Keyword: pensions

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  • Stanford Study Reveals California Pensions Underfunded By $1 Trillion Or $93k Per Household

    12/03/2016 7:06:36 AM PST · by george76 · 65 replies
    Zero Hedge ^ | Dec 2, 2016 | Tyler Durden
    Earlier today the Kersten Institute for Governance and Public Policy highlighted an updated pension study, released by the Stanford Institute for Economic Policy Research, which revealed some fairly startling realities about California's public pension underfunding levels. After averaging $77,700 per household in 2014, the amount of public pension underfunding for the state of California jumped to a staggering $92,748 per household in 2015. But don't worry, we're sure pension managers can grow their way out of the problem...hedge fund returns have been stellar recently, right? Stanford University’s pension tracker database pegs the market value of California’s total pension debt at...
  • DuPont to end pension contributions, freeze benefit plans

    11/18/2016 7:26:21 PM PST · by george76 · 57 replies
    UPI ^ | Nov. 18, 2016 | Ed Adamczyk
    The company said the move is an alignment with industry trends in which fewer companies offer pensions. WILMINGTON, Del. -- The DuPont Company said it will eliminate its pension contribution for active employees. ... active employees will no longer accrue additional benefits, and employees under age 50 also will no longer receive dental, medical and life insurance benefits in retirement. ... Since 1998, nearly one-quarter of all Fortune 500 companies have stopped contributing to employees' primary pension plans, and 40 percent offer only a 401(k).
  • Pension Debt ‘Like a Mortgage?’ Yeah – On a Home You Sold Years Ago

    11/17/2016 1:10:11 PM PST · by MichCapCon · 1 replies
    Michigan Capitol Confidential ^ | 11/15/2016 | Tom Gantert
    The upcoming lame-duck legislative session may see a push to reform the state’s notoriously underfunded school and municipal pension systems. As usual, some beneficiaries of the current system are circling the wagons to preserve the unsustainable status quo. Which beneficiaries? Not current or future retirees — their benefits are guaranteed by the state constitution. No, it’s the bureaucrats who manage these systems. Their jobs become less important if the systems get smaller as new employees are no longer enrolled in them — exactly the reform under consideration. Pension officials may want to reexamine one new line of defense, though, which...
  • Rising Pension Costs Bury Michigan Schools Despite Past Tweaks to System

    11/08/2016 5:44:32 AM PST · by MichCapCon · 11 replies
    Michigan Capitol Confidential ^ | 11/6/2016 | Tom Gantert
    The Livonia public school district is like many around the state suffering the double whammy of declining student enrollment and skyrocketing pension costs. Since 2011, a reduced enrollment has cost Livonia $13 million in state funding, while its pension expenses have more than doubled, from $12.2 million in 2011 to $26.3 million in 2016. Combined, the double-hit represents a $25 million reduction in annual cash flow. The district’s total state revenue has remained level over that six-year period at $106 million despite the drop in enrollment. If an $80 million annual countywide school property tax increase is approved by voters...
  • State Policies Created School Pension Pain

    10/18/2016 1:04:09 PM PDT · by MichCapCon · 2 replies
    Michigan Capitol Confidential ^ | 10/13/2016 | James Hohman
    Pension costs are forcing tough choices on Michigan’s school districts. Their problems are caused almost entirely by state policies, so the solution must come from the state. In Michigan, school districts have little to say about the retirement benefits offered to their employees; all the key decisions are set by state policy. The state requires districts to use its retirement system, sets its benefits, and decides what the funding assumptions and policies will be. To pay for pension benefits, the state assesses districts a percentage of their payroll. A district sends 36.31 percent of its payroll to the school pension...
  • Union Survey: Michigan Teachers Want Pension Reform

    10/13/2016 10:58:48 AM PDT · by MichCapCon · 5 replies
    Michigan Capitol Confidential ^ | 10/12/2016 | Jarrett Skorup
    The Michigan Education Association recently released a survey of some of its membership. Much of it isn’t surprising — like other workers, teachers want to make more money and don’t like how they are evaluated. But one key question is about retirement and shows that school employees don’t feel secure with the current teacher pension system. The survey asks: “Do you feel that you’ll be able to comfortably retire?” Only 12.2 percent answered “yes,” while 52.2 percent said “no,” and 35.6 percent were unsure. There is reason to be concerned. The teacher pension system, MPSERS, has nearly $27 billion in...
  • Pension Crisis Means Tax Hikes and Cutting Cops

