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<< Older News  |  September 25, 2020

News

All News > State and Local Government Plans

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Employee Benefits in the United States, March 2020
U.S. Bureau of Labor Statistics [BLS] Link to more items from this source
Sept. 24, 2020

"Private industry workers: ... Medical care was available to 27 percent of workers in the lowest 10th percent wage category and 94 percent of workers in the highest 10th percent wage category had access to this benefit. Sixty-seven percent of workers in an establishment with less than 100 employees had access to paid sick leave and 88 percent of workers at establishments with 500 or more employees had access to paid sick leave.... State and local government workers: Seventy-six percent of workers participated in defined benefit plans.... Eighteen percent of workers participated in defined contribution plans and employee contributions were required for 69 percent of these workers.... Medical care and retirement benefits were not available to 1 percent of primary, secondary, and special education school teachers and 99 percent of these workers had access to both benefits."

Tags: Health Plan Design  •  Retirement Plan Design  •  State and Local Government Plans

Editor's Pick Ten Ways to Close Public Pension Funding Gaps (PDF)
National Conference on Public Employee Retirement Systems [NCPERS] Link to more items from this source
Sept. 14, 2020

34 pages. "Solutions can have more staying power and impact if they address underlying, structural fiscal issues and tackle imprudent approaches to allocate state and local government revenues, including pension contributions. This paper describes alternative approaches that public pension systems and their government relations teams should consider, understand, and bring up in discussions, debates, and negotiations."

Tags: Funding of DB Plans  •  State and Local Government Plans

Public Pensions Analysis: High-Level Changes in Unfunded Liabilities as a Percentage of State GDP
STUMP Link to more items from this source
Sept. 10, 2020

"Pension unfunded liabilities are usually quoted without reference to the size of the economy supporting those promises. The ratio of the UAL to the state GDP can give a good relative feel for how indebted each state is for their pensions."

Tags: Funding of DB Plans  •  State and Local Government Plans

Considerations When Starting or Enhancing the Purchase of Service Credits in a Public Sector Pension Plan
Bolton Link to more items from this source
Sept. 8, 2020

"This paper provides considerations for plans that are setting up new rules or reviewing existing rules for an Additional Service Credit Program (ASCP). The design of an ASCP can take many forms and will be driven by a combination of public policy, local and state laws, and employee relations.... A careful analysis of the different sources of plan cost, risk, and liability should be undertaken to understand fully how service purchases can impact the plan finances on a long-term basis."

Tags: Retirement Plan Administration  •  State and Local Government Plans

Only 1 in 5 of the 143 Largest Public Pensions Is Strong
InsuranceNewsNet.com Link to more items from this source
Aug. 20, 2020

"Only one in five of the 143 largest statewide public retirement systems in the U.S. are resilient, [according to] a new analysis ... Public sector funding peaked in 2001, with nearly 3 out of 4 statewide plans 90 percent funded or better. By 2020, one in five statewide plans have a 'resilient funded' status."

Tags: Funding of DB Plans  •  State and Local Government Plans

The Hard-to-Find 'Pre-ERISA Vesting Rules' for Church and Governmental Plans
Business of Benefits Link to more items from this source
[Guidance Overview]
Aug. 18, 2020

"With few notable exceptions, the statutory and regulatory references we need in the administration of plans are at our fingertips from a number of easily accessible internet resources, a great deal of them actually available for free.... One of the most annoying of those 'notable exceptions' is found under Code Section 411(e)(6) of the Code, the vesting standards which apply to governmental and church 401(a) plans."

Tags: Church-Sponsored Plans  •  State and Local Government Plans

Private Equity Was the 'Largest Detractor' for Texas Employees' Retirement System
Institutional Investor Link to more items from this source
Aug. 18, 2020

"Before the pandemic, the Employees' Retirement System of Texas's private equity portfolio was performing well, delivering 7.6 percent in net internal rate of return last year. Then things changed. The $4.4 billion private equity portfolio has lost 2.14 percent ... for the 10 months ending June 30 ... Private equity was the 'largest detractor' from the most recent quarter's performance, losing 1.9 percent."

Tags: Funding of DB Plans  •  Retirement Plan Investments  •  State and Local Government Plans

An Analysis of Connecticut's Public Employee Retirement Plans
Andrew G. Biggs and Tracy Miller, via SSRN Link to more items from this source
Aug. 17, 2020

"The state of Connecticut runs six defined benefit pension funds for its employees, which in the aggregate are among the most poorly funded retirement plans in the country and place increasing fiscal burdens on the state budget. [The authors] use a computer model to simulate the finances of these plans, demonstrating how sensitive the plans' funded ratios and unfunded liabilities are to changes in assumed future investment returns."

Tags: Funding of DB Plans  •  State and Local Government Plans

DOL Is Protecting Public Pensions from Political Investments
Institute for Pension Fund Integrity [IPFI] Link to more items from this source
[Opinion]
Aug. 17, 2020

"There are many laudable initiatives that individuals, religious endowments, schools, and other private entities may wish to consider. However, it is never correct to impose personal political motives on pension funds. This principle is even more prevalent given the massive financial ramifications that the economic fallout of the COVID-19 pandemic has had on pensions."

