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  #1661  
Old 09-21-2019, 12:20 PM
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Mary Pat Campbell
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LONG BEACH, CALIFORNIA

http://www.gazettes.com/opinion/in_c...dfefdaf9b.html
Quote:
IN CLOSED SESSION: Unfunded Liabilities Scary

Spoiler:
Unfunded liabilities.

Sounds scary, doesn't it? It should — it translates to you don't have the money set aside to make payments you have promised to make.

When I hear the phrase, it reminds me of all those credit card bills. When it relates to the city of Long Beach, it means all those pensions promised to employees. There's some other stuff too, but the pensions are the 750-pound gorilla in this fight.

Long Beach currently faces a touch more than $1 billion in unfunded pension payouts. I say currently because the number changes every year depending on, of all things, how the stock market does.

Bear with me here. The explanation is pretty convoluted, even with budget manager Grace Yoon patiently going over it again and again. But it's important to understand if we ever hope to get ourselves out from under that liability.

So here's how it works. One way we keep public employees who are being paid less than what they could get in the private sector — something that's true for most of Long Beach's workers, whether you believe it or not — is to promise them one of the best pension plans around. Most employees currently get 2.5 percent of their salary for each year worked if they worked 30 years and are older than 55. A few years ago, the unions representing those workers agreed to drop the formula to 2 percent at 62 years old for new hires.

Police officers and firefighters have it even better. For years, the formula for public safety workers was 3 percent at 50 years old. That dropped to 2.7 percent at 57 for new hires a few years ago, during the big pension reform push.

Still with me?

In most pension plans, employees put a percentage of their pay into the pension fund, and the employer pays an equal amount. That contribution is 8 percent (9 percent for public safety) in Long Beach.

Only in past years, the city has agreed to pay big chunks of the employees' contribution instead of raises as part of negotiated salary increases. It got to where the city paid 6 percent of miscellaneous (everyone except public safety) employees and 7 percent for cops and firefighters.

Gradually, that responsibility has been put back onto the employees as another pension reform. Now employees pay their full pension contribution.

So where does all that money go? To an entity called CalPERS — the California Public Employees Retirement System (teachers have something similar, but let's not go there today).

This uber pension fund was formed to protect individual cities from disaster and to take advantage of the economies of scale.

But, as is usually the case with these things, there were unintended consequences.

CalPERS, like most pension funds, invests the money it is given to add to the pension pot and, theoretically at least, lower the amount member cities have to pay. That was working so well in California that in 2000 Long Beach and other cities were told that their liability was completely covered. In laymen's terms, there was enough money to pay the pensions of all those already retired or currently working for the city.

Then 2008 came along.

Suddenly, the CalPERS investment portfolio didn't look so good. In fact, it looked downright bad. And the call went out to all member cities to start putting big bucks in again or face the specter of insolvency down the road.

Lessons were learned, but the attempt to catch up continues today. The financial gurus at CalPERS come up with multiple ways to keep the pension fund solvent (Grace had the, well, grace, to skip trying to explain all that to me), which primarily came down to getting more money from Long Beach and our sister municipalities.

Yoon and her boss, John Gross, say that Long Beach's unfunded liabilities will continue to grow for the next 10 or 12 years. Then, with luck, the curve will start going down.

Long Beach has been prudent with its pension reform efforts, but there's very little left to reform going forward. Making early CalPERS payments will ease the pain down the road, but will not eliminate it.

So what's left? According to Gross and Yoon, we're down to cutting costs and/or increasing revenue. In other words, budget prudently and hope CalPERS and its investments don't go belly up again.

Feel better? Me neither. But at least I have a better understanding of what the city faces now.

Thanks, Grace.
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  #1662  
Old 09-21-2019, 12:20 PM
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Mary Pat Campbell
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OHIO

https://www.daytondailynews.com/news...jB7eHc1LxvaaK/
Quote:
Ohio’s largest public pension system looks to cut benefits

Spoiler:
Ohio’s largest public pension system voted this week to reduce cost of living benefits for current and future retirees — a move that requires legislative changes.

The Ohio Public Employees Retirement System voted 8-2 to ask lawmakers to allow the pension fund to freeze the cost of living adjustment in 2022 and 2023 for all retirees and delay the COLA for two years for all new retirees.Changes in pension COLAs is a big lever to straighten out a system’s finances. Likewise, retirees rely on COLAs over the long haul to preserve their buying power and keep pace with inflation.The proposed changes to the COLA are designed to wipe out $3.44 billion of $24 billion in unfunded liabilities facing OPERS. Investment gains and losses are recognized over multiple years in a “smoothing” method used by large pension systems. The pension fund lost 3.38 percent on its investments in 2018 — losses that have yet to be fully recognized.Related: Ohio’s public pension systems lost money in 2018, returns show“We are just being proactive and trying to be good fiduciaries of the system,” said OPERS spokesman Mike Pramik. Ohio law requires public pension funds to have enough assets on hand to meet their liabilities within a 30 year window. If OPERS doesn’t take action, the system would be out of compliance with that 30 year requirement.The OPERS cost of living allowance depends on when the worker retired. For those who retired before January 2013, it’s 3 percent each year. For those who retired after that, the COLA is tied to inflation and is expected to be 1.4 percent for 2020.OPERS trustees are also considering whether to require public workers hired after 2022 to contribute 11 percent of their wages toward retirement, up from the current 10 percent, Pramik said.
OPERS is the largest of Ohio’s five public employee retirement systems. It has $91.2 billion in assets and serves 1.14 million, including 213,000 retirees, 628,000 inactive members and 304,000 active workers.The assumed rate of return on the OPERS portfolio is 7.2 percent per year. Returns in recent years have bouned up and down: -3.38% in 2018, 16.62% in 2017, 8.23% in 2016, -.03% in 2015 and 6.7% in 2014.The second largest pension system in Ohio, State Teachers Retirement System, eliminated its COLA in 2017.
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  #1663  
Old 09-21-2019, 12:21 PM
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Mary Pat Campbell
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NEW YORK
DIVESTMENT

