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  #41  
Old 01-08-2019, 10:31 AM
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KENTUCKY

https://www.ai-cio.com/news/kentucky...t-system-mess/

Quote:
Kentucky Lawmakers Return to Tackle Retirement System Mess
Pension reform, stymied in court, is on the top of the lawmakers’ agenda.


Spoiler:
As the Kentucky legislative session begins Tuesday, state pension reform is once again at the top of the agenda.

In 2018, the state Supreme Court unanimously struck down legislation passed by the General Assembly on the grounds that the way the bill was enacted was illegal.

This was the second time the pension reforms, which were to change the retirement benefits of new teachers and cut the number of accrued sick days used toward retirement, were cancelled by the courts last year.

Initially, the lower-level Circuit Court had negated the bill, but was challenged by Gov. Matt Bevin. He had set the measure in motion when he tucked the legislation into a sewage bill at the legislative session’s 11th hour. The changes were then fought by Attorney General Andy Beshear, who won both cases. Beshear is running for governor this year, against Bevin, who seeks another term.

“Any legislation must comply with the Kentucky Constitution and should result from an open and transparent process that includes all stakeholders,” Beshear told CIO in an emailed statement. “It is time for the Kentucky General Assembly to pass legislation expanding gaming and dedicate 100 percent of the revenue to our public pension systems.”

Despite last year’s setbacks, Bevin insists something can be done about the state’s $40 billion pension hole, and members of the legislature agree that it is a pressing issue.

“It’s well documented that we have somewhere around a $40 billion unfunded liability in the pension systems,” Senate President Robert Stivers told the Northern Kentucky Tribune. “We’re going to have to address that, and funding can’t be the only solution.”

Stivers added that actuarial analyses will suggest that “maybe only 20% of the problem is funding,” but even without that 20%, there is still a $32 billion issue due to “structural problems with the systems.”

Senate Majority Leader Daymon Thayer said he thinks there are enough state senators willing to pass “significant pension reform.”

“Our members in the Senate understand that this is a crisis and that we have to take some significant steps,” he said in an interview with news outlet WDRB.com.

Kentucky’s pension plan is 31% funded.

However, changes to the retirement systems are not the highest priority on state lawmakers’ agenda. They place a high priority on getting a school safety bill passed. This is in response to the Marshall County High School shooting last January, which saw the death of two students and the wounding of 19 others.

A bipartisan task force has been studying the school safety problem since June.

Governor Bevin could not be reached for comment.


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Old 01-08-2019, 02:28 PM
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CHICAGO, ILLINOIS

https://www.forbes.com/sites/ebauer/.../#4f65646f728c

Quote:
What's Worse Funded Than Teamsters' Central States? Chicago's Pensions

Spoiler:
Before the Christmas holidays, I focused extensively on the problems facing Taft-Hartley multi-employer pensions and the PBGC multi-employer pension fund. Although I'll be returning to the topic, with a Chicago mayoral election coming up soon (February 26th, no incumbent candidate, 15 candidates, April 2 runoff election if needed), I am taking some time to address the pension issues that next mayor will have to face.

To begin with a comparison:

The Teamsters/Central States' pension plan, projected to become insolvent in 2025, is 38% funded at a 5.5% valuation interest rate.

The four city of Chicago-controlled pension plans, in total, are funded at a rate of 27%, using a valuation rate of 7% (which, as a reminder, means that on an apples-to-apples basis, they'd be even more poorly funded). (An Illinois Policy Institute article from October 2018 gives an overview of the numbers; there are additional Chicago pension funds for teachers, park district and transit workers that are not included as city of Chicago funds.)


Of course, one might say that Chicago has the ability to tax its residents, and the Teamsters do not. But in the same way as the Teamsters cannot simply increase the contributions required of its participating employers without creating genuinely intolerable burdens, so too, Chicago can't readily solve its troubles with taxation. In 2018, Chicago's contribution to these funds totaled $1.02 billion and that figure is scheduled to increase to $1.2 billion in 2019 based on a contribution schedule agreed on in 2017. For reference, the city's total 2019 spending plan is $10.7 billion. Do the math: that's 10% of the city budget being spent on pensions.

