"The lottery cash is already being used for something. Moving that cash to the pensions means they have to decide to cut something else. Which they would have to do if they simply said 'we're putting more cash in the pensions'. " (STUMP)
[Opinion] The Pension Storm Cometh?
"[T]he pension storm isn't coming, it's been here for years and will only get worse. Whenever people talk about pensions, they typically focus on assets, not liabilities. This is a fundamental mistake because pensions are all about managing assets and liabilities. In short, it's about the funded status, stupid, not bragging about how much money your pension plan makes in any given year. This is especially true in the US where you have mature, chronically underfunded pensions which are poorly governed. No matter what they do, they will never be able to invest their way back to fully-funded status." (Pension Pulse)
Puerto Rico Bankruptcy Pits Investors Against Pensioners
"Puerto Rico's fiscal tug-of-war with pensioners, bondholders, other creditors and its own finances starts a new, uncharted chapter on May 17. That's when a specially appointed federal judge opens bankruptcy proceedings in a case that dwarfs previous public bankruptcies, with nearly $50 billion in unfunded pension liabilities, $74 billion in bondholder debt and dim financial prospects." (Pensions & Investments)
Widening Gap in U.S. Life Expectancy Based on Geographic Location
"[R]ecent gains in longevity aren't being enjoyed equally in all corners of the United States. In fact, depending on where you live in this great country, life expectancy can vary more than 20 years -- a surprisingly wide gap that has widened significantly in recent decades. Researchers attribute this disturbing gap to a variety of social and economic influences, as well as differences in modifiable behavioral and lifestyle factors, such as obesity, inactivity, and tobacco use." (National Institutes of Health)
[Guidance Overview] Credit Quality Declines Won't Trigger PBGC Review (PDF)
"[T]he PBGC removed two items that were listed in its guidance in December as possible triggers for the agency's attention under the program: a significant drop in a sponsor's credit rating and a downward trend of a sponsor's cash flow or other financial factors." (Keightley & Ashner LLP, via Bloomberg Law Pension & Benefits Daily)
[Official Guidance] PBGC Monthly Interest Rate Statement for May 2017
Listed and described are rates that change each month (ERISA 4022 Lump Sum Interest Rates and Variable-Rate Premiums) and rates that change each calendar quarter (ERISA 4044 Annuities, Late Premium Payments and Late Withdrawal Liability). (Pension Benefit Guaranty Corporation [PBGC])
Hidden Debt, Hidden Deficits: 2017 Edition (PDF)
32 pages. "The unfunded obligations of the pension systems sponsored by state and local governments in the United States continue to grow. [This] second annual report on the off-balance-sheet pension promises of state and local governments [studies] in detail 649 pension systems around the United States, including all of the main pension systems of the states, the largest U.S. cities, and the largest U.S. counties. [It reports] on both their own measurements of their costs and obligations, and how these differ from market valuations that are consistent with the principles of financial economics." (Hoover Institution)
[Opinion] New Jersey's Big Pension Gamble
"[T]his latest attempt to shore up its chronically underfunded state pensions by using lottery proceeds is a desperate move which will only kick the can further down the road. It will help at the margin, especially for the state teachers' pension fund, but it's doing nothing to address serious structural flaws that continue to hamper the state's pensions." (Pension Pulse)
Defined Benefit Plan Considerations for M&As
"Transactions occur regularly and come in a multitude of structures and players.... Properly and quickly assessing the deal landscape under a current lens, as well as a forward-looking post-deal lens, can be crucial for the deal to be successful for all involved.... [A chart describes] a few elements to consider from the buyer's perspective and some examples of the impact they can have on the deal[.]" (Milliman Retirement Town Hall)
Looming Tax Reform Spurs Hefty Corporate Pension Contributions
"Facing increased PBGC variable premiums and potential corporate tax reform, U.S. corporations are accelerating their pension contribution schedules. At least four companies have announced significant debt issuances in recent months, the proceeds of which are being used, at least in part, to make hefty pension contributions in 2017, surpassing the original expected contributions that had been announced in 10-K filings[.]" (Pensions & Investments)