https://www.nydailynews.com/opinion/...obm-story.html
Quote:
NY pensions deserve protection

Spoiler:
Rockville Centre, L.I.: Re “Don’t be fuelish, Tom," (Sept. 2): New York’s retirees served the state all of their lives. As a former vice chairman of the FDNY Pension Fund and advisory board member for the Institute for Pension Fund Integrity, I know that it’s up to the public pension fund fiduciary to be able to hold up their end of the bargain and ensure retirees’ financial security is well-funded. As state controlleroverseeing New York State Common Retirement Fund (NYSCRF), Tom DiNapoli has been doing just that. But the recent outcries to divest our public pensions from fossil fuels are based purely in politics and will harm our retirees.

The NYSCRF oversees $210.5 billion, which benefits more than one million members, retirees and beneficiaries. Taking steps like divestment are futile and only jeopardize the financial security of the pension recipients.

Climate change is obviously an important issue, which is why DiNapoli released the Climate Action Plan. The plan seeks to double the fund’s commitment to its sustainable investment-climate solutions program to $20 billion over the next decade.

Currently, New York’s pension fund is 94.5% funded, which is above the 69% average for state pension funding. The NYSCRF is clearly performing well based on the current investment allocations. If DiNapoli is forced to divest from profitable investments, the fund’s financial integrity may be jeopardized. Through its current course of action, New York has ensured that pension recipients will receive their hard-earned retirement.

I applaud and support DiNapoli as he prioritizes his fiduciary responsibility over political whims. Activists’ and politicians’ actions only risk our well-deserved retirement. Richard Brower


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  #1664  
Old 09-21-2019, 12:22 PM
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Mary Pat Campbell
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CALIFORNIA

https://www.desertsun.com/story/news...ty/2389153001/
Quote:
$893K payment makes Rancho Mirage one of few California cities to fully fund CalPERS pension liability

Spoiler:
Rancho Mirage will pay just under $893,000 to fully fund its CalPERS pension liability, taking the money from its reserve funds.

The City Council’s unanimous vote on Thursday means on overall savings of $48,230 by making the lump-sum payment now on its three pension plans rather than waiting until June 30 when the amount would rise to $941,097.

The move makes the city one of just a few in the state with 100% funded pension plans, including Indian Wells, which paid nearly $1.2 million in 2017 to pay off its obligation.

Out of 1,457 miscellaneous pension plans statewide, only 35 of the plans are at least 98% funded, said Kofi Antobam, director of administrative services.

“That shows you that the city is taking a forefront (position) in making sure that our pension liability has been funded,” Antobam said.

City's reserves remain strong
The city will use $696,436 from the general fund reserves plus $178,574 from the general fund library reserve and $17,857 from housing authority funds to cover the cost.

After the payment, the city will have $67.6 million in reserves.

As of June 30, 2018, the city’s three pension plans were 98.8% funded, Antobam said.

In November 2017, the city made a lump sum payment of $5.35 million to bring the pension plan from 90.2% to 100% funded.

Antobam explained the 1.2 percentage point drop to 98.8% funded is the result of CalPERS changing its discount rate from 7.25% to 7% for three years, starting in fiscal 2017-18.

Rancho Mirage City HallBuy Photo
Rancho Mirage City Hall (Photo: The Desert Sun file photo)

If the council had chosen to not make the full payment toward the unfunded liability now, it would have had to follow the amortization schedule of CalPERS and take the city about 20 years and a total $1.74 million in payments – including $799,000 in lost interest charged back to the city at 7% and the $941,097 in principle – to retire the unfunded pension liability, Antobam said.

Pension costs are a concern of cities statewide.

“You really can’t go to a government seminar or training anymore without hearing about the pension crisis that is getting ready to crush people,” City Manager Isaiah Hagerman said.


In November 2017, after CalPERS amended its rules to allow cities to pay off the balance of what is due and owing, the council approved using $5.35 million in reserve funds to bring its pension plan from 90.2% funded to 100% funded.

What discount rate means
Hagerman explained that the CalPERS discount rate is the assumed rate of return on investments.

When a pension plan says it is going to earn 7.5% on its money after net cost, that is what is called a discount rate, he said.


The plan is funded with three sets of money: the return on investment; the employee’s contribution into the plan — which is fixed; and the employer contribution into the plan.