But it doesn't stop there: as part of a contribution plan which is meant to ensure the city's pension plans achieve 90% funding by 2058, and which enables them to use the more advantageous expected-return-on-investments valuation interest rate, contributions are slated to double in five years' time, reaching $2.1 billion in 2023 and continuing thereafter at the level percentage of payroll necessary for each plan to reach that 90% funding target. If one assumes that the city budget increases at the same inflation rate that it assumes for its valuations, 2.5%, then this means that in 2023, 18% of city spending will be on pensions . Where will that extra money come from? Or, alternatively, what city spending will be cut in order to fund those pensions?

And, lest one think that the city can simply pare back its funding ambitions, those contributions are not simply necessary to meet some arbitrary future funding requirement. Looking specifically at the largest of these plans, the Municipal Employees' Annuity and Benefit Fund, funded coincidentally at the same 27% as the city plans in total, if the city were to keep contributions at their current level, increasing them only with inflation, based on the data in the most current actuarial report, and ignoring this past year's market downturn, this plan would become insolvent in 2027, depleting the pension fund entirely and becoming a "pay as you go" plan, that is, paying benefits directly out of city funds.

But wait, there's more!

One might be tempted to shrug this off: Chicago. Machine politics. It was ever thus and will always be, and indeed, reviewing past actuarial reports (to their credit, available online as far back as the 80s), for most of the plan's history, the Municipal Employees' plan's funding level was mediocre. But the plan had made significant strides in the 1990s, and, as recently as 2000, the plan was 94% funded (using, of course, the expected-investment-return method of valuation interest rate determination).

What happened?

Here's a simple progression of funded status over the past two decades ending at the 2017 actuarial report. (Note that the figures are hand-typed from the relevant valuation reports; I will of course correct any errors readers might notice.)


MEABF funded status 1997 - 2017OWN CALCULATIONS

Why the funded status dropped so dramatically is best viewed by looking at the progression of assets and liabilities --


MEABF assets and liabilities, 1997 - 2017OWN WORK

as well as the plan's contributions (the dip in 2014 is not a typo on my end but reflects benefit cuts which were restored in 2015 when the Illinois Supreme Court declared these changes to have been unconstitutional).


MEABF contributions, 1997 - 2017OWN WORK

To do some math, the plan liabilities increased by a factor of three over two decades' time, at a point when the relevant inflation factor was only 1.5. But until the implementation of the new funding plan in 2017, contributions stayed level, beginning and ending this two-decade period at $157 million.

And those liabilities did not increase due to some unavoidable misfortune. Yes, there's an extent to which assumption changes, in particular, the decline in valuation interest rates from 8% in 1997 to 7% in 2017 (both with the same net-of-inflation assumption, since the inflation assumption likewise dropped from 3.5% to 2.5%), played a role. And assets have decreased, but not due to a sustained investment loss so much as because those assets were being used to pay benefits.

But that's only a small part of the explanation.

At present, all employees hired before 2011, are eligible to retire at age 55 with 10 years of service, for the "money purchase" formula, or as young as age 50, with 30 years of service, for the traditional formula, which accrues benefits at the rate of 2.4% per year of service up to 80% pay replacement after 33 years of employment, in either case with a guaranteed 3% compounded annual benefit increase, plus benefits for spouses and children upon death, and disability benefits, and a special extra-generous formula for elected officials, in exchange for an employee contribution of 8.5% of salary (with 3% extra for elected officials), which essentially replaces their FICA contribution but for considerably larger benefits.

But the actuarial report contains a litany of benefit increases. In 1983, the guaranteed 3% benefit increases were added. In 1985, accrual factors of 1.8 - 2.0 - 2.2 - 2.4% by years of service replaced existing lower factors. In 1986, benefit caps for survivor benefits were removed. In 1987, the penalty factors for early retirement were halved, and exemptions added for long-service employees. In 1990, the accrual rate was changed to a uniform 2.2% for all years of service that would have previously accrued at 1.8 or 2.0%, the service requirements to be exempt from early-retirement reductions were made more generous, and the more generous elected officials' benefits were added. In 1992, a special early-retirement incentive was created with extra benefits for a half-year period. In 1997, eligibility for early retirement was extended again, minimum benefit levels were increased, and another half-year early retirement incentive was created. In 1998, the 3% increases were extended to certain groups which had previously been ineligible, and survivor benefit provisions were increased. In 2002, the accrual rate was increased from 2.2% to 2.4% for all service years, and the maximum benefit increased from 75% to 80% of final pay. In 2004, another early retirement incentive plan was created. Only after 2004 did the repeated benefit increases come to an end. It is whiplash-inducing to see the full list of increases, which continued to grow the liabilities year after year even after the spending spree of increases had come to an end.

