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Government plans - state and local - misc

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Kentucky Budget Director Sues State Pension Coalition to Keep Actuarial Analysis Under Wraps
"Kentucky Budget Director John Chilton is suing the state's Public Pension Coalition over the group's request to review an actuarial analysis of the governor's pension reform plan that was announced in October.... Kentucky Attorney General Andy Beshear [had] decided on Feb. 5 that Mr. Chilton had violated the Kentucky Open Records Act and gave the budget director 30 days to release the analysis." (Pensions & Investments)
Michigan Reveals Post-Detroit Pension Woes
"Under a new state law, cities, towns and authorities were required this year to submit financial details on the status of their pension and health care plans. The results, so far, are grim: the Michigan Treasury Department found that over 110 -- or more than one fifth -- have underfunded pension or retiree health-care plans." (Bloomberg)
CalPERS Payouts Approach $21 Billion, Up 43% Over Past 5 Years
"California's largest public pay database released pension payout data for [CalPERS] for the fiscal year ending July 31, 2017 [which] show total pension payouts of $20.63 billion -- a 43 percent increase from the amount reported in 2012.... [T]he dataset reveals 40 agencies or state departments with at least 100 CalPERS recipients drawing pensions of $100,000 or more." (Transparent California)
California Courts Split on Pension Vested Rights Analysis
"[T]he Alameda court ... found that the reasonableness of PEPRA's changes ... must be judged independently in each county so that the effect on pre-PEPRA members could be evaluated in the context of each county's particular CERL system. The Alameda court rejected the MAPE court's broad focus on the general unfunded pension liability crisis in the State as a whole." [Alameda County Deputy Sherriff's Ass'n v. Alameda County Employees' Retirement Ass'n, No. A141913 (Cal. Ct. App. Jan. 8, 2018)] (Hanson Bridgett LLP)
Oregon Legislature Passes Bill to Reduce $74.6 Billion Unfunded Liability of Oregon Public Employees Retirement Fund
"The bill sets up two new funds, a side account for school districts to be invested alongside pension assets to reduce school district's pension contributions, and an incentive fund to match certain lump-sum employer contributions to the pension plan." (Pensions & Investments)
CalPERS Reduces Amortization Period with Impacts to Employer Contribution Rates
"[R]educing an amortization period, as well as eliminating direct rate smoothing for most sources of unfunded liability, can provide faster recovery of funded status following market downturns and decrease expected cumulative contributions, according to a CalPERS Finance and Administration Committee report." (Liebert Cassidy Whitmore)
[Opinion] There Is Finally a Pension Bill in Kentucky, and It's Bad
"The most dramatic change proposed in SB1 is switching future teachers from a defined benefit pension to a cash balance hybrid plan ... similar to the one many other public employees in Kentucky were forced into by legislation passed in 2013 ... This switch would represent a substantial loss of retirement security for Kentucky's teachers." (National Public Pension Coalition)
West Virginia Bill Would Criminalize Failure to Make Public Pension System Contributions
"Under the proposed legislation, any employer or public official who willfully fails to make contributions to public pension plans can face a sentence as low as a $100 fine or as high as 10 years in prison." (PLANSPONSOR)
How Is Liability-Driven Investing Different?
"An LDI approach forces us to examine our investment and funding assumptions on an ongoing basis -- and to make adjustments. Because an LDI approach starts with an identified liability or funding target, compares it with the current value of available assets and challenges us to figure the best way to achieve that goal, it makes us carefully evaluate the assumptions we have made as part of our plan." (Best Best & Krieger LLP)
Kentucky Pension Reform Bill Would Move Future Teachers Into Cash Balance Plan
"[T]eachers hired after Jan. 1, 2019, would be enrolled in a cash balance plan instead of the existing defined benefit plan ... Cash balance plans would be maintained for other current and future employees ... [C]urrent and future non-hazardous employees, excluding teachers, would have the option of participating in a new 401(a) defined contribution plan. Under the 401(a) plan, employers would contribute 4%." (Pensions & Investments)
California Cities' Pension Bills May Rise with CalPERS Move
"[CalPERS] is advancing a staff recommendation that would shorten the amortization period for new pension liabilities from 30 years to 20. That would boost the system's funded ratio, require localities to pay off the debt sooner and allow the pension to recover faster from market downturns... The ramped up schedule ... would make market losses felt more swiftly by local governments and require them to pay more into the retirement fund in at least the first few years." (Bloomberg)
When Do CalPERS Rates Become 'Unsustainable'?