Tags: Retirement Plan Investments  •  Retirement Plan Investments - ESG  •  State and Local Government Plans

Paying Off Unfunded Pension Liabilities Will Be a Low Priority After COVID-19
Alicia H. Munnell, via MarketWatch Link to more items from this source
[Opinion]
Aug. 14, 2020

"In the next couple of years, states -- which must balance their budgets every year -- will face the tradeoff of deep cuts in education and health care and further layoffs, on the one hand, and funding their pensions on the other. Most observers would probably agree that pension funding could be postponed. More fundamentally, the standard recommendation that sponsors need to eliminate all their unfunded liability over 30 years is increasingly being called into question."

Tags: Coronavirus (COVID-19)  •  Funding of DB Plans  •  State and Local Government Plans

Pension Funds Want Into Private Equity
InvestorPlace Link to more items from this source
Aug. 10, 2020

"Government pension funds have found a new way to profit in private equity.... So says private equity. The American Investment Council is out with a study ... [which] lists 10 large, mostly state-sponsored pension plans it says have gotten returns averaging 16% from investing in private equity deals. The Michigan retirement system, it says, got returns of 15.4%. The one in Illinois got returns of 16.7%. Compare that with government bonds that now yield less than 1% and it's easy to see the attraction."

Tags: Retirement Plan Investments  •  State and Local Government Plans

California Supreme Court Curtails Pension Abuse by Law Enforcement Officers, Others
Independent Institute Link to more items from this source
[Opinion]
Aug. 10, 2020

"In a unanimous ruling on July 30, 2020, the California Supreme Court upheld PEPRA reforms that closed loopholes used by county workers to spike pensions. The decision is limited, however, to employees of 20 California counties that operate their own independent pension systems under the parameters of the County Employees' Retirement Law of 1937. But the '1937 Act counties,' as they are called, are some of California's most populous counties ... Unfortunately, the court did not make sweeping changes to the 'California Rule[.]' "

Tags: Retirement Plan Design  •  State and Local Government Plans

Oregon Public Pension Benefit Reductions Upheld by State Supreme Court
U.S. News & World Report Link to more items from this source
Aug. 7, 2020

"[N]ine public employees filed suit last August seeking to overturn two benefit reductions the Legislature made ... Their lawyers argued that the changes constituted an impairment of contract under the state and federal constitutions, a 'taking without just compensation' and a breach of public employees' PERS contract rights. In a unanimous decision, the court rejected those arguments, sticking with the principle it established in its 2015 decision on the last round of legal wrangling over PERS: the Legislature is entitled to change employee retirement benefits prospectively, for future service, but benefits earned on service already rendered are sacrosanct." [James v. State of Oregon, No. SC S066933 (Ore. Aug. 6, 2020)]

Tags: Retirement Plan Design  •  State and Local Government Plans

CalPERS Chief Investment Officer Resigns
The Sacramento Bee Link to more items from this source
Aug. 7, 2020

"Questions regarding conflict-of-interest disclosures preceded the abrupt resignation of CalPERS Chief Investment Officer Yu Ben Meng on Wednesday, according to the pension fund's board members. The California Public Employees' Retirement System announced Meng's immediate resignation in a late-night email after he had been on the job for less than two years."

Tags: State and Local Government Plans

Executive Director of Massive Illinois Teachers Pension Fund Resigns After Investigation Into 'Performance Issues'
Chicago Tribune; subscription may be required Link to more items from this source
Aug. 7, 2020

"The Teachers' Retirement System board voted unanimously last Friday to place Richard Ingram on administrative leave 'due to performance issues covered by his employment contract' ... Ingram then resigned on Monday. He had been executive director of TRS, the state's largest government retirement fund, for nearly a decade ... The Teachers' Retirement System represents more than 400,000 active and retired teachers in suburban and downstate districts[.]"

Tags: State and Local Government Plans

New Kentucky Lawsuit Takes Aim at Risk in Public Pension Investments
Institute for Pension Fund Integrity [IPFI] Link to more items from this source
Aug. 5, 2020

"The state of Kentucky revived and expanded a lawsuit that claims former officials of the state pension system and hedge fund firms violated their fiduciary duty by choosing risky investments. The state is demanding compensation from hedge funds for their excessive fees and underperformance. Kentucky's pension system remains one of the worst-funded in the nation, hovering around a 32.8% funding level." [Mayberry v. KKR & Co., L.P., No. 17-CI-01348 (Franklin Cir., Commonwealth of Ky. intervening complaint filed Jul. 20, 2020)]

Tags: Retirement Plan Investments  •  State and Local Government Plans

Beleaguered Public Pension Funds Make Record Gains in Second Quarter
The Wall Street Journal; subscription may be required Link to more items from this source
Aug. 4, 2020

"Public pension funds set a 22-year performance record in the second quarter, recovering some but not all of their losses from the first quarter. Double-digit stock gains pushed pension returns to a median 11.1% for the second quarter ... Even with the rebound, median annual returns for the public pensions whose fiscal years ended June 30 were 3.2%, far short of the funds' long-term investment-return target of around 7%."