Lowering the discount rate to 7% means less money coming into that pension plan, he explained.

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“Well, the employee portion’s fixed, so that only leaves the employer to make up the (rest),” Hagerman said. “These plans all have very large balances, so there is a volatility ratio that is described within our plans that says, compared to payroll, there’s 10 to 12 times the amount of assets in the plan.

“When you think about it as a percentage of payroll, a 1% impact on the plan is really 10% to 12% of your payroll,” he said.

By lowering the assumption rate by half a percent and “these are very significant impacts to employers, because you’re reducing the amount of money that’s supposed to go to the plan from investments, the employee contribution is fixed which leaves the employer to make up that difference,” Hagerman said.


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  #1665  
Old 09-21-2019, 03:11 PM
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Mary Pat Campbell
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CALIFORNIA
ESG
DIVESTMENT

https://www.ai-cio.com/news/californ...wi-atrocities/
Quote:
California Pensions Could Be Mandated to Divest from Turkish Assets over WWI Atrocities
Legislation condemning Turkey for its failure to recognize the Armenian Genocide would result in California divestments.
Spoiler:
The California state legislature has passed an act intended to mandate that California public pension funds divest from assets affiliated with Turkey over the government’s failure to officially acknowledge its responsibility for the Armenian Genocide, a century-old atrocity that claimed the lives of approximately 1.5 million Armenians.

Assembly Bill 1320 would bar the California Public Employees’ Retirement System (CalPERS) and California State Teachers’ Retirement System (CalSTRS)—the two largest pension plans in the US—from making additional investments “in any investment vehicle that is issued, owned, controlled, or managed by the government of Turkey,” until January 2025, or until Turkey officially acknowledges its responsibility. The bill also mandates the pensions’ full liquidation of such investments within 18 months of the bill’s passage.

CalPERS expressed its opposition to the bill in a memo presented to the pension’s board of trustees, stating that any loss in investment income or fees related to divestiture would have to be reimbursed through employee and employer contributions.

“Every dollar in investment returns that is forgone, or expended on transaction costs and fees, must be offset by employer and employee contributions,” fund staff wrote in a memo. “If CalPERS were to divest from Turkish investment vehicles and the companies performed well, employers and employees would bear the investment loss and transaction costs to maintain divestment through increased contribution rates.”

The Los Angeles Times reported in March that thousands of people marched through the city dressed in all-black attire and waving the colors of the Armenian flag ”to demand that the century-old killings of 1.5 million Armenians officially be recognized as a genocide.”

“There can be no reconciliation if it’s not recognized as a genocide,” said Vilen Khachatryan, a member of the United Young Armenians group. “We march today to tell the world, ‘Never again.’”

This is not the first time that California leveraged basic human right violations to ban investments from a particular country. The state has acted against Iran for counts related to international terrorism, South Africa for its apartheid policy, and Sudan for the Darfur genocide. The state has also mandated widespread bans against gun manufacturers, thermal coal companies, and companies that have relatively weak environmental, social, and governance (ESG) policies.

CalPERS’s divestment policy states “while CalPERS wants companies in which it invests to meet high corporate governance, ethical, and social conduct standards, an investment in a

company does not signify that CalPERS approves of the company’s policies, products, or actions.”

CalPERS also stated that “there is considerable evidence that divesting is an ineffective strategy for achieving social or political goals. This is because the usual consequence is often a transfer of ownership of divested assets from one investor to another.” By foregoing its ownership in a company, it loses its influence through shareholder activism, CalPERS argued.


https://www.sacbee.com/news/politics...235306877.html
Quote:
Gavin Newsom tells CalPERS, CalSTRS to favor green investments in climate change order

Spoiler:
Gov. Gavin Newsom on Friday signed an executive order to leverage the might of California’s $700 billion public pension funds and the state’s purchasing power as a highway builder in a campaign to reduce greenhouse gas emissions.

Newsom’s order caps a week in his administration fought with Trump administration over the state’s authority to regulate greenhouse gas emissions through the California Air Resources Board, and in which the $83 billion University of California Retirement Plan announced that it would divest from fossil fuels.

“Our state is proof that you can reach some of the strongest climate goals in the world while also achieving record economic growth,” Newsom said in written remarks. “How we meet this moment will define our state – and country – for decades to come, just as the emergence of the internet defined our economy over the past few decades. We have to get ahead of this and align our state investments, our purchasing power and our transportation and housing policies to be ready to meet this moment head-on.”

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Newsom’s order does not instruct the $380 billion California Public Employees’ Retirement System or the $237 billion California State Teachers’ Retirement System to pull money out of oil and gas.

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Rather, the order directs the public pension funds to work with the Newsom administration on an investment framework that would “provide a timeline and criteria to shift investments to companies and industry sectors that have greater growth potential based on their focus of adapting to and mitigating the impacts of climate change, including investments in carbon-neutral, carbon-negative and clean energy technologies.”

Divesting from fossil fuels is a controversial subject for the public employee pension funds because all three state retirement plans are underfunded, and failing to hit investment targets could force taxpayers to kick in more money for civil servants’ pensions.