"The ability to absorb rising pension costs varies from city to city ... but one thing unsustainable for all is the erosion of basic services.... [U]ncertainty causes reluctance to fully staff police, fire departments, and public works maintenance. As discretionary services such as libraries, parks and recreation are threatened, long-term commitments are less likely. Though the economy is growing and unemployment is low, cities are forced to make tough budget decisions." (Calpensions)
Retirement Reform Lessons: The Experience of Palm Beach Public Safety Pensions (PDF)
18 pages. "This case study of the Palm Beach experience offers an important cautionary tale on the detrimental impacts of switching public employees from DB pensions to DC accounts.... Dismantling the DB pension benefit caused a mass exodus of public safety officers.... [T]he unprecedented loss of new and experienced public safety officers caused the town's training cost to soar likely reaching upwards of $20 million ... The DC switch proved a failed experiment in Palm Beach." (National Institute on Retirement Security [NIRS])
2017 NCPERS Public Retirement Systems Study (PDF)
39 pages. "The market value of fund assets now exceed the actuarial value of assets for the 2017 respondents ... [A]ll responding funds report the total cost of administering their funds and paying investment managers is 55 basis points.... [F]unds that participated in both 2016 and 2017 show a drop to 52 basis points.... The average investment assumption is 7.5 percent.... [E]mployer contribution rates have risen from 18 percent of fund income in 2016 to 22 percent of fund income." (National Conference on Public Employee Retirement Systems [NCPERS])
The Cost of Healthcare for California Government Workers When They Retire Rises Sharply
"California taxpayers are on the hook for more than $91.5 billion to provide health and dental benefits to state government workers when they retire ... That's a substantial increase from last year's estimate, a result of changes in the way the total debt is calculated and changes in the projected cost of healthcare in the coming decades. Last year's report put the total liability at just under $77 billion." (Los Angeles Times)
CalPERS Raises Pensionable Compensation Caps for 2018
"The compensation limit for classic members for the 2018 calendar year is $275,000; raised from $270,000 in 2017. The compensation limit for new members for the 2018 calendar year is $121,388 for Social Security Participants and $145,666 for Non-Social Security Participants.... Employees with membership dates prior to July 1, 1996, are not impacted by these limits." (Liebert Cassidy Whitmore)
[Opinion] California Government Pension Contributions Required to Double by 2024 -- Best Case
"When assessing the impact of a nearly $30 billion hike in pension contributions between now and 2024, it's important to note that these projected payments do not include contributions collected from state and local government employees via payroll withholding.... Why are the employees only paying 25% of the cost for their benefit? Didn't the PEPRA reform of 2012 put them on track to pay 50% of the cost of their pensions?" (California Policy Center)
[Opinion] The Pension 'Hail Mary' That Should Never Have Happened
"A little over a decade ago, corporate and governmental pensions chose to wildly gamble in secretive, opaque, illiquid, toxic investments that carried excessive and hidden fees and expenses, were impossible to accurately monitor or value, had no prior tracks records of performance and carried very high and unacceptably large risk of losses -- hedge and private equity fund of funds. That's the allegation in an unprecedented lawsuit recently filed on behalf of state taxpayers and the Kentucky Retirement Systems' pension plans, reportedly the worst-funded pension system in the nation." (Edward Siedle, in Forbes)
Illinois Ponders Pension Fund Moonshot: A $107 Billion Bond Sale
"Lawmakers in Illinois are so desperate to shore up the state's massively underfunded retirement system that they're willing to entertain an eye-popping wager: Borrowing $107 billion and letting it ride in the financial markets....[T]he State Universities Annuitants Association... [proposes Illinois] issue the bonds this year to get its retirement system nearly fully funded, assuming that the state can make more on its investments than it will pay in interest." (Bloomberg)
Quarterly Survey of Public Pensions for Q3 2017
"For the 100 largest public-employee pension systems in the country, assets (cash and investments) totaled $3,691.1 billion in the third quarter of 2017, increasing by 2.8 percent from the 2017 second-quarter level of $3,590.7 billion. Compared to the same quarter in 2016, assets for these major public-pension systems increased 9.0 percent from $3,386.4 billion." (U.S. Census Bureau)
Restructuring a Multi-Manager Plan: A Case Study (PDF)
"The revamping process examined the investment fund structure, participant enrollment, and investment management fees.... The exercise provided important lessons in multi-manager fund structures, and ultimately resulted in a greatly improved DC plan.... After this process, the plan saw: [1] An increase in participation of 20 percentage points; [2] A decrease in investment management fees across the board; [3] A simplification of the fund structure and elimination of little-used options in the former plan." (Callan)
