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Benefits in the News > By Subject >

Government plans - state and local - misc


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When Will California Supreme Court Rule on Constitutionality of Reductions or Freezes in Future Pension Accruals?
"An early Supreme Court decision upholding the appellate rulings might allow time for reformers to consider putting an initiative on the state ballot next year. A favorable ruling also might prompt local action or labor bargaining to curb budget-squeezing pension costs. The four county suits and the state firefighters suit all challenge minor parts of Gov. Brown's pension reform that apply to employees hired before the reform took effect on Jan. 1, 2013." (Calpensions)
[Opinion] Will Public Pensions Sink Illinois?
"[W]hat Illinois and other states that suffer from similar pension woes need is to amalgamate all these public pensions at the state level, introduce better governance, adopt a shared-risk model, and get real on investment returns even if this means higher contributions from employees and the state government (these plans need be jointly sponsored). But none of these reforms are being discussed. Instead, lawmakers want quick fixes which will make things worse for everyone, including Illinois taxpayers." (Pension Pulse)
69 Percent Funding Ratio Reported for State-Sponsored DB Systems (PDF)
"The funding ratio of state pension plans dropped four percentage points to 69 percent in fiscal year 2016 ... [For] the 103 state retirement systems that reported actuarial data for 2016, pension assets shrank by 1.8 percent ... in 2016 while liabilities grew 5.4 percent ... [A]ggregate shortfall, or net pension liability, [increased] $222.4 billion over fiscal 2016 from $963.2 billion to $1,185.6 billion." (Wilshire Associates)
Public Fund Trustees Facing Host of Difficult Challenges
"Every public pension system and trustee is unique, and only the pension system itself can determine what governance approach works best for it ... However, common questions must be asked ... [G]ood governance is a four-legged stool ... The first leg is setting the direction of the organization, followed by directing staff and prudently delegating, overseeing what has been delegated, and correcting course when needed." (Pensions & Investments)
[Opinion] Public Pensions: Why It's Important to Keep Watching
"It takes a long time for these problems to come to fruition. Much longer than it takes a company to run into trouble ... Part of the reason is the 'taxpayer put' ... there's a limit to how much governments can soak taxpayers, but they can increase the taxes over time until more and more people leave ... Another part of the reason is the 'bondholder put', which is exercised less frequently, and does a lot more damage when it's exercised by politicians. The biggest part of the reason is no oversight." (STUMP)
Getting Back On Track: Financial Wellness in the Public Sector
"Between 2009 and 2013, to improve their pension positions, virtually every state applied some combination of lower benefit accruals and higher employer contributions made possible with the federal government's help. Higher employee contributions became commonplace, too.... Now public employers are searching for opportunities to provide workers with services that may compensate for benefit changes and better prepare them for financial security in retirement." (Prudential)
The $4 Trillion Pension Problem
"Earlier this month, the $20.2 billion Los Angeles Fire and Police Pension System lowered its assumed rate of return by a quarter of a percentage point to 7.25 percent. This seems like a fairly minor and obvious move.... But the fund's relatively minor adjustment will probably cost taxpayers $27 million in additional contributions to help make up the shortfall in fiscal year 2018 alone." (Bloomberg)
CalPERS Moves to Adopt 2018 Health Plan Premiums
"The California Public Employees' Retirement System Board of Administration today approved health care rate and plan changes for 2018 that include an average 2.33 percent overall premium increase. Individual plan increases may vary, but the overall Medicare and Basic (non-Medicare) increase is the lowest in 20 years." (CalPERS)
U.S. Public Pension Plan Contribution Indices, 2006-2014 (PDF)
"In every year studied, most of the 160 plans with enough data to complete analysis for the year received insufficient employer contributions to maintain their unfunded liabilities ... For 2014, 3% of plans showed a funding surplus and 20% of plans received enough employer contributions to fund their shortfall within 30 years without it growing through negative amortization in the meantime. Employer contributions for the same 130 plans increased 76%, from about $48 billion in 2006 to roughly $85 billion in 2014. Employee contributions increased 30% during this period, from $28 billion to $37 billion, while payroll and prices both increased 17%." (Society of Actuaries)
State and Local Government Contributions to Statewide Pension Plans, FY 2015 (PDF)
"The median actuarially determined contribution [ADC] received in FY 15 was 100 percent, and ranged from 12 percent to 528 percent.... On a dollar-weighted basis, the average ADC received was 91 percent, up from 87 percent in FY '14 and marking the highest aggregate annual contribution effort since FY '02.... The aggregate rate of increase in required contributions from FY '14 to FY '15 was 4.5 percent, which is the lowest rate of increase during the measurement period." (National Association of State Retirement Administrators [NASRA])
Pension Crisis Won't Be Reversed by High Returns, Moody's Says
"A 'best case' scenario of a cumulative 25% investment return during the 2017-2019 period will not offer a respite for chronically underfunded U.S. public pension plans ... The growing gap between how much state and local governments are projected to pay employees and how much funds they actually have set aside has risen to over $4 trillion nationwide. New Jersey sports the widest funding gap, followed closely by Kentucky and Illinois." (Bloomberg)