Some public employees and retiree groups have been outspoken in discouraging CalPERS and CalSTRS from considering any divestment. Last year, Corona police officer Jason Perez won an election for a seat on the CalPERS Board of Administration in part by criticizing the pension fund’s discussions on social and environmental issues.

Still, the pension funds regularly face calls to divest from oil and gas from Democratic leaders.

Treasurer Fiona Ma, for instance, last week called for CalSTRS to shift $6 billion in fossil investments to other industries. She is a member of the CalSTRS Retirement Board and the CalPERS Board of Administration. Both pension funds also withdrew investments from coal to comply with a 2015 state law.

“CalSTRS shares the governor’s sense of urgency and welcomes the opportunity to work together with the state and other partners to address climate change. We recognize the material and existential risks climate change poses to society, the economy and our investment portfolio,” CalSTRS Chief Executive Officer Jack Ehnes said.

Both CalPERS and CalSTRS have sustainable investment strategies they use to consider climate risk and to press corporations to account for the environmental impacts of their businesses.

“We agree with Gov. Newsom that climate change is a threat to business and to economic growth,” CalPERS Chief Executive Officer Marcie Frost said. “Climate change is a systemic risk to our pension fund and we have been actively engaged for years to confront it. With the world’s leading investors, we advocate for changes that minimize the financial risk to our investments while quickening the pace to a low-carbon economy.”

Newsom’s order further directs California state government to reduce greenhouse gas emissions when considering how to build highways and roads and in developing state-operated buildings. The order encourages the state to fund transit projects near job centers and to support alternative transportation methods.

The order also asks the California Air Resources Board to create new incentives for people who buy zero-emission vehicles. About 600,000 zero-emission vehicles are on California roads today.
https://www.sacbee.com/news/politics...235264787.html
Quote:
These California pension and perk bills had broad support. Why didn’t they reach Newsom?

Spoiler:
Three bills that would change California law to benefit public workers received broad support in the Legislature over the last year, but at the last minute didn’t reach Gov. Gavin Newsom’s desk.

The bills would have made cities responsible for mistakes that inflate retirees’ pensions, expanded workers’ compensation benefits and given broad legal privileges to communications between unions and workers.

Legislative holds on the bills in the last two days before the Legislature’s recess suggest Newsom’s administration had concerns about the bills, including increased public spending under two of them.

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“Typically when a bill passes both houses and they choose not to send it on to the governor, it’s because there’s some kind of bargaining going on with the governor’s office,” said Chris Tapio, a Sacramento public policy consultant. “Rather than risk a veto or pissing the governor off, they hold off on it, spend some time on it over the next couple months.”

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In other ways, Newsom was friendly to public employee unions this year. He was elected with broad financial backing from a range of unions and labor groups, including AFSCME, SEIU, the California Labor Federation and unions representing workers ranging from scientists to pipefitters.

His first budget dedicated $7.8 billion to pre-funding public pension debt, which helps public employee unions by taking some financial pressure off their members’ retirement plans.

Play Video
Duration 1:44California’s public pension crisis is bad and getting worse

California's two major public pension systems are underfunded and are asking local governments to pay more. Critics want to reduce benefits, while others say policymakers should allow time for recent changes to take hold.

By EMILY ZENTNER
His administration also quickly approved a new contract giving a 3 percent raise to the California Correctional Peace Officers Association, which spent $2.8 million to help elect him. His administration negotiated contracts with five other unions that include annual raises. Contracts with SEIU Local 1000 and the union representing state attorneys gave workers a new stipend to cover monthly health care premiums that amounts to a $3,100-per-year benefit.

The legislative holds prevented Newsom from having to decide whether to sign or veto the bill right now. Since the session goes through September of next year, the legislation can be called up again for amendments and another chance at passage.

Senate Bill 266, co-sponsored by the California Professional Firefighters and the Peace Officers’ Research Association of California, would make cities and schools pay for mistakes that CalPERS determines illegally inflate former employees’ pensions.

The bill would shift responsibility for the mistakes away from retirees, who unions say shouldn’t face surprise bills for benefits they were promised when they retired.

A coalition of local governments opposed it, citing concerns over sticking taxpayers with the bills. Former Gov. Jerry Brown vetoed a similar bill during the last session, saying the proposal should include a CalPERS review of any proposed pensionable benefits.

The bill cleared both chambers of the Legislature and was headed to the governor’s desk before being held on the last day of this year’s legislative session.

A spokesman for state Sen. Connie Leyva, D-Chino, who introduced the bill, said Leyva plans to keep working on the bill this fall. Leyva is a former president of California Labor Federation.

Assembly Bill 418 would give communications between unions and workers similar privileges to those afforded under attorney-client privilege. But it would go further, allowing either party to prevent the other from disclosing communications in civil legal proceedings. The bill is co-sponsored by the California Labor Federation, AFSCME and SEIU California.

Supporters say the bill would help protect workers, for example, when they talk with a union representative about filing a grievance or workplace action against an employer. Under current law, employers can access those communications in the discovery process of lawsuits, said Ash Kalra, D-San Jose, who introduced the bill. Kalra raised concerns that anti-union sentiments are on the rise nationally and that those kinds of invasions are growing more likely.