All of which means that, while blame can't be assigned to "contribution holidays" as happened at the state level, none of these increases should have been legislated without the city increasing contributions at the level needed to fund them.
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  #43  
Old 01-08-2019, 02:46 PM
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OMAHA, NEBRASKA

Quote:
Watchdog group questions OPS on pension gap

Spoiler:
OMAHA, Neb. (WOWT) -- A watchdog group says Omaha taxpayers could be in for a property tax increase to make up for the gap in the district’s pension plan.


One member of the group raised the question at Monday night's school board meeting.

The district’s pension plan is underfunded, and members of Nebraska Taxpayers for Freedom believes the district will turn to taxpayers to make up the shortfall.

OPS board members expect to hear a lot from the public at tonight’s meeting.

NTF President Doug Kagan plans to talk to the school board about the district’s underfunded pension.

“It’s only about 50 percent funded,” he said. “They have a $712 million hole in their budget because of that.”

“If you compare the OPS pension system with the pension systems operated by other school districts in Nebraska, you’ll see the other school district’s pension funds are much better funded than OPS.”


Kagan believes the OPS board will try to get the money needed from the pension from taxpayers.

“They’re looking to either make up this unfunded portion of the pension plan through either another bond issue or property tax hike, and we would oppose both of those,” Kagan said.

Kagan would like to see budget cuts make up for the pension shortfall, but he might get opposition from the classrooms on that suggestion.


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Old 01-08-2019, 02:47 PM
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http://www.governing.com/topics/fina...-pensions.html

Quote:
Should Pensions Own Utilities? Congress Has Considered It Before.
The idea has advantages for pensions and is likely to be attractive to places with major pension funding issues.

Spoiler:
Democrats are taking control of the U.S. House next month and have promised that infrastructure will be one of their top priorities. In what seems like an unlikely pairing, public pensions could play a role.

This year, a proposed House bill would have cleared the way for pensions to buy municipal assets, such as water and sewer authorities. The idea has advantages for pensions and is likely to be attractive to governments with major pension funding issues. Think: Chicago, Connecticut, Illinois, Kentucky and New Jersey.

For one, it would immediately boost the value of the pension fund because the utility's worth would be based on its future revenue expectations. New Jersey did something similar by transferring ownership of its lottery to the state pension fund in 2017. At the time, the lottery was valued at $13.5 billion, which helped reduce -- on paper at least -- the pension’s unfunded liabilities. Proceeds from the lottery also helped lower how much the state had to annually contribute to pensions.

RELATED
With Election Over, Transportation Advocates Eye 2019 Battles Pension Politics: Should States Be Investing in Controversial Companies? Privatization or Not, Governments' Responsibilities Never End
Another appealing aspect is the potential benefit to struggling municipalities. Offloading the asset to a pension fund would result in a one-time cash infusion for the local government. It could also help the municipal books because a utility is typically viewed as a net drain on public finances.

But those advantages might not result in the best fiscal policy.

Municipal Markets Analytics’ Matt Fabian warns that the idea’s attributes are largely based on accounting gimmicks. “It’s only really the appearance of better funding on the assumption that the pension fund could sell the asset,” he says.

The notion of transferring ownership of public assets directly to pension funds has been bandied about for several years. But it hasn’t gained traction in part because it would require a change at the federal level in order for pension-owned utilities to continue issuing tax-free debt.

There are ways, however, to achieve something similar without Congress.

Connecticut, for example, recently established a committee to look at creating a state trust to hold some 7,000 public assets worth billions of dollars. In one scenario, the state’s woefully underfunded pensions could be given shares in that trust in lieu of a pension contribution from the state.

Looking ahead, the concept's prospects remain uncertain. The municipal community has been mum, and a spokeswoman for the National Association of State Retirement Administrators says they are still looking into the pros and cons.