[Official Guidance] Text of PBGC Interest Rate Update for Benefits Payable in Terminated Single-Employer Plans, June 2017
"The June 2017 interest assumptions under the benefit payments regulation will be 1.00 percent for the period during which a benefit is in pay status and 4.00 percent during any years preceding the benefit's placement in pay status. In comparison with the interest assumptions in effect for May 2017, these interest assumptions are unchanged." (Pension Benefit Guaranty Corporation [PBGC])
[Guidance Overview] PBGC Walks Back Early Warning Program Expansion (PDF)
"[On] May 10, 2017, PBGC updated the guidance on its website regarding the Early Warning Program. PBGC removed credit deterioration and a downward trend in a company's financial metrics as risk identification factors ... However, PBGC made clear that, in analyzing a transaction under the Early Warning Program, PBGC generally considers a company's credit quality in its analysis.... PBGC clarified that the December guidance was not meant to expand the Early Warning Program and that PBGC has not 'changed the monitoring criteria or the processes involved' in the program." (Groom Law Group)
Recent Developments in U.S. Law Affecting Pension and OPEB Claims in Restructurings
27 pages. "From theory to practice, planning to enforcement, the answers to 42 of the most frequently asked questions can help you prepare, cope or respond to a restructuring.... Understanding the treatment of pension and OPEB obligations in bankruptcy continues to be important in today's business environment and the law relating to the treatment of these obligations continues to evolve." (Latham & Watkins)
NJ Gov. Christie Introduces Plan to Use Lottery Revenue for Pensions
"The state says the plan would immediately reduce unfunded obligations by $13.5 billion for the state's separate pension funds for teachers, public employees, and police and firefighters ... [and] raise the funded ratio of the retirement system from 45 percent to 59 percent. It would provide $37 billion over 30 years." (U.S. News & World Report)
[Official Guidance] Text of IRS Notice 2017-31: Weighted Average Interest Rates, Yield Curves, and Segment Rates Applicable for May 2017 (PDF)
"This notice provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates used under Section 417(e)(3), and the 24-month average segment rates under Section 430(h)(2) ... In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under Section 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008 and the 30-year Treasury weighted average rate under Section 431(c)(6)(E)(ii)(I)." (Internal Revenue Service [IRS])
Multiemployer Pension Plans: Critical Plans Treading Water, Waiting to Drown
"So far: five applications denied, one accepted.... [E]ach denial comes with a letter. [Here is] a rundown.... [The multiemployer pension plan] program is in fairly bad condition at the PBGC, and is currently projected to have a 50/50 chance of running out of cash by 2025. The MPRA is there not merely to try to get some of the [multiemployer pension plans] to be sustaining, but so that the PBGC itself doesn't run out of money. The Treasury isn't interested in allowing for benefit cuts when the plans are just going to land on the PBGC anyway." (STUMP)
Pension Plan Funded Status Increases (PDF)
"During the first quarter of 2017 (Q1 2017), the funded status of the model pension plan ... rose 3 percentage points to 84 percent due to a 4 percent gain in asset value offsetting a 1 percent liability increase.... During the quarter, the yield curve flattened a little, but its general shape remained similar to that of previous quarters: an upward-sloping yield curve that peaks between 20 and 25 years then levels off ... The marginal decrease in yield-curve level resulted in minimal change to the effective interest rate and slightly increased the model pension plan's liability by about 1 percent." (Sibson Consulting and Segal Marco Advisors)
Funded Status of 100 Largest Corporate DB Plans Drops in April by $10 Billion (PDF)
"The deficit swelled to $257 billion from $247 billion at the end of March due to a decrease in the benchmark corporate bond interest rates used to value pension liabilities. Strong investment returns partially offset the funded status decline. As of April 30, the funded ratio fell to 84.9%, down from 85.3% at the end of March." (Milliman)