Opponents, including the California Chamber of Commerce, argued the proposal could impede workplace investigations by allowing unions to preventing workers — particularly those who aren’t union members but have communicated with union representatives — from voluntarily testifying in legal disputes.

Brown cited similar concerns when he vetoed an earlier version, saying the legislation “could compromise the ability of employers to conduct investigations into workplace safety, harassment and other allegations.”

The bill cleared the Assembly in April and was headed to a floor vote in the Senate in July, but never received one. On Sept. 12, it was held.

Kalra said the “clock ran out” on discussions to make the bill more acceptable for everyone involved.

“Even though the issue itself is relatively straightforward, it’s actually relatively complex as to how you develop a privilege, especially when it’s unique like this,” he said. “The governor’s office and I have both continued to work together in the interim to come back in January with language that works for everyone.”

Senate Bill 416 would extend to many more peace officers some workers’ compensation privileges that now are reserved for California Highway Patrol, firefighters and some others. The privileges include a presumption that heart problems are work-related.

The bill, sponsored by the Peace Officers’ Research Association of California, cleared the Senate before being amended and passed in the Assembly. The Senate approved the amended version, but the bill was held on the last day before a final vote in the Assembly.

The state Department of Finance had opposed the bill, saying it would result in “significant costs to state agencies and a broad range of local entities,” primarily by increasing workers compensation insurance premiums.

“SB 416 became a two-year bill to allow more time to work with the Governor’s Office and opposition to ensure the bill is fair for all interested parties,” Erin Hickey, a spokeswoman for Sen. Ben Hueso, who introduced the bill, said in an email. “We are planning to revive it.”

For bills sponsored by organized labor, the labor groups often take the lead in negotiations with the governor’s office, Tapia said.

In addition to concerns from the governor’s office, reasons for holding bills at the last minute can include a lack of signaled support from legislators on a final vote or the need for technical cleanup in cases where different bills might have conflicting provisions, he said.

“Those bills are still plenty alive once the Legislature comes back next year, and they have until September of next year to pass,” he said.
https://insurancenewsnet.com/oarticl...y#.XYZm2ehKiUk
Quote:
Calif. Gov. Newsom Announces Executive Action to Leverage State’s Pension Investments, Transportation Systems to Strengthen Climate Resiliency
Spoiler:
SACRAMENTO, California, Sept. 20 -- Gov. Gavin Newsom, D-California, issued the following news release:

* * *

- Governor directs Department of Finance to create a Climate Investment Framework to leverage the state's $700 billion CalPERS, CalSTRS and UC Retirement Program portfolio to drive investment toward carbon-neutral technologies

- Governor Newsom also signs legislation strengthening the state's emissions standards and establishing the nation's first "smog check" for diesel trucks

* * *

Just days before global leaders converge in New York City for Climate Week and months after California struck a major agreement with four automakers on vehicle emission standards, Governor Gavin Newsom today signed a landmark executive order to leverage the state's $700 billion pension investment portfolio and assets to advance California's climate leadership. The executive order also directs multiple state agencies and departments to review and update overall operations, transportation investments, and use of the state's purchasing power to advance groundbreaking climate goals.

The Governor also signed two important bills today to strengthen emission standards for trucks, semis and other high-pollution vehicles. SB 210 by Senator Connie Leyva (D-Chino) requires the California Air Resources Board (CARB) to develop and implement a Heavy-Duty Inspection and Maintenance Program for non-gasoline, heavy-duty trucks -- the first 'smog check' program of its kind in the nation. SB 44 by Senator Nancy Skinner (D-Berkeley) requires CARB to create a comprehensive plan for reducing greenhouse gas emissions from medium and heavy-duty vehicles. Medium and heavy-duty diesel trucks make up only four percent of the 28.2 million vehicles on the road in California but accounted for 20 percent of greenhouse gas emissions from the transportation sector and 8 percent of statewide greenhouse gas emissions this year. Cars, trucks and other vehicles are responsible for more than 80 percent of smog-forming pollution.

"In the face of the White House's inaction on climate change, California is stepping up and leading the way," said Governor Newsom. "Our state is proof that you can reach some of the strongest climate goals in the world while also achieving record economic growth. How we meet this moment will define our state - and country - for decades to come, just as the emergence of the internet defined our economy over the past few decades. We have to get ahead of this and align our state investments, our purchasing power and our transportation and housing policies to be ready to meet this moment head-on."

California is a global leader in climate change mitigation efforts through bold climate goals and actions, as well as leadership in the U.S. Climate Alliance and Under2 Coalition, using the state's power as the fifth largest economy in the world to drive positive action. California has ambitious and essential climate goals to transition to a healthier, more sustainable and more inclusive economy, including: reducing greenhouse gas emissions 40 percent below 1990 levels by 2030; providing 100 percent of the state's electricity from clean energy sources by 2045; reducing methane emissions and hydrofluorocarbon gases by 40 percent; and adding 5 million zero-emission vehicles to California's roads by 2030.