    09/30/2016 8:20:39 AM PDT · by MichCapCon · 14 replies
    Michigan Capitol Confidential ^ | 9/29/2016 | Anne Schieber
    Michigan should transition all retirement and health care benefits for government employees to 401(k)-style benefits that are common in the private sector. That was the consensus of the West Michigan Policy Forum, which held its fifth conference in Grand Rapids on Monday. “The status quo is unacceptable and unsustainable and we have a stewardship obligation to leave things better off in the future and you can’t do that unless you deal with these issues,” said David Walker, former comptroller general of the United States and former head of the U.S. Government Accountability Office. Walker unveiled a study commissioned by the...
  • How pension deal went wrong & cost California taxpayers billions [OPPS Dems Off by 1/4 TRILLION $$ ]

    09/18/2016 4:12:15 PM PDT · by NoLibZone · 35 replies
    Los Angeles Times ^ | Sept 18,2016 | Jack Dolan
    It was a deal that wasn’t supposed to cost taxpayers an extra dime. Now the state’s annual tab is in the billions, and the cost keeps climbing. ith the stroke of a pen, California Gov. Gray Davis signed legislation that gave prison guards, park rangers, Cal State professors and other state employees the kind of retirement security normally reserved for the wealthy. More than 200,000 civil servants became eligible to retire at 55 — and in many cases collect more than half their highest salary for life. California Highway Patrol officers could retire at 50 and receive as much as...
  • This is How You’ll Bail out Municipal Pension Funds: Check the bills in your mailbox. [Chicago]

    09/17/2016 10:35:16 AM PDT · by Lorianne · 47 replies
    Wolf Street ^ | 15 September 2016 | Wolf Richter
    It has gotten so bad that the phrase “Pension Crisis” made it into Wikipedia. It’s the perplexing reality that municipal, state, federal, and corporate pensions in the US and similar schemes around the world are so badly underfunded that it will be impossible to fulfill the promises by a wide margin. By many trillions of dollars. With state and municipal pension funds in the US, the situation is particularly tricky because the beneficiaries are voters and employees of the government, and politicians of all stripes bought their votes with promises of low contributions and rising benefits. They got away with...
  • Foundation Examines Michigan Pensions and Finds - Mismanagement

    09/08/2016 11:02:52 AM PDT · by MichCapCon
    Michigan Capitol Confidential ^ | 9/5/2016 | Derek Draplin
    Michigan’s retirement system for state employees has set aside 88 percent of the money needed to cover the benefits promised to current and future retirees. That's a better-than-average level for government systems, and the reason lies in part in a major reform adopted here 20 years ago. That is one finding of an updated study on public pension reform conducted by the Los-Angeles based Reason Foundation. Had the state not reformed the pension program, it would only have 68 percent of what is needed to cover future benefits workers have already earned. Through the reform, Reason estimates, the state avoided...
  • Unfunded SC pensions 'out of control'

    09/05/2016 12:40:03 PM PDT · by Lorianne · 31 replies
    Billions in unfunded obligations in the South Carolina pension funds for state and local government workers, teachers and police officers are “a freight train out of control,” a state representative said Tuesday. The unfunded obligations of the largest of those pension funds, the S.C. Retirement System, are expected to grow by $1.4 billion over the next year, according to actuarial firm Gabriel Roeder Smith and Co. That system serves more than 180,000 state and local government employees, including teachers. Another 134,634 retirees also are part of the system. The Retirement System has about $24 billion in assets, according to the...
  • What Weiner Walks Away With (1.2 Million+ Congressional Nest Egg)

    08/31/2016 5:40:49 PM PDT · by Regurgitated · 22 replies
    Market Watch ^ | Published: June 17, 2011 11:55 a.m. ET | Jack Hough
    After just 12 years on the job, the departing Congressman gets hefty retirement benefits. ... Suppose such a worker left his job today and rolled over his 401(k) proceeds to a self-directed retirement account. He grows his money at 5% a year and then draws a 4% income in retirement. By age 56 said worker would have enough to produce $15,000 in yearly income. If he waited until 62 he could collect $20,000. If that seems unfair, it gets worse. First, the 401(k) is contributing mostly his funds, while the federal pension is paid mostly from taxpayer funds. Second, after...
  • Welcome To The Third World, Part 18: Pensions Overwhelm Public Services