In addition, the proposal needs a new champion as the Republican author of this year’s bill didn’t win reelection. But with Democrats in charge of the House, the idea’s benefits to struggling pension systems, which are in mostly blue states, may be tempting enough to keep it in play.


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Old 01-09-2019, 11:28 AM
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CONNECTICUT

Quote:
Despite Full Funding, Pension Gap for Connecticut Judges Grows

Spoiler:
Since 2012, Connecticut has paid the full annual cost of pensions for the state’s Judges, Family Magistrates and Compensation Commissioners Retirement System, nevertheless the pension debt for judges has increased during that time.

Although much smaller than Connecticut’s other retirement systems for teachers and state employees, the JFMCC Retirement System offers a glimpse into how the state’s long-term debt problem is not easily solved.

According to a fact sheet released by the Office of Fiscal Analysis, between 2012 and 2018 unfunded liabilities for the JFMCC Retirement System increased by $66.3 million to $211.2 million even as Connecticut paid the full annually required contribution toward the pensions.

This left the JFMCC system only 52 percent funded, down from 55 percent in 2012 and 70 percent in 2008.


Part of the problem is that Connecticut did not make any contributions to the JFMCC Retirement System in 2010 or 2011, leaving a $31.6 million gap, according to the state's actuarial valuations.

The other part of the problem is that until 2017, the JFMCC Retirement System assumed an 8 percent return on the funds' investments, but did not reach that goal on a year-over-year basis.

According to the State Treasurer's Office, the State Judges Fund -- which is responsible for the JFMCC Retirement System's investments -- returned 7.31 percent over the past five years.

The unfunded pension liabilities have driven the cost of employing state judges higher. According to a release by the State Comptroller's Office, fringe benefits for judges, family magistrates and compensation commissioners now total 97.97 percent of payroll, essentially doubling the price tag for each employee.

Gov. Dannel Malloy’s administration began making the full annual required contribution in 2012 and continued to pay the full ARC through 2018.

The cost of the JFMCC system rose from $15.1 million in 2012 to $25.5 million in 2018 to cover pensions for 493 active and retired judges -- an increase of 68 percent in six years.

The yearly cost of the JFMCC system to taxpayers is a drop in the bucket compared to state payments toward its major pension funds like the State Employee Retirement System and the Teachers Retirement System.

During his administration, Malloy made a point to fully fund the state’s pension systems, even noting that all of the increased revenue from the 2011 and 2015 tax increases went toward Connecticut’s pension debt.

Despite full funding, the unfunded liabilities for SERS has continued to grow, while TRS has shown slight improvement, but the costs continue to escalate and contribute toward Connecticut's ongoing budget deficits.

Between 2012 and 2018, the funded ratio for SERS declined from 42.3 percent to 38 percent and Connecticut’s payments toward the plan increased from $1.2 billion to $1.7 billion, according to the state’s actuarial reports.

For the same time period TRS went from 55.2 percent funded to 57.7 percent. Payments to TRS, however, grew from $757 million in 2012 to $1.2 billion in 2018 and are projected to grow to $1.4 billion by 2021, according to the state reports.

Malloy lowered the assumed rate of return for SERS and the JFMCC Retirement System in 2017 to 6.9 percent to be more in line with actual market returns. Malloy also stretched out SERS payments until 2044 to prevent the costs from spiking.

Nevertheless, SERS payments are projected to grow to $2.2 billion by 2023, while TRS payments could spike much higher by 2032 -- an estimated $3.5 billion per year or higher, depending on market returns.

Malloy proposed stretching out payments to the teachers’ pension system, but State Treasurer Denise Nappier warned it would violate the terms of a $2 billion pension obligation bond the state used to bolster the fund in 2008.

According to OFA’s fact sheet, the average pension for retired judges, family magistrates and compensation commissioners is $97,293. There are currently 209 active members and 284 retirees, 89 percent of whom are former judges.


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Old 01-09-2019, 11:31 AM
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KENTUCKY

https://www.state-journal.com/2019/0...ession-begins/


Quote:
Pension reform is main topic, but not the only one, on voters’ minds as legislative session begins

Spoiler:
While the General Assembly will discuss many issues of interest to Kentuckians in the 2019 session, many agree: Pension reform tops the list.


A cohesive message about public employee pensions seemed to echo throughout Frankfort as The State Journal asked people for their thoughts on the legislative session that began Tuesday.