This executive order continues the Governor's commitment to strengthening California's resilience while investing in new technologies, programs, and best practices to lower carbon emissions. To mitigate climate threats to our communities and increase carbon sequestration, the Governor invested in forest health and fuel reduction and held utilities accountable for building resiliency. The Governor also directed state agencies to develop a comprehensive strategy to build a climate-resilient water system and made a historic investment to develop the workforce for California's future carbon-neutral economy.

The executive order will advance California's climate goals by leveraging:

State Investments: California has an investment portfolio of over $700 billion through CalPERS, CalSTRs, and the University of California Retirement System. As the state transitions to a carbon-neutral economy, and as other states and countries increasingly adopt ambitious climate policy, the state's investments must align with the reality of this major market shift. The Governor's executive order directs the Department of Finance to create a Climate Investment Framework to measure and manage climate risk across the state's investment portfolio, with the goal of driving investment toward carbon-neutral and climate resilient technologies. The Framework will provide a timeline and criteria to shift investments to companies and industry sectors that have greater growth potential based on their focus of adapting to and mitigating the impacts of climate change, including investments in carbon-neutral, carbon-negative and clean energy technologies.

Transportation Systems: The California State Transportation Agency (CalSTA) is directed to invest its annual portfolio of $5 billion toward construction, operations and maintenance to help reverse the trend of increased fuel consumption and reduce greenhouse gas emissions associated with the transportation sector. CalSTA, in consultation with the Department of Finance, is also directed to align transportation spending, programming and mitigation with the state's climate goals to achieve the objectives of the state's Climate Change Scoping Plan, where feasible. Specifically the Governor is ordering a focus for transportation investments near housing, and on managing congestion through innovative strategies that encourage alternatives to driving.

State Assets and Operations: California owns and manages major physical assets through the Department of General Services (DGS), including 19 million square feet of buildings and over 51,000 vehicles. We are also a major purchaser of products across our agencies. As a global leader on climate change, and as a responsible asset owner and manager, we must lead by example in our own state operations by aligning our operations with our values. As property owners and managers, we must take the physical impacts from a changing climate into account, as the private sector (bond raters and issuers, reinsurers and insurers) is increasingly doing. With this executive order, the Governor is directing DGS to identify opportunities to lower emissions and mitigate climate risk from the state's owned and leased assets, primarily buildings and vehicles, and to implement sustainable purchasing policies across state agencies that prioritize the purchase of environmentally preferable goods, consistent with state climate policies.

Vehicles and Electric Vehicle Infrastructure: Moving away from internal combustion engines is critical to reduce carbon emissions and to address major pollution issues across the state, especially in the Central Valley and Inland Empire. Through the executive order, the Governor directs CARB to push automakers to produce even more clean vehicles, and to find ways for more Californians to purchase these vehicles on the new and used markets. CARB is tasked with developing new grant criteria for clean vehicle programs to encourage manufacturers to produce clean, affordable cars and propose new strategies to increase demand in the primary and secondary markets for zero emission vehicles. Finally, CARB shall strengthen existing or adopt new regulations to achieve greenhouse gas reductions within the transportation sector.

Governor Newsom will travel to New York City next week to participate in New York Climate Week events and discuss California's climate leadership in sustainability, clean energy and fuel standards at the World Economic Forum.

A copy of today's executive order can be found here (https://www.gov.ca.gov/wp-content/up...EO-N-19-19.pdf).
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Old 09-21-2019, 03:12 PM
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ILLINOIS

https://prairiestatewire.com/stories...pension-reform
Quote:
Panel of experts discusses Illinois pension reform

Spoiler:
The City Club of Chicago held a panel last week to discuss the state's pension crisis and how to fix it.

State Sen. Heather Steans (D-Chicago), Civic Federation President Laurence Msall and Illinois Policy Institute Budget and Tax Research Director Adam Schuster spoke on the panel, which was moderated by Chicago Tribune Editorial Board Member Kristen McQueary.

Illinois Policy Institute Budget and Tax Research Director Adam Schuster
Illinois Policy Institute Budget and Tax Research Director Adam Schuster | Courtesy of Illinois Policy Institute
Schuster said pension costs are driving endless property and income tax hikes.

"Cash-strapped cities are forced to lay off current police officers and firefighters to keep their budgets," Schuster said. "I truly believe in the importance of keeping our promise to provide our public servants with secure retirement benefits, but the status quo does not work for anyone. It's a moral imperative that we act now while modest changes can still fix it. We owe it to our retirees, taxpayers and needy Illinoisians who rely on government services to finally solve this problem once and for all."

Steans said the legislature has been trying to do something about the issue, noting that changes were made in 2011 and attempted again in 2013 before the Illinois Supreme Court intervened.

"Saying we’re not doing things is frustrating," Steans said. "We have to look at this in a realistic way. We should have labor at the table working on this with us. The consideration model at least presents the opportunity to pass constitutional muster."

The consideration model would lessen benefits for current workers and enroll new workers in a hybrid plan that has both 401(k)-type components and a pension component.

"We can’t afford the current structure," Msall said. "We can’t afford paying as much of the budget now. The biggest challenge is because the public is not hearing innovative ways to address the core problem. Public officials need to step up and address it; the public will follow."

The panel members agreed that consolidation of pension funds would be a step in the right direction.