Another Health System Settles Church Plan Challenge
"A preliminary settlement has been reached in a case challenging the 'church plan' status of pension plans for Franciscan Missionaries of Our Lady Health System.... According to the settlement agreement, Franciscan will contribute $125 million to the plans in the next five years, pay $450 to each of the more than 2,000 participants of the plans who accepted a lump-sum buyout of their balance in 2016, and guarantee participants will be paid the pension benefits they were promised for the next 15 years." (planadviser)
[Official Guidance] Text of Treasury Department Denial of Automotive Industries Pension Fund Application to Reduce Benefits (PDF)
"Treasury has concluded that several of the key actuarial assumptions used for the cash flow projections in the Application are not reasonable. Specifically, the mortality rate assumption, the assumption regarding the rate at which married participants will elect a joint and survivor benefit, and the assumption regarding the probability of benefit commencement of terminated vested participants are not reasonable under the standards in the regulations. Because the Application uses projections that rely on assumptions that are not reasonable, it fails to demonstrate that the proposed suspension is reasonably estimated to achieve, but not materially exceed, the level that is necessary to avoid insolvency. Accordingly, the proposed suspension does not meet the statutory requirements for approval[.]" (U.S. Department of the Treasury)
PublIc Pension Funded Ratio Regains Ground Lost in Q4, Surges to 72.0% (PDF)
"The strong equity returns in Q1 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 $78 billion from the end of December 2016 through the end of March 2017 ... During the first quarter, the deficit dropped from $1.392 trillion to $1.314 trillion. As of March 31, the funded ratio stood at 72.0%, up from 70.1% at the end of December." (Milliman)
2015 PBGC Data Insurance Tables (PDF)
27 pages. "PBGC is now releasing data in groups, as they become available. The first release includes data in the Summary Tables, Claims Tables and Multiemployer Graphical Supplement [showing zone status changes over time, and distribution of administrative expenses]." (Pension Benefit Guaranty Corporation [PBGC])
Retiree-Employee Ratios Are Dooming the Multiemployer Pension
"Even as Congress has taken steps to solve the multiemployer pension problem, the plans continue to face a death spiral. In fiscal year 2016, 10 multiemployer plans went insolvent and requested financial assistance from the PBGC. The federal agency is now giving financial assistance to a record-high 71 multiemployer plans." (Bloomberg BNA)
Multiemployer Pension Funding Study, Spring 2017
"This study reports on the estimated funded status of all U.S. multiemployer plans as of December 31, 2016, and shows the change in funding levels from June 30, 2016. The aggregate funded percentage for multiemployer plans is estimated to be 77% as of December 31, 2016, compared with 76% as of June 30, 2016. The estimated 2016 calendar year investment return for our simplified portfolio was about 7.70%, which would produce a slight gain versus most plans' investment return assumptions." (Milliman)
Pension Indicator, April 2017
"While assets continued on an upward trajectory, this was more than offset by lower bond yields. Regardless, with just two months left before the common June 30 fiscal year-end, plan sponsors are looking at some welcome relief on their balance sheets." (Findley Davies | BPS&M, and Hartland)
Closing a Governmental Pension Plan Increases Costs for Taxpayers
"In 1997, Michigan closed the Michigan State Employees' Retirement System (MSERS), the pension plan for state employees.... [E]mployer contributions to MSERS have risen sharply, from $145 million to $750 million, in the years since the plan was closed to new hires in 1997. This has occurred even as the payroll base has declined by more than $1 billion." (National Public Pension Coalition)
Equities Drive First-Quarter Gains for Plan Sponsors
"Institutional plan sponsors netted investment gains of 4.2 percent at the median in the first quarter of 2017... While Corporate ERISA plans had the largest allocation to fixed income, they also had the largest allocation to high yield, emerging market debt and longer duration investment grade bonds, all of which returned noticeably more than traditional core bonds." (Northern Trust)
CalSTRS Employer Contributions Are Doubling, But Is That Enough?