    08/29/2016 2:48:12 PM PDT · by Lorianne · 13 replies
    Dollar Collapse ^ | 26 August 2016
    Citizens of the developed world are watching Venezuela’s descent into financial and political chaos mostly, it seems, with amused detachment, safe in the assumption that we’ll never end up hunting our cats and dogs for food. But – since Europe, Japan and the US are making essentially the same mistakes as Venezuela’s past and present governments – we might want to question that certainty. Consider what’s happening in the third biggest US city: Chicago’s detective force dwindles as murder rate soars [see excerpt at source] Why should a city as apparently affluent as Chicago have such a nightmarish crime situation?...
  • Overworked San Jose Officers Camping Out in Parking Lot

    08/26/2016 10:06:22 PM PDT · by nickcarraway · 17 replies
    NBC Bay Area ^ | Aug 26, 2016 | Ian Cull
    Some SJPD cops are working so much overtime, they're forced to stay in RVs at department headquartersThe officer shortage at the San Jose Police Department is hitting a critical point as officers say they're forced to work so much overtime that some are camping out in the parking lot. It's beginning to look like an RV park next to police headquarters. Inside the motor homes, officers are just trying to get what little sleep they can. "You don't know when you're a San Jose police officer when you're going home," said James Gonzales, vice president of the San Jose Police...
  • Illinois officials: Pension change could be 'devastating'

    08/24/2016 9:22:31 PM PDT · by Olog-hai · 27 replies
    Associated Press ^ | Aug 24, 2016 4:28 PM EDT | Sara Burnett
    Gov. Bruce Rauner’s administration says a pending move by Illinois’ largest public-pension fund would increase the state’s required payment by hundreds of millions of dollars, potentially leading to higher taxes or massive cuts to education and social services already suffering amid a budget crisis. The board of the Teachers Retirement System, which serves more than 400,000 teachers outside of Chicago, is scheduled to vote Friday on whether to lower its expected rate of return on investments. A reduction would trigger a larger contribution from the state, where the Republican governor and Democrat-led Legislature have gone more than a year without...
  • Ten Facts About Government Pensions In Michigan

    08/17/2016 1:10:48 PM PDT · by MichCapCon · 7 replies
    Michigan Capitol Confidential ^ | 8/14/2016 | Josh Paladino
    1. Michigan’s school retirement system has a $26.7 billion unfunded liability. Officials estimate that to pay the benefits promised to current and future school retirees, there needs to be $67.7 billion invested in the pension fund right now. But persistent underfunding means the actual amount is just $41.0 billion for the Michigan Public Schools Employees Retirement System (MPSERS). This leaves the system only 60.5 percent funded — the largest shortfall since it began. Unfunded liabilities increased $9.1 billion over the past five years. The problem is not limited to schools, though: Pension funds at Michigan’s counties and 100 largest cities...
  • In Chicago, Rahm Emanuel finds a typically Democratic solution to his pension fund problems

    08/07/2016 4:44:23 PM PDT · by Kaslin · 43 replies
    Hot Air.com ^ | August 7, 2016 | JAZZ SHAW
    With all the trouble that Rahm Emanuel has been having in Chicago lately, specifically with unrest surrounding his police department and other scandals, it’s easy to forget that he’s dealing with another serious problem: his city is nearly bankrupt. As with so many other large, Democrat run municipalities, the chief culprit here is the massively underfunded pension system for municipal workers. Their unions negotiated some real sweetheart deals for them over the years, but the costs were completely unsustainable. When the city began to go broke, no real compromise was ever offered by the unions so Rahm is left to...
  • Who Will Bail Out Insolvent Union Pension Funds?