“Fix the pension,” said resident Bill Lowery. “Absolutely, just fix the pension.”

Retired state employee Jan Barnes agreed.


“The most important issue is retirement. People depend on it; the economy depends on it. It’s a longstanding issue that no one paid attention to years ago.”

Along with pension reform, many residents said they would like to see other systems and policies adjusted.

“We need pension reform,” said Army veteran James Glasgow. “We also need to see reform of penalties for minor drug crimes rather than throwing people in cages. I’d also like to see more funding for our farmers market.”

Frankfort resident Katie French had similar ideas.


“I would like to see the General Assembly support teachers by keeping their pension promises,” she said. “Eliminate cash bail for non-violent suspects, raise minimum wage, and fund Kinship Care.” The latter is a program that provides funding for foster parenting.

Many Kentuckians are concerned with tax policy and the ability of legislators to generate revenue.


Amanda Groves and James Gearhart pose for a picture on the front steps of the Capitol on Tuesday. ‘I would like to ask the legislature to consider all citizens and help us thrive by finding revenue and fair tax policies,’ Groves said. Gearhart said that he would like to see the legislature help reduce the state’s reliance on coal. (Photo by Emmie Deaton)
“I would like to ask the legislature to consider all citizens and help us thrive by finding revenue and fair tax policies,” said Amanda Groves, a member of Kentuckians for the Commonwealth, which supports clean energy, tax fairness and restoration of voting rights, among other issues.

Like Groves, Mayor Roddy Harrison, of Williamsburg, hopes the legislature can compromise on tax policies.


Roddy Harrison (Photo by Emmie Deaton)
“I would like to see them work together and really get things done,” said Harrison. “I hope they push for CER (County Employee Retirement) separation (from other pension plans), and I’d really like to see the cities generate revenue by a city sales tax.”

Several are concerned with the future of the environment and hope the legislature can work together to preserve the Bluegrass.

“I’d like to see them develop alternative energy,” said James Gearhart, retired chaplain of Paducah Christian Church. “We need to reduce our reliance on coal.”

Protecting the environment is important for Jane Julian, of Frankfort.

“I hope the legislature will take steps to be more careful with preserving the woods,” she said. “As a voter and concerned citizen, I hope they can compromise and work together to create regulations and protections for our environment.”

Frankfort mother Tammy Acker said she “doesn’t care whose side they’re on, they just need to come together and do what’s best for Kentucky and America.”

Others are more cynical.

“I had a good friend that remarked regarding the General Assembly meeting 60 days every two years,” said Frankfort resident Jim Thompson. “He stated that the best General Assembly would meet two days every 60 years. I strongly second his sentiment.”



https://lex18.com/news/covering-kent...eral-assembly/
Quote:
General Assembly Begins Tuesday, Pension Reform At Forefront

Spoiler:
FRANKFORT, Ky. (LEX 18)– The 2019 General Assembly goes into session Tuesday with pension reform still at the top of the agenda.

Legislators are challenged to try for a third time to pass pension reform legislation after a state supreme court ruling found the 2018 attempt by Republican lawmakers unconstitutional.

Following that decision, Governor Matt Bevin called a special session during the holiday season.

It ended on its second day, with no meaningful legislation passed.

Republicans maintain super-majorities in the House of Representatives and Senate.



http://www.wave3.com/2019/01/08/firs...y-legislators/
Quote:
On first day, big issues arise for 2019 KY legislators
Spoiler:


FRANKFORT, KY (WAVE) - Kentucky’s 2019 legislative session got underway Tuesday, marking a third attempt by GOP lawmakers to pass pension reform.



But one of the first acts of the House was to establish a committee that could lead to a newly-elected Democrat losing his seat.




Rep. Jim Glenn (D-District 13) won his seat by one vote.
Rep. Jim Glenn (D-District 13) won his seat by one vote. (WAVE 3 News)



There were cheers and chants in the Capitol supporting newly-elected Rep. Jim Glenn (D-District 13), who won his Owensboro seat by just one vote.



After a legal challenge, the GOP-dominated house formed a committee to decide if there should be a recount.







When asked if he believed the same would be happening if he were a Republican, Glenn said, “I don’t know. I don’t know. It is what it is.”