"The 2014 legislation freezes rates paid by school districts at 20.5 percent of pay, after they more than double to 19.1 percent by the end of this decade. But ... the state rate can continue to increase up to 0.5 percent of pay each year.... Actuaries said CalSTRS, only 64 percent funded last June, is still on track to reach 100 percent funding by 2046. Whether CalSTRS remains on the path to full funding ... will largely depend on whether the state pays enough under the new plan." (Calpensions)
[Opinion] The Keep Our Pension Promises Act of 2017
"KOPPA would create a Legacy Fund in the PBGC. Underfunded multiemployer pension plans would apply to receive money from the Legacy Fund to pay retirees the benefits they earned. When an application is accepted, the money provided by the Legacy Fund is combined with employer contributions and investment income and should be sufficient enough to enable plans in the even worst financial shape ... to cover benefit costs on a year-to-year basis.... The Legacy Fund created by KOPPA would be funded by partially repealing two tax breaks that only benefit wealthy individuals." (Pension Rights Center)
[Opinion] Puerto Rico: Pay-As-You-Exit
"The asset value (now called fiduciary net position) is negative, liabilities are valued at $32.7 billion, and annual payouts to 126,742 retirees total about $1.6 billion not including the $194 million cost of the bonds to make those payments. Yet when we get to the pages on the calculation of the contribution it comes down to ... [a] contribution of one-third of the benefits actually being paid out!" (Burypensions)
State and Local Government Pensions at the Crossroads
"Underfunding, questionable investment decisions, imperfect assumptions on future market returns, declining interest rates, and the structure of defined benefit plans have created a fiscal crisis for many public pension funds. The implementation of several recent GASB pronouncements has made these problems more apparent and distinct to the public. The authors examine the current reporting challenges, describe the approaches taken by some governments, and suggest their own potential solutions." (The CPA Journal)
3M's $19.7B Pension Plan Under DOL Investigation
"3M Co. announced that its $19.7 billion pension plan is under investigation by the Labor Department. The investigation, which began in April 2015, is related to certain private equity investments, plan expenses, securities lending and distributions of plan benefits ... 3M's pension plan is fully funded, and it currently doesn't have a minimum required contribution. In the past three months, 3M contributed $247 million to its U.S. and international plans and expects to contribute approximately $300 million to $500 million more in 2017[.]" (Bloomberg BNA)
Puerto Rico Declares a Form of Bankruptcy
"Puerto Rico has roughly $120 billion of bond debt and unfunded pension obligations to restructure, which dwarfs the second-largest similar episode. When Detroit went bankrupt in 2013, it set the previous record, with about $18 billion of bond debt and retirement obligations.... [T]he governor of Puerto Rico ... petitioned for relief under Title III of a new federal law for insolvent territorial governments, called Promesa. It contains some bankruptcy provisions and has never been used before, so there is no road map to follow." (The New York Times; subscription may be required)
Actuarial Inputs and the Valuation of Public Pension Liabilities and Contribution Requirements: A Simulation Approach
"Discount rates, salary growth rates, cost methods, and mortality tables all influence funding ratios and contribution requirements. Without considering these effects, comparisons of funding ratios across pension systems will produce biased results. The discount rate assumption is the most influential actuarial input on funding ratios and contribution requirements.... The effects of actuarial inputs greatly depend on plan characteristics such as demographic profiles and asset levels[.]" (Center for Retirement Research at Boston College)
[Discussion] FAS87 ASC715 Discount Rates and Moody's Rates
This message thread includes an unofficial monthly report of Moody's Daily Long-term Corporate Bond Yield Averages and Moody's Daily Treasury Yield Averages, used for benchmarking by some corporate pension plans. The most recent entry reports data as of April 28, 2017. [BenefitsLink hat tip to David Rigby, who has provided this update every month since January, 2005.] (BenefitsLink Message Boards)
Rime of the Dynamic Asset Allocation Mariner