Tags: Funding of DB Plans  •  State and Local Government Plans

Editor's Pick States Pull Back on Pension Payments as Virus Ravages Revenue
Advisor Perspectives Link to more items from this source
Aug. 4, 2020

"Colorado eliminated a $225 million supplemental payment to the state's Public Employees' Retirement System, backing away from a 2018 plan to bolster the pension, which is about 60% funded after suffering from years of inadequate government contributions. South Carolina suspended a statutorily scheduled 1% employer contribution increase for the fiscal year beginning July 1. And New Jersey, which has one of the nation's worst-funded pensions, has deferred a $950 million pension payment until September and Governor Phil Murphy's plan to increase contributions 13% to $4.6 billion is in question."

Tags: Coronavirus (COVID-19)  •  Funding of DB Plans  •  State and Local Government Plans

California Supreme Court Upholds Pension Reform Changes as Constitutional
Hanson Bridgett LLP Link to more items from this source
Aug. 3, 2020

"The California Supreme Court clarified the so-called California Rule on public employee's 'vested rights' to pension benefits, holding that detrimental financial changes to employee pension benefits does not invariably require that offsetting comparable new advantages be provided. And it set a legal framework for analyzing that issue.... The Court left open possibilities for future pension changes necessary to address substantiated threats to the viability of a pension system." [Alameda County Deputy Sheriff's Ass'n v. Alameda County Employees' Retirement Ass'n., No. S247095 (Cal. Jul. 30, 2020)]

Tags: State and Local Government Plans

California Supreme Court Leaves the California Rule Largely Intact in Opinion Concerning Public Employee Pension Rights
Liebert Cassidy Whitmore Link to more items from this source
July 31, 2020

"The Court's ruling largely leaves the traditional California Rule and analysis intact with one deviation.... [T]he Court determined that where pension benefits are protected by the contract clause of the California Constitution, any modification of a constitutionally protected pension benefit must be reasonable in that it 'must bear some material relation to the theory of a pension system and its successful operation.' Whereas traditionally, such a modification must be accompanied by other benefits, the Court found that where, as here, providing alternative benefits would be inconsistent with the purpose of the constitutionally proper modification, alternative benefits would not be required." [Alameda County Deputy Sheriff's Ass'n v. Alameda County Employees' Retirement Ass'n., No. S247095 (Cal. Jul. 30, 2020)]

Tags: Funding of DB Plans  •  Retirement Plan Design  •  State and Local Government Plans

California Supreme Court Determines Local Governments Can Crack Down on Pension Spiking
Orange County Register Link to more items from this source
July 31, 2020

"Reformers had hoped the court would use this case to strike down the California Rule, or conclude that it allows broader adjustments to pension formulas going forward. They didn't get that." [Alameda County Deputy Sheriff's Ass'n v. Alameda County Employees' Retirement Ass'n., No. S247095 (Cal. Jul. 30, 2020)]

Tags: Retirement Plan Design  •  State and Local Government Plans

Editor's Pick Rising Cost of Government Employee Retirement Plans Is Untenable in Some States
Pension Pulse Link to more items from this source
[Opinion]
July 31, 2020

"In Canada, some of the most successful public pensions ... have all adopted a form of risk sharing ... When times are tough, they will partially or fully remove inflation protection for a brief period and typically restore it retroactively when their plan is fully funded again. This ensures intergenerational equity between active and retired members of the plan and it ensures that as more and more members retire, the risk of the plan is borne by active and retired members."

Tags: Funding of DB Plans  •  State and Local Government Plans

Puerto Rico Announces Referendum to Protect Public Pensions
The Washington Post; subscription may be required Link to more items from this source
July 21, 2020

"If approved, the measure would prohibit using money from Puerto Rico's crumbling public pension system to repay creditors -- challenging efforts by the federal control board overseeing the island's finances to make pensioners share the pain with investors in a restructuring of part of the island's more than $70 billion in public debt."

Tags: Funding of DB Plans  •  State and Local Government Plans

CalPERS Announces Health Plan Premiums for 2021
California Public Employees' Retirement System [CalPERS] Link to more items from this source
July 15, 2020

"The overall impact of COVID-19 on CalPERS' 2021 rates will be a modest 0.57%. Factors included in projecting COVID-19's impact included the savings due to delayed and deferred care this year, which CalPERS was able to use to reduce rate increases for next year."

Tags: Coronavirus (COVID-19)  •  Health Plan Costs  •  State and Local Government Plans

Public Pension Reform and the 49th Parallel: Lessons from Canada for the U.S.
Clive Lipshitz and Ingo Walter, via SSRN Link to more items from this source
July 10, 2020

"Using a primary dataset, [the authors] benchmark the 25 largest U.S. plans against their ten largest Canadian peers, exploring key issues in a paired analysis. Calibrating the two approaches, [they] extract key lessons from the Canadian experience for the U.S. and end with applicable policy recommendations."

Tags: Retirement Plan Design  •  Retirement Plan Policy  •  State and Local Government Plans


<< Older News  |  September 25, 2020

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