California Governor Brown Goes to Court to Finish Pension Reforms
"[K]ey parts of a pension reform Brown pushed through the Legislature six years ago, which extended retirement ages and capped pensions, were limited to new hires who have no vested right to the benefits cut to reduce costs.... [T]he Brown reform provides little immediate relief for struggling pension systems. Significant savings could take decades because key parts only apply to employees hired after the reform took effect on Jan. 1, 2013." (Calpensions)
[Opinion] Garden State Crowd-Out: How New Jersey's Pension Crisis Threatens the State Budget (PDF)
16 pages. "Since 2014, it has become clear that New Jersey needs a new strategy to address its pension problems.... Absent some unexpectedly robust acceleration of the economy, it is highly unlikely that New Jersey will generate enough new revenues to meet its pension commitments without severely hobbling the rest of the state's budget. At the same time, allowing its pension system to continue to accumulate debt by not contributing adequately to it will push New Jersey toward a potentially catastrophic failure of its government pensions." (Manhattan Institute for Policy Research)
New Tax Law Means Fighting Over Underfunded State Pension Plans Is About to Get Worse
"Unless states can implement effective ways to circumvent the SALT restriction, they will face much higher political barriers to meeting their unfunded benefit obligations through increased tax revenues. Instead, states will be forced to severely cut spending on public services and/or adopt major reforms of their benefit plans.... [A table] summarizes the situation for each of four states with the highest unfunded liabilities relative to their revenues in 2016 -- Illinois, New Jersey, Connecticut and Kentucky." (MarketWatch)
Conflicting Decisions in California as to 'Vested Rights' of Public Employees: Where Will the State Supreme Court Land?
"A California Court of Appeal recently issued a decision with implications that can affect all public employers in California and in contrast to a decision by another Court of Appeal just over a year ago.... [The judge] found that applying detrimental changes to the pension benefits of Legacy Members is only justified by compelling evidence that the required changes manifest a material relation to the successful operation of the pension system.... [We] now have two divergent decisions on the fundamental notion of a vested right to immutable pension benefits in the aftermath of PEPRA." [Alameda County Deputy Sherriff's Ass'n v. Alameda County Employees' Retirement Ass'n, No. A141913 (Cal. Ct. App. Jan. 8, 2018)] (Liebert Cassidy Whitmore)
Baltimore Fire and Police Pension Changes Ruled Unlawful
"Reforms implemented in 2010 ... increased employees' contributions and replaced a variable benefit tied to investment returns with a tiered cost-of-living increase. Instead of annual increases that averaged 3% under the variable benefit, the 2010 pension reforms created a tiered COLA that gave older retirees 2% increases, while retirees under 55 did not receive an increase. In the latest ruling, issued Jan. 2, [Baltimore Circuit Judge Julie Rubin] said the variable benefit change was a breach of contract." [Cherry v. Mayor and City Council of Baltimore City, No. 24-C-16-004670 (Cir. Ct. Balt. Jan. 2, 2018)] (Pensions & Investments)
High Hurdle for Pension Cuts in New California Court Ruling
"[A California appeals court] ruled that the pensions of current employees can be cut without providing an offsetting new benefit, but only if there is 'compelling evidence' that a reduction is needed for the successful operation of the retirement system. The new ruling in three consolidated county cases is a much higher hurdle than an appellate ruling in a well-publicized Marin County case two years ago that said pensions can be cut if the employee is not deprived of a 'reasonable' pension." [Alameda County Deputy Sherriff's Ass'n v. Alameda County Employees' Retirement Ass'n, No. A141913 (Cal. Ct. App. Jan. 8, 2018)] (Calpensions)
New Jersey Governor Signs Bill Requiring Stress Tests, Fee Transparency at State Pension Funds
"The legislation will affect five of the seven pension systems in the $77.5 billion New Jersey Pension Fund ... The stress-test goal is to 'assess how well the investments of each of the state-administered retirement systems are likely to perform in periods when market returns are significantly above or below baseline assumed returns'[.]" (Pensions & Investments)
The Funded Status of Local Pensions Inches Closer to States (PDF)
14 pages. "[As] of 2015, local plans have an aggregate funded ratio of 69.9%, relative to 73.9% for state plans -- a difference that has been closing in recent years. Also, these local plans contributed 83% of their required contributions in 2015, relative to 76% for state plans ... [T]hese variances between state and local plans are possibly linked to differences in aggregate investment approaches and funding methods, respectively." (Center for State & Local Government Excellence)
KKR, Blackstone Sued Over Fund Sales to Kentucky Retirement System Pension Plan
"The plaintiffs, including a retired state trooper and a firefighter, allege that the big asset managers misrepresented expensive and risky 'black-box' bundles of hedge funds as safe ways to generate high returns. Instead, those investments contributed to the pension system's virtual insolvency, the plaintiffs said, while the managers pocketed excessive fees." (Pensions & Investments)