How New York City's Pension Costs Threaten Its Future (PDF)
12 pages. "Today, pension contributions stand at a near-record 11% of the city's total budget -- and 36% of payroll alone. They consume 17% of city tax revenues, double the average proportion of the 1990s and early 2000s.... New York's annual pension contributions will soon displace social services as the second-largest spending category in the city budget, behind only education, consuming more than 80 cents of every dollar raised by the city's personal income tax." (Manhattan Institute for Policy Research)
Most State Pension Plans Paper Over Unfunded Liabilities
"State officials can adopt open-ended amortization to reduce the amount the state must contribute to the pension system each year or to improve the appearance, but not the reality, of the state's current funding effort. Regardless of the reason, open-ended amortization exacerbates funding shortfalls, compounding the risk that the state will have insufficient funds to pay its pension obligations to retired state employees." (Phys.org)
California's Bold DB-to-DC Pension Reform: Five Years In
"San Diegans voted five years ago this month to switch all new city hires, except police, from pensions to 401(k)-style individual investment plans, becoming one of the first big cities to take the plunge.... A union official said offering new hires a 401(k)-style plan rather than a pension is having an impact on recruitment, particularly for middle and upper management and skilled positions such as engineering and surveying. Michael Zucchet, San Diego Municipal Employees Association general manager, said the switch reduces services by contributing to an overall vacancy rate in city positions of about 10 percent, rising to 15 to 20 percent in some positions." (Calpensions)
[Opinion] Pennsylvania Pension Reform, Part 1
"For a system that will likely run out of money by 2034 the thrust of this 'reform' is to reduce those onerous employer contributions while keeping employee contributions at similar, if not higher, levels in part by confusing those new participants impacted." (Burypensions)
[Opinion] The Disturbing Trend That Will End in a Full-Fledged Pension Crisis
"Though the challenges are well known by now, many believe that public-sector pension funds will be maintained and the gaps filled by strong investment returns, increasing employee contributions, raising taxes, or some combination of the three. They hope with these measures and ongoing strong asset returns, liabilities can be reduced and pensions salvaged. Unfortunately, this is wishful thinking at best." (Olivier Garret, via Forbes)
[Discussion] Spousal Benefits Required Under a FICA Replacement Plan?
"Client is a local government entity that has a FICA replacement plan, so employees who participate in the plan don't pay into Social Security OASDI or receive those benefits. The requirements for replacement plans are framed in terms of what an employee must receive. Is there any requirement that a replacement plan provide spousal benefits?" (BenefitsLink Message Boards)
TE/GE Advisory Committee Recommendations for FICA Replacement Plan Requirements (PDF)
68 pages. "Currently the revenue procedure used for evaluating defined benefit plans ... includes only limited safe harbor alternatives referencing more traditional benefit formulas. The standard for defined contribution plans is based on a 7.5 percent employee and employer combined contribution rate of 'compensation.' ... [T]he guidance has not been updated to reflect the emerging trend to use hybrid plans, including cash balance plans, and combinations of defined benefit and defined contribution plans." (Advisory Committee on Tax Exempt and Government Entities [ACT], Internal Revenue Service [IRS])
[Opinion] Presidential Pensions as Broken Windows
"Why should federal taxpayers pay a post-presidential pension to a former President who is willing and able to enrich himself after he leaves the White House? ... [T]he presidential pension presents the classic case of a 'broken window,' the relatively small incident which suggests deeper disarray. The same 'broken windows' effect occurs when former state legislators manipulate state pension laws, taking short-term but highly paid state executive positions to boost their retirement pensions." (Prof. Edward A. Zelinsky, OUPblog)
Texas Governor Signs Houston Pension Reform Bill; Firefighters Fund Sues City
"A pension reform bill for Houston's three pension funds was signed into law by Texas Gov. Greg Abbott on [May 31], a day after the Houston Firefighters' Relief and Retirement Fund filed a lawsuit challenging the constitutionally of the bill's provisions. The pension reform package, proposed by the city of Houston and passed the Texas Legislature on May 24, includes benefit reductions for participants in the $3.9 billion Houston Police Officers' Pension System, $3.8 billion firefighters' fund and $2.3 billion Houston Municipal Employees Pension System that would help reduce the plans' $8.2 billion in total unfunded liabilities." (Pensions & Investments)
[Official Guidance] Text of IRS PLR 201722014: Severance and Special Retirement Benefit Offered by State in Connection with Hospital Closure Creates Cash or Deferred Arrangement (PDF)
"Statute provides that employees of the State's public hospitals whose positions are being abolished or who are directly affected by a reduction-in-force or workforce restructuring plan ... could... elect one of the following: ... [1] a one-time lump-sum cash payment ... or ... [2] a subsidized early retirement benefit under the Plan ... [If] Statute becomes effective, the election granted to the State employees under Statute with respect to the benefit they receive upon separation from service would constitute a cash or deferred election[.]" (Internal Revenue Service [IRS])
Why Hire a '3(38)' Adviser for a Public Agency 457(b) or 401(a) Plan?