"[DB plan] funding ratios are often 'as idle as a painted ship upon a painted ocean.' ... There are only three ways that the captain can work toward the comfort of full funding: [1] Return-seeking assets (wind) ... [2] Interest rate leveraging (tides) ... [3] Cash funding (rowing) ... The closer the plan gets to full funding, the more a duration matched bond strategy under LDI makes sense." (The Principal Blog)
Impact of Mortality Change on U.S. Single-Employer Pension Plan Funding (PDF)
"In December 2016, the [IRS] issued proposed updated mortality tables starting in 2018 for minimum funding requirements for single employer defined benefit pension plans. This study estimates the impact of the proposed change on the single employer pension system as a whole.... On a funding basis, estimated aggregate 2018 Funding Target liabilities increase 2.9% from $2.278 trillion to $2.343 trillion, and the estimated cost of current year benefit accruals (normal cost) increases 1.6%, from $49.6 billion to $50.4 billion.... For PBGC premiums, estimated aggregate 2018 Premium Funding Target liabilities would increase 3.1%, from $2.679 trillion to $2.763 trillion." (Society of Actuaries)
How Lavish Benefit Promises Are Coming Back to Haunt Public Sector Workers
"Benefits are taking a big bite out of school budgets in a number of states that have made lavish pension and retiree health care promises to workers. Connecticut, with one of the worst-funded state pension systems, has seen the cost of supplying benefits to its school employees rocket by 123% over 10 years, so that benefits alone now consume 27% of its public education budgets, up from 18% a decade ago.... In many states, there's little hope that this pressure will end soon." (Investor's Business Daily)
[Opinion] Start Spreadin' the News: Time to Defuse NYC's Pension Bomb
"New York City's pension costs will soon displace social services as the second-biggest spending category in the city budget, consuming the equivalent of more than 80 cents out of every dollar raised by the city's personal income tax. But even with annual contributions approaching the once-unimaginable level of $10 billion a year -- more than the entire budgets of all but a handful of large cities -- the city remains vulnerable to a pension funding crisis within the next few years." (New York Daily News)
Pension Finance Update, April 2017
"Pension plans broke even in April and remain in positive territory through the first four months of 2017. Last month, rising stock markets neutralized the impact of higher pension liabilities (driven by lower interest rates) for both model plans ... Through April, Plan A is up almost 3% and Plan B is up almost 1% so far this year." (October Three Consulting)
[Official Guidance] Text of Treasury Department Notice of Multiemployer Pension Plan Application to Reduce Benefits: Southwest Ohio Regional Council of Carpenters Pension Plan
"The Board of Trustees of the Southwest Ohio Regional Council of Carpenters Pension Plan (SWORCC Pension Plan) ... has submitted an application to reduce benefits under the plan in accordance with [MPRA].... [T]he application ... has been published on the Treasury website, and ... public comments [are requested] from interested parties, including participants and beneficiaries, employee organizations, and contributing employers of the SWORCC Pension Plan." (U.S. Department of the Treasury)
[Opinion] Houston's Financial Future Will Be Decided in Large Part in This Legislative Session
"Houston currently owes $8.2 billion in pension debt -- more than any other city in Texas. It does not have enough money to pay for nearly half of the retirement benefits workers have already earned.... Under the [pension reform proposal currently pending in the Texas legislature], the city would lower its assumed rate of return on investments for all plans from 8 percent or more to 7 percent; reduce benefits for public workers; and implement a financial corridor provision that would cap the city's contributions to the pension plans." (Laura and John Arnold Foundation)
[Official Guidance] Text of Treasury Department Notice of Multiemployer Pension Plan Application to Reduce Benefits: IAM Motor City Pension Fund
"The Board of Trustees of the International Association of Machinists Motor City Pension Fund (IAM Motor City Pension Fund) ... has submitted an application to reduce benefits under the plan in accordance with [MPRA].... [T]he application ... has been published on the Treasury website, and ... public comments [are requested] from interested parties, including participants and beneficiaries, employee organizations, and contributing employers[.]" (U.S. Department of the Treasury)