    08/05/2016 6:19:53 PM PDT · by reaganaut1 · 41 replies
    Forbes ^ | August 5, 2016 | George Leef
    Bernie Sanders isn’t going to be the next president, but one of the bills he has sponsored, the Keep Our Pension Promises Act (KOPPA)could become law during the next president’s term. That ought to worry anyone who knows that the collectivistic instincts of Bernie Sanders mean spreading the costs of bad policies to the entire population. Here’s the background. The Central States Pension Fund (CSPF) of the International Brotherhood of Teamsters has a troubled history going back to its founding in 1955 by long-time Teamsters president Jimmy Hoffa. (Carl Horowitz of the Organized Labor Accountability Project looks into that history...
  • Detroit Was Just the Beginning: The Crisis of City Pension Systems

    07/29/2016 1:56:36 PM PDT · by MichCapCon · 4 replies
    Michigan Capitol Confidential ^ | 7/27/2016 | Josh Paladino
    In 2014, Detroit retirees learned the consequences of waiting too long to reform pensions. Retirees took a $1.3 billion hit to their pensions because of a mismanaged and underfunded system. Michigan taxpayers had to pay $200 million to clean up the problem. But other municipalities around Michigan have underfunded systems, too, and only some are taking concrete steps to solve the problem. Michigan Capitol Confidential looked at Michigan’s 100 largest cities and found that 80 of the systems were underfunded. Combined, these 80 cities and townships have only saved 62 percent of what they will need to pay the pensions...
  • COOK COUNTY PROPERTY TAX BILLS CAUSE OUTRAGE [Pensions]

    07/27/2016 6:41:35 AM PDT · by C19fan · 50 replies
    ABC 7 News Chicago ^ | July 5, 2016 | Charles Thomas
    Cook County taxpayers are outraged after property tax bills showed up in the mail. The bills are skyrocketing this year. The city of Chicago and its public school district's fiscal problems literally hit home over the weekend, when property owners saw their second installment tax bills. Outside the assessor's office, city homeowners told one property tax horror story after another.
  • How Some Cities Dodge the Unfunded Pension Liability Trap

    07/26/2016 6:39:25 AM PDT · by MichCapCon · 10 replies
    Michigan Capitol Confidential ^ | 7/23/2016 | Josh Paladino
    When a city fails to properly fund employee pensions in the year they are earned, it creates an unfunded liability that will require more money later to backfill the obligation. Since municipalities have limited budgets, they typically cut from police, fire, and other community services to pay the deferred pension costs. Flint is one example out of many. The cost of catching up on past pension underfunding has skyrocketed, and the city now pays $20.4 million every year — a 50 percent increase since 2010. Filling this hole now consumes 42 percent of Flint’s general fund budget. But some local...
  • New report calls for ‘justice for millennials’

    07/18/2016 5:05:36 PM PDT · by BenLurkin · 45 replies
    cnbc.com ^ | 07/18/2016 | Luke Graham
    The report, "Stagnation Generation", calls for the social contract between young and old generations to be renewed, as millennials are at risk of becoming the first generation to earn less over their lifetime than earlier generations. According to the report, in the U.K. today's 27 year olds are earning the same amount as a 27 year old would have 25 years ago. "A typical millennial has actually earned £8,000 ($10,587) less during their twenties than those in the preceding generation – generation X," the report claims. ... Meanwhile, young people are failing to get onto the property ladder. The report...
  • How Bad Investment Rate Projections Cause Pension Underfunding

    07/18/2016 10:32:09 AM PDT · by MichCapCon · 6 replies
    Michigan Capitol Confidential ^ | 7/11/2016 | Josh Paladino
    Michigan’s 100 largest cities and townships have over $5.4 billion in unfunded pension liabilities. The liabilities are the difference between what municipalities have promised to public workers as retiree benefits and what they have put aside to pay for them. A main driver behind this future debt seems to be the “discount rate” – the investment rate cities assume when projecting costs far off in the future. Some cities assume extremely generous market returns, which mean they pay less in the short term but much more later when their assumptions turn out to be too high. But cities that use...
  • TEAMSTERS (IBT) Nash Finally Sentenced, Gets Off Easy

    04/16/2002 2:52:21 PM PDT · by knak · 10 replies · 564+ views
    nlpc ^ | 4/15/02
    Almost 55 months after confessing felonious conduct, Teamster money-laundering scandal figure, Jere Nash, has finally been sentenced. U.S. Dist. Judge Thomas P. Griesa (S.D.N.Y., Nixon) sentenced Nash Apr. 9 to a mere two years probation for his role in a series of schemes which lead to the embezzlement of some $885,000 from the Int'l Bhd. of Teamsters' treasury and to $538,100 in illegal campaign contributions to the failed reelection campaign of expelled IBT president Ron Carey. The sentencing appears to have been hush hush: the four N.Y.C. major dailies and the two Washington, D.C., dailies apparently did not cover the...
  • San Francisco seeks to ban pension fund from investing in gun industry