"There will be savings with consolidations," Msall said. "It would put us in a place to be much more accountable. But the next big step is recognizing who created the liability and who will be responsible for paying for it."

Schuster's enthusiasm for consolidation was a little more tempered.

"It has limitations," he said. "If you had a larger asset pool because of consolidation, that could be good. But it's not a solution on its own. There is no way out of this without addressing current workers and retirees."

Steans said nothing is off the table and that consolidation should be analyzed.
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ROCK ISLAND COUNTY, ILLINOIS

https://wqad.com/2019/09/18/retired-...hundreds-more/
Quote:
Retired Rock Island County superintendents receive highest pensions in the county – but there’s hundreds more

Spoiler:
ROCK ISLAND, Illinois -- Four retired superintendents are collecting the highest pensions in Rock Island County.

A pension is 80% of pay once you retire and it increases 3% every year. The retired superintendent with the highest pension in county is former Moline Superintendent, Calvin Lee. He contributed $400,000 to his pension payout of $7 million (what he will receive when he's 85) by the time he retired at 58. He gets an annual pension of $222,655.

Bettie Truitt, former Black Hawk College President, retired at 52. She contributed about $200,000 to her pension payout of $7 million and gets an annual $130,000 pension.

And it’s not just schools, former Rock Island County Sheriff – Michael Huff – retired at 53 and contributed about $100,000 to his $3 million payout and gets a pension of about $100,000 a year.

Click here to see a full list of pensions for former Rock Island County officials and employees.

Illinois residents, like Sue Mesa, was a former federal employee on the arsenal and is currently paid with a pension.

“It’s just a guaranteed retirement and I mean in today’s age you are lucky to get anything anymore from an employer,” says Mesa.

But when News 8 showed her the numbers of what retired Rock Island County officials are making with pensions she was in awe.

“That’s ridiculous,” she commented. “And the teachers are having to buy their own supplies. Yeah, what’s wrong with this picture?”

“It’s not fair to take the pensions away from teachers,” says retired Rock Island teacher, Patrice Kiefer. “The ‘higher-up’s’, they’re the ones making the big money – the superintendents, the administrators, they make ridiculous salaries. The rest of us have to scrape to get by.”

The watchdog group, Taxpayers United of America, came out with a study earlier this week that proposed changing all new hires to a 401K style system. That’s a change that would have to happen at the state level.

“You can’t change that,” says Rock Island County Board Member, Don Johnston. “That’s nothing you can do on the county level, frankly you can’t do that on the state level except for amending the constitution. Maybe that’s something people have to look into for a whole variety of things to change this type of thing.”

To cut back on county expenses the county took away pensions for county board members back in 2015.


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Old 09-21-2019, 03:13 PM
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OHIO

https://www.thecentersquare.com/ohio...30ff0a45e.html
Quote:
Ohio will likely have to reduce pension benefits to save system

Spoiler:
The Ohio Public Employees Retirement System may look to slash future benefits to overcome the largest unfunded liability that the system has ever faced.

OPERS is the largest public pension system in the state.

About 78 percent of OPERS’s liabilities are funded, which means that the pension system is underfunded by 22 percent, which amounts to $24 billion. Unless OPERS scales back its unfunded liabilities, it could have trouble paying out all of the benefits it is required to pay by law.

To help overcome this liability, the OPERS board voted to freeze the cost-of-living adjustment for 2022 and 2023. This will need to be approved by the state legislature to go into effect. After those two years, the adjustment would go back to current levels. Without the freeze, it would take OPERS about 27 years to pay off its unfunded liabilities, but this freeze cuts that back to 21 years. According to Ohio law, if it would take a pension system more than 30 years to pay off unfunded liabilities, then it would have to submit a plan to the legislature detailing how it will reduce the liability below that number of years. This freeze would prevent that from occurring.

Some of the other changes that OPERS is considering include raising the retirement age and cutting benefits for employees who are hired after 2022. This would also need legislative approval.

Michael Pramik, a spokesperson for OPERS, said that having unfunded liabilities is common and that a pension system that’s 80 percent funded is seen as good in pension circles. However, he said that with the largest unfunded liability and an uncertain investment outcome over the next 10-15 years, OPERS’s actuaries told system officials that they needed to reduce the unfunded liability.

Greg Lawson, an economist for The Buckeye Institute, said the proposed changes would be effective ways for OPERS to save money. The Buckeye Institute is an Ohio-based, free-market think tank.

Although cutting benefits is not popular, Lawson said that the pension system has been struggling and that this solution was expected eventually. For a long-term solution, The Buckeye Institute has encouraged gradually shifting from a defined-benefit system to a defined-contribution system, similar to a 401(k) plan.

“Such a solution would eventually eliminate unfunded liabilities from the state perspective and avoid any potential for a possible future taxpayer bailout,” Lawson said. “Further, public employees who go in and out of public service or those who do not plan to spend a full career working a public job are losers under the current system anyway. Their guaranteed pensions are much smaller than those who spend their entire career in a public job. A 401(k)-like plan that is portable between public and private employment will give them far more flexibility to take the kind of jobs they want rather than being compelled to stay in a job they may not like in order to get a ‘full pension.’ ”
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Old 09-22-2019, 06:22 PM
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OREGON

https://www.oregonlive.com/politics/...ributions.html
Quote:
Oregon PERS opens employer incentive fund to provide matching funds on extra pension contributions

Spoiler:
Oregon’s public pension fund has opened the door to its employer incentive fund, inviting its most deficit-challenged members to apply for matching funds from the state if they can come up with some extra dough to pay down their unfunded liability.