"In California, many public agencies' retirement plan committees are unaware that unless they fulfill certain ERISA-like requirements with respect to their participant-directed 457(b) and 401(a) plans, they can be held personally liable for investment losses suffered by plan participants.... [W]hat can they do to protect themselves? More importantly, what can they do to improve the overall investment process within their plan?" (Chang Ruthenberg & Long PC)
State Pension Depletion Dates: Kansas Stands Alone
"Of the 50 systems there is only one (Kansas) with positive cash flow. Of the others all are projected to go bust." (Burypensions)
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)
[Opinion] The Big Squeeze: Big Bucks Paid to Alternative Investment Managers While Pension Deficits Get Worse
"[A] select few hedge fund and private equity titans have greatly benefitted from this shift into alternative assets, amassing extraordinary wealth, while U.S. public pension funds keep sinking deeper into a pension albatross, failing to deliver on these and other investments. Still, despite this reality, US pensions are rushing to invest more into alternatives, fearing a big downturn ahead.... The problem isn't paying fees when risk-adjusted performance is met. The problem is paying big fees for subpar or average returns in a low-return environment over a long period as your pension deficit gets worse." (Pension Pulse)
How NC Public School Teachers Choose to Participate When 401(k), 403(b), and 457 Plans Are Offered Simultaneously
"This study examines the decisions [North Carolina public school] employees make and the implications for retirement saving in a multiplan environment. Key Insights: [1] A third of North Carolina public school employees contribute to a retirement plan. [2] Only a tenth of plan participants contribute to two or more plans. [3] Highly compensated employees show no tendency to use secondary plans to exceed annual contribution limits." (TIAA 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])
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)
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)
Retiree Health Care Benefits for State Employees in Fiscal Year 2015 (PDF)
"In 2015, approximately 80 percent of state government units offered health insurance to retirees under age 65 and approximately 70 percent offered the benefit to those over age 65.... This report focuses on OPEB finances for states and state agencies, and all relevant data are sourced from state and statewide retirement system financial reports. A list of the agencies responsible for administering retiree healthcare plans reflected in this report is [included]." (National Association of State Retirement Administrators [NASRA])
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)
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)
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)
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)
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)
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)
75% of State and Local Government Workers Were in DB Plans in 2016
"In March 2016, 75 percent of state and local government workers participated in defined benefit pension plans. Of these workers, 57 percent participated in frozen defined benefit plans, or plans that are not open to new employees. For 98 percent of workers who participated in defined benefit pension plans, employee benefits are based on a percentage of their earnings during a specified number of years, usually at the end of their careers. The other 2 percent of workers participated in cash balance plans, where employees are credited with a specified contribution and a rate of interest on the contribution; the benefits are provided as a lump sum and may be converted to an annuity." (U.S. Bureau of Labor Statistics [BLS])
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)
Texas Senate Passes Bill Overhauling Houston's Troubled Pension Systems
"[The legislation provides that,] if the police or fire systems have less than 65 percent of the money they will need to cover future retirement costs after 2021, new employees will have to ... [enter] a cash balance plan.... Currently, the city's police system is funded at 62 percent, the firefighter fund at 81 percent and the municipal fund at 48 percent[.]" (The Texas Tribune)
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)
Why Pensions Matter: The History of Defined Benefit Pension Plans in the U.S. (PDF)
10 pages. "Pensions, in the broadest sense of the term, have existed since ancient Rome.... Governments began offering pensions because they are the most effective and cost-efficient way for working families to prepare for retirement.... This report will explore the history of defined benefit public pensions in the United States, why they were implemented in the first place, and why they continue to remain today." (National Public Pension Coalition)
[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)
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)
Public Pension Reporting and Disclosure: The Current State of Practice, and Examples of What Works Well
"[1] A majority of systems follow GFOA reporting standards in producing their Comprehensive Annual Financial Reports, with nearly half of the sample also developing a plain language annual financial report; [2] Virtually all of the systems develop an actuarial valuation (annually), an experience study (at an average of every five years), and have a funding policy produced by the system and/or established in state statute; [3] Active engagement with key stakeholders is a hallmark of systems with robust communications and reporting initiatives; [4] Leveraging social media and/or establishing advisory committees has helped systems garner detailed feedback from their stakeholders." (Center for State & Local Government Excellence)
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)
[Opinion] Are State Pension Systems Failing to Deliver?