    06/28/2016 6:07:31 PM PDT · by Lonely Bull · 23 replies
    KTVU ^ | Jun 28 2016
    SAN FRANCISCO (KTVU) -- The San Francisco Board of Supervisors on Tuesday approved a measure that would ban the city employee retirement system from investing in companies that participate in firearm and ammunition manufacturing. The resolution by the supervisors could have a ripple effect throughout the country as the debate about gun control grows in the wake of a mass shooting in Orlando two weeks ago at a gay nightclub that left 50 people dead and several others injured. San Francisco Mayor Ed Lee is trying to gather support nationwide by asking the mayors of both Boston and New York...
  • Pension Funding: Why Your Town is Going Broke

    06/28/2016 10:29:32 AM PDT · by MichCapCon · 23 replies
    Michigan Capitol Confidential ^ | 6/22/2016 | Tom Gantert
    Just 13 percent of the local governments whose retirement systems are administered by a statewide entity have set aside enough money to pay the pensions promised to their workers. The Municipal Employees’ Retirement System (MERS) administers pension systems for 728 local cities, villages, townships, agencies and more. But only 97 of those systems have adequately funded their pension obligations, according to the operation’s most recent report that covers up to Dec. 31, 2014. Local government employees covered by MERS are owed some $12 billion worth of retirement benefits — but their employers have not set aside enough to cover the...
  • Chicago Is Pushing For A Massive Bailout Of Its Public School System

    06/27/2016 1:35:32 PM PDT · by Zakeet · 29 replies
    ZeroHedge ^ | June 27, 2016
    It is well known that Chicago's pension liabilities have completely decimated the city's finances and currently stand at close to $20 billion. Faced with a significant challenge of meeting funding obligations as a result of a 2010 state law, Mayor Rahm Emanuel recently won a slight reprieve in the amount of money the city would have to contribute to fund the liabilities over the next few years, as recently Illinois lawmakers overrode Governor Bruce Rauner's veto and will now change the legislation in order to allow the city to defer payments to fund pensions. Under the prior legislation, Chicago was...
  • Zombie states deteriorating faster and further

    06/24/2016 12:44:11 PM PDT · by Lorianne · 4 replies
    Truth in Accounting ^ | 20 June 2016 | Bill Bergman
    2014 article by author 'Zombie' Pensions: When Accounting Practices Hide the Truth from Taxpayers http://www.governing.com/gov-institute/voices/col-zombie-public-pension-funds-accounting-practices.html
  • State pension fund investment returns fall short ( Colorado )

    06/23/2016 7:18:08 AM PDT · by george76 · 14 replies
    Herald ^ | June 22, 2016 | Peter Marcus
    State Treasurer Walker Stapleton and PERA Executive Director Greg Smith disagree about how serious the disappointing 1.5 percent return on retirement investments the Public Employees’ Retirement Association fund for 2015 will be in meeting future pension obligations. ... State Treasurer Walker Stapleton said Tuesday’s announcement from the Public Employees’ Retirement Association is evidence of a mishandling by the board, in line with concerns he has raised for several years. ... Stapleton is outraged. For several years, the Republican has shouted for more conservative assumptions. He worries about long-term stability under a high projected rate of return. “PERA has assumed the...
  • Column: Why is Illinois really circling the drain?

    06/03/2016 2:12:12 PM PDT · by Carl Vehse · 13 replies
    Chicago Tribune ^ | June 2, 2016 | Eric Zorn
    "The Democrats have spent our state into the toilet for 30 years" — Republican Gov. Bruce Rauner, speaking to reporters Tuesday in Springfield "Nice sound bite! And he's right about the plumbing situation. Without question, Illinois' financial condition is metaphorically akin to unpleasant substances found deep in the commode, and it's getting worse every day the nearly yearlong budget stalemate continues."
  • Illinois Legislature Overrode Rauner Veto To Pass New Chicago Pension Law

    05/31/2016 2:46:23 PM PDT · by ChicagoConservative27 · 5 replies
    On Monday, the Illinois legislature passed a bill lowering the amount the city of Chicago has to pay into police and firefighter pensions in 2016. To do this, the legislature overrode a veto from Gov. Bruce Rauner, confirming what we already knew: It's really, really, really, really hard to agree with Rauner about anything at this point. For no one would it be harder than Mayor Rahm Emanuel, once Rauner's buddy in vacationing and wine-sipping. Rahm became basically apoplectic when Rauner vetoed the pension bill on Friday, saying in a variety of press statements that Rauner's veto would trigger a...
  • Here's Why All Pension Funds Are Doomed, Doomed, Doomed