Twenty six employers stepped up immediately, promising lump sum pension payments ranging from $25,000 from the Molalla Rural Fire Protection District to $22 million from the Eugene Water Board. In exchange, each will receive a 25 percent match from the fund established by the Legislature in 2018 to encourage employers to prepay their future pension obligations.

The fund is not expected to have a significant impact on the pension system’s $27 billion unfunded liability, as the Legislature only appropriated $100 million this year to provide the matching funds. The fund is also slated to receive money from the Oregon Lottery’s sports betting revenues, as well as a portion of taxes corporations must now pay on repatriated profits from overseas. But it’s unclear how much that will amount to or how many employers have adequate financial reserves to make extra lump sum contributions.

The money is available on a first-come, first-served basis and the first round of applications was only open to employers whose individual unfunded liabilities exceed 200 percent of their payroll. That’s nearly 300 individual employers, including a handful of counties and cities and hundreds of school districts. So far, the 26 employers who applied have laid claim to $13.4 million in matching funds. PERS will accept matching fund applications from all employers as of Dec. 2.


Employers lump sum payments are deposited in side accounts at PERS and invested alongside regular pension assets. If the payments are made before Dec. 31, they will provide an offset to regular pension contributions in the 2021-23 biennium.


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Old 09-22-2019, 06:23 PM
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HAWAII

https://www.thegardenisland.com/2019...nsion-spiking/
Quote:
Council to address ‘pension spiking’

Spoiler:
LIHUE — A bill for an act for possible inclusion in the 2020 Hawaii State Association of Counties Legislative Package, proposed by councilmembers Mason Chock and Council Vice Chair Ross Kagawa, is attempting to address pension reform. The goal is to combat unsustainable past practices that are referred to as “pension spiking.” The bill aims to improve the short-term viability and long-term outlook for the Employees’ Retirement System of the State of Hawaii.

Pension spiking is when employees allegedly boost their pay intentionally through avenues, such as overtime, during their final three years of work in order to inflate their pension benefits.

A presentation made to the Kauai County Council by Thomas Williams, executive director of the state’s Employees’ Retirement System, showed that the county’s excess pension costs due to seven “spiking” retirees during fiscal year 2014 was around $213,000. That number was approximately ten times higher four years later when 21 spiking retirees cost some $2.4 million.

The bill essentially places a cap on allowable overtime and other supplementary payments, so that it “doesn’t get out of control,” Chock said.

This is a “huge problem,” Kagawa said.

“Nobody in the whole state wants to do anything about it,” Kagawa said. “But if you just look at the numbers … there’s abuse going on.”

The concern is that the cost will continue to escalate to a point where other services will be compromised.

“Our children are going to pay for all of this,” Kagawa said, adding that people are already upset that items like new roads aren’t getting addressed.

But Caroline Sluyter, communications officer for the Hawaii Government Employees Association, said there’s no evidence that employees are doing something intentional or wrong. She said that the word “spiking,” in and of itself, has a negative connotation.

“It implies something improper,” she said.

The HGEA, a union that represents government employees, is not supportive of the proposed legislation, “because it would be taking away what was promised to the employee in their contract,” Sluyter said.

“Employees who dedicate themselves to a career to serve the community; employees who struggle to make ends meet; employees who sacrifice much to reach retirement, are now being threatened with being part of a broken promise,” she said.

Chock said the bill is not meant as a punishment for employees but that there needs to be a conversation about the “real issues,” and taking proactive steps so that costs don’t keep exponentially rising.

“I’m not here to make this controversial,” he said during a recent council meeting.

He added that addressing the issue would upset some people, but more people would be upset if nothing is done, as a large portion of taxpayers will have to foot the bill.

Councilmember Luke Evslin said he’s grateful for the bill because it allowed for, “thinking out of the box.” But he was ultimately unable to support it because it’s a blunt instrument for a “specific problem,” he said.

Stable retirement and a benefits package are why people are attracted to government jobs and this could make it worse, he said.

“Spiking is a gigantic problem,” he said. “But a problem that’s perpetrated by only a few people and there are high numbers of people retiring right now.”

Councilmember Kipukai Kuali‘i and Council Chair Arryl Kaneshiro also weren’t ready to support the bill.

Kaneshiro said this was especially true because the problem is only exclusive to “certain departments.”

Felicia Cowden, however, said she supported the bill but with “great discomfort.”

“The hill that we have to climb is so big,” Chock said, adding that he’s open to other ideas to address the matter, “because we don’t have the time to just discuss it.”

When the bill for an act was discussed last month, Councilmember Arthur Brun was excused from the meeting, making it a split vote among the council. Therefore, the bill is up for discussion again at the next county council meeting at 8:30 a.m. on Wednesday at Council Chambers at the Historic County Building.
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