[Guidance Overview] Tax Reform Legislation Addresses UBIT and Segregation of UBTI Investments
"Adopting the Senate's approach, tax reform legislation will not require governmental pension plans to be subject to unrelated business income tax, and tax-exempt entities subject to tax on unrelated business taxable income will need to segregate taxable income and loss for each unrelated trade or business activity." (Morgan Lewis)
Push Grows to Use Pension Funds to Address Climate Change
"New York Gov. Andrew Cuomo last week proposed a 'roadmap' for divesting the $200 billion New York state pension fund from fossil fuel investments, joining a move to use shareholder clout to reduce greenhouse gas-emissions believed to cause climate change.... CalPERS was a key organizer of a coalition of 225 large investors with $26 trillion in assets launched this month to use 'engagement' or persuasion, rather than divestment, to urge corporations to reduce greenhouse-gas emissions." (Calpensions)
Sometimes It's Good to 'Be a Little Bit Country' -- The Benefits of Rural Cooperative Status
"One of the lesser-known (and used) provisions of the Code allows a state or local government or instrumentality that is a 'rural cooperative' to set up and maintain a governmental 401(k) plan in addition to a 457(b) plan. Some of the more common types of rural cooperatives are: Governmental entities providing electrical services on a mutual, cooperative or public utility basis; Municipal irrigation, water conservation or drainage districts; and Mutual irrigation or ditch companies that are governmental." (Best Best & Krieger LLP)
[Guidance Overview] CalPERS Board Adopts New Regs on Compensation Counted in Pension Formula
"There are items of compensation earnable for Classic Members that are not considered Pensionable Compensation for New Members.... Uniform pay for New Members ... is not pensionable compensation in any amount.... Employer-Paid Member Contributions (EPMC) is not pensionable compensation for New Members ... [B]onuses are not pensionable for New Members.... '[T]emporary upgrade pay' is not pensionable compensation for New Members ... [O]vertime hours that are built into the normal work schedule of the employee will only be pensionable for New Members who are in the local fire or local police membership classifications if it is pursuant to an FLSA 7(k) work schedule." (Liebert Cassidy Whitmore)
Puerto Rico Ordered to Make Interest Payments on Pension Bonds
"Puerto Rico must keep paying pension bondholders while the judge overseeing the island's bankruptcy case decides whether the investors also have a right to retirement contributions made to government workers. Puerto Rico, which has about $3 billion of pension bonds outstanding, owes about $13.9 million each month in interest to holders of the debt." (Bloomberg)
Appeals Court May Allow California Governmental Employers to Decrease Rate of Future Benefit Accruals
"The so-called pension spiking was outlawed ... in 2013 ... Employees of the three counties filed suit to compel their retirement systems to continue to allow the unused time to be part of the final pension calculation." (Pensions & Investments)
Report Says CalPERS Investments Too Focused on Environmental and Social Activism
"The American Council for Capital Formation (ACCF) said CalPERS board members have overemphasized what are called Environmental, Social and Governance (ESG) investments -- and the sluggish returns on those investments are dragging down the pension fund's bottom line.... The report also questioned the pension board's plans to increase climate-related shareholder proposals from 12 to 17. The report also takes aim at individual board members." (The San Diego Union-Tribune)
[Opinion] Slanted 'Study' on the Role of ESG Falls Completely Apart
"The [The American Council for Capital Formation (ACCF)] report argues that our efforts to engage with companies on policies that can impact their bottom line have harmed returns. The report is dead wrong.... [T]his report cherry picks a thin set of loosely-related facts to subliminally promote an anti-pension ideology." (CalPERS)
NASRA Issue Brief: State Hybrid Retirement Plans (PDF)
"[A] growing number of states have established [hybrid plans] on either an optional or mandatory basis.... [M]ost contain the core features known to promote retirement security: mandatory participation, shared financing between employers and employees, pooled assets invested by professionals, targeted income replacement with survivor and disability protection, and a benefit that cannot be outlived." [Updated Dec. 2017] (National Association of State Retirement Administrators [NASRA])
2018 California PEPRA Compensation Limits
"The 2018 [California Public Employees' Pension Reform Act of 2013 (PEPRA)] compensation limits are $121,388 for Social Security members and $145,666 for non-Social Security members. These limits are the maximum pay that a California public agency can recognize in a defined benefit plan for PEPRA members, i.e. those first hired by a public employer in 2013 or later." (Van Iwaarden Associates)
[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)

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