Other potential partisan fights in the 2019 session include new restrictions on abortion and funding for charter schools.



Republicans, still angry over the state supreme court ruling that sent pension reform back to the drawing board, may target the courts as well.









“Essentially you’ve got circuit judges in Franklin County who become sort of super circuit judges,” Majority Floor Leader Sen. Damon Thayer (R-District 17) said. “And I think we’re going to look at court jurisdiction as a major topic that (Senate) President Stivers is going to work on this session.”







After a failed special session in December, GOP legislators are also focused on producing a pension reform bill that will survive a legal challenge.



“Pension reform is going to continue to be the most important issue that we face,” Thayer said. “It affects all 4.3 million Kentuckians and we’re going to be going back through the process to figure out what we need to do and what we can get the votes to pass.”




Senate Majority Floor Leader Damon Thayer (R) greeted Minority Floor Leader Morgan McGarvey (D) warmly on the first day of the session.
Senate Majority Floor Leader Damon Thayer (R) greeted Minority Floor Leader Morgan McGarvey (D) warmly on the first day of the session. (WAVE 3 News)



Democrats expect to see some across-the-aisle cooperation on issues, including funding for school safety.



“We need to talk about sports gaming which has bipartisan support, we need to talk about medical marijuana which has bipartisan support,” Minority Floor Leader Sen. Morgan McGarvey (D-District 19) said.







Both sides agree it is an ambitious agenda for a 30 day session.

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Old 01-09-2019, 02:38 PM
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OPEBs

http://www.governing.com/topics/fina...m_medium=email

Quote:
As Retiree Health-Care Costs Soar, Public Employers Turn to Private Insurers
Retiree health care is one of the fastest-growing line items in government budgets and, in response, some governments are scrapping their traditional health plans.
SPEED READ:
Unfunded retiree health-care liabilities have increased by $100 billion over the past two years to total just under $700 billion.
To offload some of the costs, states and localities are scrapping government-sponsored health plans and paying retirees instead to purchase insurance on insurance exchanges run by private companies.
That shift is expected to save Memphis, Tenn., $300 million over the next few decades.

Spoiler:
The cost of retiree health care is spiraling out of control. In just two years, according to a recent S&P Global Ratings report, unfunded retiree health-care liabilities across the 50 states increased by $100 billion to now just under $700 billion.

The problem is becoming so alarming that Dearborn, Mich., recently borrowed money to help fill the gap, a move deemed risky by financial analysts. A more acceptable approach taking hold, thanks in part to the Affordable Care Act (ACA), is scrapping government-sponsored health plans and instead paying for retirees to purchase a plan on a private health insurance exchange. The change is expected to save some cities hundreds of millions of dollars and make their annual retiree health-care costs more predictable.

RELATED
Pension Politics: Should States Be Investing in Controversial Companies? Trump Administration Gives States New Ways to Rewrite Obamacare Infrastructure Investments Won’t Matter Until We Lower Retiree Costs Localities Want to Make Retiree Bills More Affordable. Why Won’t States Let Them? Retiree health care, also known as other post-employment benefits (OPEB), is one of the fastest-growing line items in government budgets. That's because retirees are living longer and medical costs are rising faster than the rate of inflation.
In recent years, some governments have tried to manage costs by simply cutting health-care benefits -- something they legally can't do with pensions. In 2014, Memphis, Tenn., eliminated its 70 percent subsidy for retiree health insurance, and instead, plugged those savings into its vastly underfunded pension system. But unions fought the cuts, suing and pressuring the city to reinstate health care for retirees. With the subsidy gone, agencies were having problems with recruitment and retention, particularly police and fire departments where officers tend to retire well before the Medicare-eligible age of 65.

When Mayor Jim Strickland took office in 2016, he immediately tasked the city's new chief human resources officer, Alexandra Smith, to fix the problem. That's when the idea of turning to a health insurance exchange first emerged.

Private exchanges are different than the public, ACA exchanges. The idea is the same in that they pool risk and allow users to shop for their own health plans. But private exchanges are run by insurance and benefits companies. They have been around for much longer, generally catering to the 65 and older crowd looking for a health plan to supplement their Medicare coverage.