    05/30/2016 8:52:25 AM PDT · by Lorianne · 23 replies
    Of Two Minds ^ | 26 May 2016 | Charles Hugh Smith
    There are limits on what the Fed can do when this bubble bursts, as it inevitably will, as surely as night follows day. It's no secret that virtually every pension fund is dead man walking, doomed by central banks' imposition of low yields on safe investments, i.e. Zero Interest Rate Policy (ZIRP). Given that both The Economist and The Wall Street Journal have covered the impossibility of pension funds achieving their expected returns, this reality cannot be a surprise to anyone in a leadership role. [link]Many unhappy returns: Pension funds and endowments are too optimistic [link]Public Pension Funds Roll Back...
  • Denver Public Schools fixing out remainder of controversial 2008 debt deal (Michael Bennet)

    04/17/2013 8:28:40 AM PDT · by george76 · 4 replies
    Denver Business Journal ^ | : Apr 6, 2013 | Heather Draper
    Denver Public Schools has quietly put the rest of its controversial variable-rate bonds with swaps on the market to sell as fixed-rate debt. Five years after issuing a 30-year, $750 million school pension bond that turned into a financial quagmire for the district, DPS is selling $519.8 million in fixed-rate, refunding certificates of participation (COPs), set to price during the week of April 15, according to an announcement Friday from Fitch Ratings. ... DPS "fixed out" — or issued debt at a fixed interest rate — half of the original $750 million in debt in 2011, and paid nearly $42...
  • Pensions may be cut to 'virtually nothing' for 407,000 people

    05/20/2016 5:05:57 PM PDT · by bkopto · 65 replies
    CNN Money ^ | 5/20/2016 | Katie Lobosco
    The Central States Pension Fund has no new plan to avoid insolvency, fund director Thomas Nyhan said this week. Without government funding, the fund will run out of money in 10 years, he said. At that time, pension benefits for about 407,000 people could be reduced to "virtually nothing," he told workers and retirees in a letter sent Friday. In a last-ditch effort, the Central States Pension Plan sought government approval to partially reduce the pensions of 115,000 retirees and the future benefits for 155,000 current workers. The proposed cuts were steep, as much as 60% for some, but it...
  • Fears About State Pension Underfunding Drive School Employees to Other Options

    05/20/2016 10:27:14 AM PDT · by MichCapCon · 3 replies
    Michigan Capitol Confidential ^ | 5/15/2016 | Jarrett Skorup
    For every dollar Michigan school districts budget to pay their employees, 36 cents goes into the state-run school retirement system. Most of this money (87 percent) goes toward catching up on decades of systematic underfunding that has left the pension system with a massive unfunded liability. The system is called the Michigan Public School Employees Retirement System (MPSERS), and it is currently underfunded by $26 billion. The potential for instability contributes to thousands of school employees choosing to skip the traditional defined benefit pension and instead take advantage of employer contributions into an optional 401(k)-style account they then own. Michigan...
  • Pension Costs Are Crowding Out Public Safety

    05/16/2016 1:34:14 PM PDT · by MichCapCon · 14 replies
    Michigan Capitol Confidential ^ | 5/15/2016 | James Hohman
    A report from the state House Fiscal Agency shows that there has been a steady decline in the number of police officers in Michigan, falling 15.4 percent from 1990 to 2015. The report does not go into why this is, but here’s one theory: Pension underfunding is crowding out government spending, including hiring decisions. Consider that the state police retirement system now costs between 57 percent and 63 percent of the Michigan State Police’s total payroll. It is not because the benefits are lavish. It is because the state is trying to pay for promises that it made in the...
  • California pension investment ticks off state engineers’ union

    05/15/2016 12:47:13 AM PDT · by Tolerance Sucks Rocks · 1 replies
    The Sacramento Bee ^ | May 10, 2016 | Jon Ortiz
    Add one more investment to the list of CalPERS’ controversial investments: a privately run state highway. The retirement fund recently purchased 10 percent of Indiana Toll Road Concession Co. The firm runs a 157-mile stretch of highway that runs across northern Indiana from Illinois to Ohio. California’s state engineers’ union says it’s a horrible investment that sinks government employees’ money into a project that, ironically, is hostile to government employees. The toll-road company is the first of what fund managers anticipate will be more investments in infrastructure and transportation projects as the $291 billion system broadens its reach into those...
  • Pension Debt Exceeds 40k Per Household