[Official Guidance] Text of Treasury Department Notice of Multiemployer Pension Plan Application to Reduce Benefits: Alaska Ironworkers Pension Trust
"The Board of Trustees of the Alaska Ironworkers Pension Trust ... has submitted an application to reduce benefits under the plan in accordance with [MPRA].... [T]he application ... has been published on the Treasury website, and to... public comments [are requested] from interested parties, including participants and beneficiaries, employee organizations, and contributing employers[.]" (U.S. Department of the Treasury)
Year-End 2016 Funding Status, Discount Rates, Asset Allocations and Contributions for WTW 100 Plans
"For the third year running, average funded status for the [Willis Towers Watson] Pension 100 was 82.4%. Most of these companies contributed more to their pensions in 2016 than in 2015. Two developments will be key in 2017: whether interest rates rise as they did toward year-end 2016, and whether tax reform will occur." (Willis Towers Watson)
Jacksonville City Council OKs Bill to Close Pension Funds
"The Jacksonville City Council unanimously approved a bill closing the $2 billion Jacksonville (Fla.) City Retirement System and $1.8 billion Jacksonville Fire & Police Pension Fund. The retirement systems will close Sept. 30 and employees hired on or after Oct. 1 will be automatically enrolled in the city's $24 million ... retirement system [which] consists of the general employees' and corrections officers' pension funds." (Pensions & Investments)
[Opinion] American Benefits Council Letter to PBGC Urging Review of Early Warning Program
"Suggested changes to the program ... [1] Suspend the program for six months while it is evaluated and reformed.... [2] Reform the criteria for the program.... [3] Obtain board of directors approval for large plan involuntary terminations based on long-run loss determinations.... [4] Provide safe harbors from the Early Warning Program.... [5] Reform the 'sanctions' under the program.... [6] Preclude PBGC from intervening in company businesses without statutory authorization.... [7] Cease publicizing Early Warning Program agreements." (American Benefits Council)
Flurry of Pension Rescue Filings May Indicate Renewed Confidence
"Four more financially beleaguered multiemployer pension plans are ... seeking Treasury Department permission to cut benefits.... The filings show 'increased trustee and adviser confidence' that plan trustees now 'know what standards will be applied and that approval is possible,' Dominic DeMatties, a partner with Alston & Bird, [said] ... That's in the wake of the first approval of a request to cut benefits and as plans have digested final regulations issued a year ago[.]" (Bloomberg BNA)
Understanding Public Pensions: A Guide for Elected Officials
"Since 2009, all states have made modifications to their retirement plans to help ensure their long-term sustainability.... [T]here are no one-size-fits-all solutions from state to state or even from plan to plan to ensure that pension plans are properly financed and effectively managed to pay benefits for the long-term.... Any modifications should be carefully considered to avoid unintended consequences or costs." (Center for State & Local Government Excellence)
Why Would Congress Bail Out Miners' Pensions?
"If legislators don't act by the end of April, miners will lose their health-care benefits. They may soon lose their retirement benefits, too.... The miners argue that Congress has an obligation to step in because of a deal signed between the federal government and the United Mine Workers in 1946 to end a nationwide strike.... But Congress is in a tight spot. If it bails out the miners, why stop there? Why not bail out all of the other pension funds, private and public, that are on the brink of insolvency?" (The Atlantic)
The First Dinosaur Has Died: Multiemployer Plan Runs Out of Money, Other Insolvencies Loom
"The New York Teamsters Road Carriers Local 707 Pension Fund (the 'Local 707 Pension Fund') is dead, reportedly having run out of money in early March 2017.... The average monthly payment will be slashed by the PBGC to $570. This is a reduction of 56% for a population which is aging and unlikely to be able to engage in full-time employment.... [T]he Local 707 Pension Fund was one of several pension funds that sought relief under [MPRA] to be permitted to have its participants consider a reduction of core benefits. However, its application was rejected by the Department of Treasury." (Jackson Lewis P.C.)

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