In recent years, governments, such as Cobb County, Ga., and the state of Ohio, have turned to these private exchanges for their Medicare-eligible retirees as a way to cut down on costs. But thanks to the ACA, private exchanges can expand their market to include users who are not yet eligible for Medicare. That's opening up new options for governments that are paying for health care for younger retirees.

For Memphis, joining an exchange gave the city a chance to control their health-care costs because the insurer -- rather than the city -- is on the hook for big claims.

Shifting that responsibility, says Smith, dropped the city's OPEB liability by $300 million to total $415 million. Costs going forward will also be more predictable, around $19 million per year. "The volatility we would have had by having retirees on our group insurance plan would have been much higher," she says. "Now we're able to better predict what our annual payments are."

It also gave the city something to offer its younger retirees. While Memphis didn't reinstate its 70 percent subsidy, it offers $5,000 annually for individuals and $10,000 for public safety retirees in the form of a health reimbursement account for those who aren't eligible yet for Medicare. The money helps cover a significant portion of the premiums for retirees who buy a plan on the exchange.

Police and fire unions were initially critical of the idea, calling instead for the government to reinstate the old retirement benefits.

Meanwhile, the idea is gaining traction. Ohio's police and fire pension has already made the jump, and the state's public employee pension plan is considering a similar move.


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CALIFORNIA

https://www.abc10.com/article/entert...e-8046e2701530

Quote:
Why Guy: Why doesn't 'Transparent California' post employee's pensions?
Many that don't know that you can log on to the website “Transparent California” and look up the salary and overall compensation for any state employee.

Spoiler:
Our weekly “Why Guy” Facebook question comes to us from Chris Grenz in Lodi.

"Why Guy! WHY aren't the pensions of our elected officials posted on www.transparentcalifornia.com? Would love to know how their pensions stack up against the average folk!"

Chris, many that don't know that you can log on to the website “Transparent California” and look up the salary and overall compensation for any state employee. You can see what your neighbor earns at the DMV or if your cousin Kenny makes more than you working at Cal Trans.


As for pensions of our elected officials, is that something not so transparent? Is that not our business, although we taxpayers foot the pension bill?

According to CalPERS spokesperson Mike Osborn, they "provide all pension information to Transparent California. What they post on their website is completely up to them."

So we contacted “Transparent California” directly and asked them where the info was.

Robert Fellner, who is in charge of posting the numbers, told ABC10 that, "In 1990, Prop 140 banned pensions for state lawmakers elected after Nov 6, 1990. Those elected before 1990 have to file to receive the pension, and not all necessarily do".

So that's the sauce. State lawmaker pensions are not listed on the “Transparent California” website, because those elected to office after 1990 no longer get them.


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  #49  
Old 01-09-2019, 02:44 PM
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Mary Pat Campbell
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NEW MEXICO

https://www.ai-cio.com/news/new-mexi...ency-proposal/

Quote:
New Mexico Considers New Solvency Proposal
Proposes three-year suspension on COLA adjustments to help attain 100% funded status by 2043.


Spoiler:
The New Mexico Public Employees’ Retirement Association (PERA) is considering a proposal that will increase the future funded status of the pension to 100% by 2043, from approximately 75% currently.

The primary tool in the proposal is to suspend cost-of-living adjustments (COLA) for current beneficiaries for a three-year period between 2019 and2022. Afterwards, retirees would be eligible for COLA adjustments at age 60 for those previously working in positions affiliated with public safety and age 65 for those who are not. COLA adjustments would be synced with the consumer price index (CPI), with a maximum adjustment of +3% and never going below 0%.

Additionally, a new flexible contribution system would be introduced where employer/employee contribution rates adjust upward or downward based on the funded status of the coverage plan, decreasing as funding status improves.

The contribution rate increases would be established as follows:



Under the proposed changes, there would be no reductions in base benefits and retirees’ purchasing power would be retained by paying COLA if the total fund’s funded ratio requirements are met, but never provide more than the actual cost-of-living increase.

Additionally, the plan would remove the mandatory seven-year restriction that the retirement system currently employees for retirees before they become eligible for COLA adjustments. Windfall COLA awards, which rely on “excess” investment returns, would also be removed through the plan. The board noted that the award system could result in multiple years without a COLA adjustment even if the plan is fully funded.

Through the changes, PERA estimates that it is 53% likely the funded ratio in year 2043 is at or above 100%, and currently projects it to be at 103.4% in that year.