    05/13/2016 6:54:57 AM PDT · by C19fan · 53 replies
    American Interest ^ | May 12, 2016 | Staff
    According to a first-of-its kind pension-tracking website created by a team at Stanford’s Institute for Economic and Policy Research, America’s unfunded pension liabilities—the difference between the value of state pension funds and the amount owed to public sector workers—totals over $4.8 trillion, or $41,219 per household. The Stanford team arrived at number assuming a three percent rate of return—far lower than the 7.5 percent “actuarial” rate many pension funds rely on, but rarely meet. (Even if the actuarial basis were accurate, state pension funds would still owe a combined $1.04 trillion, or $8,872 per household).
  • Stanford: Public Pension Debt Jumps 84%, to $4.8 trillion

    05/11/2016 6:54:55 AM PDT · by george76 · 8 replies
    Breitbart ^ | 11 May 2016 | Chriss W. Street
    the public pension debt for the 50 states and the District of Columbia jumped 84 percent in recent years, from $2.625 trillion in 2008 to $4.833 trillion in 2014. ... The highest pension debt/household is in Alaska, with an estimated $113,137 figure; Illinois and California are in the second and third highest rankings at more than $77,000 per household.” The lowest state pension debt per household is in Tennessee at $17,761. Illinois has the lowest “market funded ratio” (value of pension assets divided by market liability), at 23.3 percent. The other 49 U.S. states and Washington, D.C. have a market...
  • Private Pensions Underfunded (82%)

    05/11/2016 7:17:03 PM PDT · by buwaya · 16 replies
    Milliman ^ | 5/11/2016 | Buwaya
    A vanity, I apologize if this is old news or if I am being pedantic. We all know about the public pensions crisis, but the PRIVATE pension problem is under the radar. It probably shouldn't be, and it is also affected by government-corporate chicanery. It seems that, because of the sluggish state of the economy and low interest rates, nearly all private pension funds, just like public ones, are in the red. There are various pension fund surveys; most show that private pension funds are on average only about 80% funded; in 2007 they were on average over 100% funded....
  • The Next Big Bailout? Treasury Rejects Proposal To Cut Pension Benefits

    05/08/2016 8:24:07 AM PDT · by Rusty0604 · 16 replies
    Zerohedge ^ | 05/07/2016 | Tyler Durden
    UPS, and roughly 270,000 retired truck drivers, construction workers, and other service workers can breathe a collective sigh of relief... for now. As we previously reported, the Central States Pension Fund had submitted a plan to Treasury that if approved would have cut member benefits, and triggered UPS to take an estimated $3.8 billion charge. As the WSJ reports, Kenneth Feinberg (who was appointed by the Treasury to review all such applications) rejected the plan presented by the CSPF. Feinberg cited a few reasons for his decision, one being that it imposed cuts in a disproportionate manner, another was that...
  • Greece braces for new austerity-induced pension cuts

    05/08/2016 4:30:16 AM PDT · by ameribbean expat · 7 replies
    DeutscheWelle ^ | May 7, 2016 | Jannis Papadimitrio
    Greece's government is set to pass controversial pension cuts on Sunday. Retirees are livid, and unions are on strike, Jannis Papadimitriou reports from Athens.
  • Treasury rejects plan to slash Teamsters pension benefits

    05/06/2016 7:34:51 PM PDT · by Olog-hai · 16 replies
    Associated Press ^ | May 6, 2016 6:01 PM EDT | Martin Crutsinger
    The Treasury Department on Friday rejected an effort by the Teamsters Central States Pension Plan to cut benefits for 270,000 retired workers starting in July. Treasury Secretary Jacob Lew said in a letter to members of Congress that while the decision blocks the pending pension cuts, it does not resolve the issue because the pension plan remains severely underfunded and is projected to become insolvent within the next 10 years. …
  • Why Some Teachers Prefer a 401(k) Over a Pension