"[T]here should be a detailed breakdown of fees paid to brokers, advisors, lawyers, and pretty much all service providers at any public pension plan.... All public pensions should report all their returns net of all fees and costs because that represents the true cost of managing these assets.... [M]ost US state pensions ... [are] clinging on to their pension rate-of-return fantasy which will never materialize. They do this to keep contributions low to make their members and state governments happy but sooner or later, the chicken will come home to roost[.]" (Pension Pulse)
[Opinion] Laws of Unintended Consequences: Pension Reform Gone Awry (PDF)
"The Public Employees' Pension Reform Act (PEPRA), effective January 1, 2013, was passed to rein in [California] pension costs that were viewed as unsustainable.... Similar to how the Legislature took a blunderbuss rather than a surgical approach to pension reform in PEPRA, some courts have launched comprehensive, rather than targeted, attacks on the 'vested rights' doctrine. In recent months, their rulings have started to gain momentum." (Jeffrey R. Rieger, of Reed Smith LLP)
Puerto Rico Pension Participants Sue to Stop Cuts
"Public sector employees and retirees in Puerto Rico filed suit [on April 12] to prevent the governor and oversight board from implementing a fiscal plan that calls for 10% reductions in benefits paid by the Puerto Rico Government Employees' Retirement System, Hato Rey, beginning in 2020." (Pensions & Investments)
Looking for a Retirement Lifeline in Puerto Rico
"Out of every three workers ages 35 to 64 in Puerto Rico, one is saving for retirement and two are not. One in five (19%) workers in this age group is contributing to a retirement savings plan. Forty-four percent (44%) of workers have no access to a retirement plan through their employer. Defined benefit plans are offered to thirty-six percent (36%) of workers surveyed and a similar share (38%) has access to a defined contribution plan. Nineteen percent (19%) have access to both types." (AARP)
[Opinion] Watching the Money Run Out: Applying a Simulation to a Chicago Pension Fund
"The reason the pension assets run out is because the starting assets are insufficient, and the contributions are really insufficient. This is why [the author's model considers] at what the increase in contributions would have to be to cover the outgoing cash flows. In this case, the increase is over 300%. So if you think the current contributions are too high, how are 4x the contributions going to be affordable? If you think pre-funding the pensions is expensive, wait until you have to do pay-as-you-go. It's really expensive." (STUMP)
State and Local Government Spending on Public Employee Retirement Systems (PDF)
"On a nationwide basis, contributions made by state and local governments to pension trust funds account for 4.5 percent of direct general spending.... This update provides figures for public pension contributions as a percentage of state and local government direct general spending for FY 2014, and projects a rate of spending on pensions on an aggregate basis for FY 2015." (National Association of State Retirement Administrators [NASRA])
Appeals Court Unanimously Vindicates San Diego's 2012 Pension Revisions
"California's Fourth District Court of Appeal unanimously overturned a 2015 state labor board ruling that said the cutbacks were illegal ... The initiative, Proposition B on the June 2012 ballot, replaced guaranteed pensions with 401(k)-style retirement plans for all newly-hired city employees except police officers." (The San Diego Union-Tribune)
Evaluating Pension Reform Options with the Public Pension Simulator
"[The authors] used the Urban Institute's new Public Pension Simulator to estimate how potential reforms to Pennsylvania's teacher pension plan might affect employer costs and teacher benefits. [The] report looks at various reform options, including eliminating early retirement benefits, raising the normal retirement age, changing the benefit formula, and eliminating cost-of-living adjustments (COLAs) provided to retirees. The results show that eliminating the early retirement option would significantly reduce costs while safeguarding pensions received by teachers with shorter careers." (Urban Institute)
Public Pensions Matter -- Just Ask Michigan and West Virginia
"In the 1990s, both West Virginia and Michigan closed public pension plans. West Virginia was first, closing its teacher pension plan in 1991.... In 1997, Michigan closed its traditional pension plan for state government employees. What happened next is a warning to other states or cities considering a similar course." (The Hill)

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