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CALIFORNIA
CALSTRS

https://www.ai-cio.com/news/calstrs-...pus-expansion/

Quote:
CalSTRS Board Approves $300 Million Campus Expansion
A second office tower is aimed to attract and accommodate new investment staff, part of a strategy to manage more of the plan’s assets in-house.


Spoiler:
The board of the California State Teachers’ Retirement System has approved plans to add a second office tower alongside it 17-story headquarters building in West Sacramento, part of a $300 million campus expansion aimed at attracting new investment staff and other workers.

It was only 10 years ago that CalSTRS opened its first office tower along the Sacramento River, consolidating staff at three locations in the process. That tower, however, is now essentially full, even with CalPERS officials cutting the size of cubicles to accommodate more bodies.

While the new building would be for all workers at the world’s largest teachers’ pension fund, CalSTRS officials say it would be particularly helpful for attracting new investment staff to manage the system’s portfolio, now valued at $219.3 billion.

The officials told the board two months ago that the new building would have state-of-the-art renewable energy systems, lighting systems which adjust light depending on time of the day, and an overall inspiring environment, which would help attract new investment staffers to the Sacramento area.

“As much as I personally do like Sacramento, that alone would not pull someone from London to come to work here,” CalSTRS CEO Jack Ehnes told the board at a meeting two months ago. “It has to be a work culture and isn’t just about a building, but we have to be able to provide an attraction to that intellectual capital to bring into the organization. I don’t think we spend enough time recognizing how critical is that talent acquisition piece for an organization like us.”

CalSTRS spokesman Michael Sicilia told CIO in an email that the pension system had 159 employees in the investment office and expects to add another 59 over the next four years.

CalSTRS Chief Investment Officer Christopher Ailman had said in the past that he felt it was important to keep investment staff centralized, making the campus expansion the logical path. At one point, Ailman had thought of opening a San Francisco office to deal with the space shortage and to attract investment talent that wanted to work in a major city.

In a statement after the board approved the expansion on Nov. 10, Ailman said the new building would allow CalSTRS to increase its internal management of investments in a cost-savings move. CalSTRS now runs around 50% of its assets in-house but Ailman’s long-term goal is 60%.

“The more investments we can manage in West Sacramento, the less we have to pay external Wall Street firms,” Ailman said. “In fact, each internal investment manager added saves the fund about $1.2 million in external management fees per year.”

Ailman also mentioned CalSTRS’s collaborative model, a planned investment program in which CalSTRS will collaborate with other institutional investors, with the aim of bypassing or reducing external management.

“A critical component of the new CalSTRS collaborative model is hiring quality staff that can oversee and directly manage investment opportunities,” he said. “And a new, expanded headquarters facility allows us to grow, attract, and retain that talent.”

CalSTRS board member Harry Keiley, chairman of the investment committee, said CalSTRS is limited as a public pension plan in its ability to pay investment staffers, but said the new building could be the perk that attracts talent.

“I think we potentially could have a place that people really want to come work for,” he said. “They’re committed to a mission, committed to public service. Money’s not the only thing that’s motivating them. They want to be in an environment that’s healthy, that’s modern.”

In opting for the new building, the CalSTRS board rejected leasing space or buying an existing building across the river in Sacramento. The new 275,000-square-foot building is scheduled to be completed by 2021. The number of floors in the building has not been disclosed.

Most of CalSTRS staff would move to the new building though some would remain in the existing tower. Some floors of that building would be rented to outside tenants until CalSTRS officials determine the additional office space is needed for its own staff.

CalSTRS has about 1,150 employees, and that number could double when the pension fund reaches its full staffing over the long-term. It is not clear how long it would take to fully occupy both buildings but CalSTRS officials see at least several hundred more employees over the next few years as pension system assets grow.

CalSTRS officials began to consider a second building in 2014. Plan officials reconfigured space in the building after that to accommodate additional staffers. The building was originally designed to house 1,190 persons but cutting workspace allowed that number to increase to 1,352.

Some board members had raised concern about the expenditure for the new building at a September CalSTRS meeting but pitches by CalSTRS officials on how the building plan will help the investment office seemed to seal the deal in November. Board members were also warned they would lose $8 million in design and planning costs for the new building if they did not follow through with the expansion plan.


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