    05/02/2016 12:32:58 PM PDT · by MichCapCon · 14 replies
    Michigan Capitol Confidential ^ | 4/28/2016 | Jarrett Skorup
    In 2012, the Michigan Legislature passed a bill that kept open the teacher pension system but began allowing school employees to choose a 401(k)-type defined contribution retirement account. Since then, around 18,000 school employees have chosen the 401(k) instead of the old pension system, according to a FOIA request. Their reasons for making the switch range from concerns about future pension cuts and underfunding to wanting more control over retirement funds. “I chose the defined contribution option for a number of reasons. One of which … [is] the pension program is underfunded and may or may not be existent when...
  • Closing Pensions for State Employees in 1990s Saved Michigan Millions Today

    04/26/2016 12:43:38 PM PDT · by MichCapCon · 2 replies
    Michigan Capitol Confidential ^ | 4/23/2016 | James Hohman
    Michigan lawmakers voted 20 years ago to close the state employee pension system to new members. A new study by Anthony Randazzo and Truong Bui of the Reason Foundation looked at Michigan’s experience to see whether this reform helped the state. They found that the state saved itself from racking up hundreds of millions more in additional unfunded liabilities. But their study also has other major lessons for Michigan as it considers further pension reforms. The state employee system currently owes its members $6.2 billion more in pension benefits than it has saved. Filling the gap would cost each household...
  • Why we must protect the retirement security of Puerto Ricans

    04/24/2016 4:53:14 AM PDT · by C19fan · 39 replies
    The Hill ^ | April 22, 2016 | Bailey Childers
    Among the many complex issues in Puerto Rico’s dire financial situation—the Island owes a staggering $73 billion in debt—is how to treat the pension obligations owed to the more than 100,000 retirees and 125,000 active members in the Puerto Rico Government Employee’s Retirement System (PRGERS). Hedge fund managers who gambled on Puerto Rico, paying 30 and 40 cents on the dollar in hopes for full dollar value repayment plus interest, will say Puerto Rico should pay them first. Close more schools if you have to (Puerto Rico has already closed 100), layoff more public sector workers if need be (30,000...
  • One of the nation’s largest pension funds could soon cut benefits for retirees

    04/21/2016 8:26:05 AM PDT · by pabianice · 26 replies
    MSN ^ | 4/21/16 | Marte
    More than a quarter of a million truckers, retirees and their families could soon see their pension benefits severely cut — even though their pension fund is still years away from running out of money. Within the next few weeks, the Treasury Department is expected to announce a crucial decision on whether it will approve reductions to one of the country’s largest multi-employer pension plans. The potential cuts are possible under legislation passed by Congress in 2014 that for the first time allowed financially distressed multi-employer plans to reduce benefits for retirees if it would improve the solvency of the...
  • U.S. Pension Shortfall: $3.4 Trillion

    04/12/2016 7:48:45 AM PDT · by C19fan · 29 replies
    American Interest ^ | April 11, 2016 | Staff
    Every few months, another think tank or financial institution releases a new report sounding the alarm about the fiscal crisis facing state and local pension funds, and the findings are reliably dismissed by public sector unions and their political backers. But the latest research, from researchers at Stanford’s business school, is hard to ignore. The Financial Times reports:
  • US Faces ‘Disastrous’ $3.4 Trillion Pension Funding Hole

    04/11/2016 7:28:43 PM PDT · by Lorianne · 27 replies
    Financial Times ^ | 10 April 2016 | Attica Mooney
    The US public pension system has developed a $3.4tn funding hole that will pile pressure on cities and states to cut spending or raise taxes to avoid Detroit-style bankruptcies. According to academic research shared exclusively with FTfm, the collective funding shortfall of US public pension funds is three times larger than official figures showed, and is getting bigger. Devin Nunes, a US Republican congressman, said: “It has been clear for years that many cities and states are critically underfunding their pension programmes and hiding the fiscal holes with accounting tricks.” Mr Nunes, who put forward a bill to the House...
  • CalPERS learns social responsibility can be a drag

    04/08/2016 7:09:44 AM PDT · by C19fan · 2 replies
    Reuters ^ | April 5, 2016 | Kevin Allison
    CalPERS is learning that social responsibility can be a drag. The $290 billion California pension manager may reinvest in tobacco stocks after a report found that exiting the sector cost it $3 billion of potential investment gains over 15 years. There’s more to the idea than higher returns, though. Engaging financially with controversial firms can be a better way to effect change.