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IPPFA Regional Seminar – Jumer’s Hotel/Casino Rock Island – Registration Now Open
Source: IPPFA

Come join the IPPFA for a regional seminar being held at Jumer’s Hotel/Casino Rock Island, Illinois.

For over 30 years, the IPPFA has offered public pension trustees the best and latest in trustee training education, striving to offer the best available training. Please join us for sessions in ethics, investment procedures, fiduciary responsibilities, and legal and legislative updates, all presented by nationally renowned speakers.

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Welcome Country Club Hills Fire Pension Fund to IPPFA
Source: IPPFA

Welcome Country Club Hills Fire Pension Fund to IPPFA.

 

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IPPFA Regional Seminar – NIU Hoffman Estates Campus – Registration Now Open
Source: IPPFA

Come join the IPPFA for a regional seminar being held at NIU Campus in Hoffman Estates, Illinois.

For over 30 years, the IPPFA has offered public pension trustees the best and latest in trustee training education, striving to offer the best available training. Please join us for sessions in ethics, investment procedures, fiduciary responsibilities, and legal and legislative updates, all presented by nationally renowned speakers.

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Certified Trustee Program 19-3 – Registration Now Open
Source: IPPFA

Certified Trustee Program 19-3 is being held at NIU Campus Hoffman Estates (Module 1 and Module 3) and NIU Campus Naperville (Module 2 and Module 4).

For over 30 years, the IPPFA has offered public pension trustees the best and latest in trustee training education, striving to offer the best available training. Please join us for sessions in ethics, investment procedures, fiduciary responsibilities, and legal and legislative updates, all presented by nationally renowned speakers.

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Welcome Oregon Fire Pension Fund to IPPFA
Source: IPPFA

Welcome Oregon Fire Pension Fund to IPPFA.

 

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2019 IPPFA Illinois Pension Conference – Registration Now Open
Source: IPPFA

Come join the IPPFA for its 2019 IPPFA Illinois Pension Conference, held April 30st through May 3th, 2019 at the Embassy Suites by Hilton, East Peoria, IL (the subject matter of this conference meets or exceeds state mandated requirements for trustee education; CEU’s are issued through Northern Illinois University).

For over 30 years, the IPPFA has offered public pension trustees the best and latest in trustee training education, striving to offer the best available training. Please join us for sessions in ethics, investment procedures, fiduciary responsibilities, and legal and legislative updates, all presented by nationally renowned speakers.

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How Does Delayed Retirement Affect Mortality and Health?
Source: Center for Retirement Research

Older Americans have been retiring later for a number of reasons, including jobs that are becoming less physically demanding, the shift from defined benefit to defined contribution pensions, and changes in Social Security’s incentives. What are the implications of working longer for workers’ mortality and health? Answering this question is complicated, because work and health are jointly determined – healthy people with lower mortality tend to work longer. Previous studies looking at the causal effect of work on mortality and health have found mixed results and have tended to focus on the effects of early retirement, not delayed retirement. A simple assumption would be that the relationship between them is symmetric. But it is unclear that that assumption is correct – after all, people who decide to keep working are likely a healthier group than those who stop early. This paper uses administrative data from the Netherlands and exploits policy variation designed to delay retirement to explore the links between work and health outcomes.

The paper found that:

  • Working longer is associated with lower mortality, depression, and diabetes risk for both men and women in ordinary linear regression models.
  • In an instrumental variable approach that takes into account the joint relationship between work and mortality, delayed retirement reduces the 5-year mortality rate for men ages 62-65 by 2.4 percentage points, or a 32-percent reduction relative to non-workers.
  • However, the same analysis finds no significant relationship between delayed retirement and the health conditions studied.
  • The effect on male life expectancy depends on how permanent the effect is.  A 32-percent reduction in mortality increases age-60 life expectancy by about three months if the effect applies only to the ages studied, but longer if the effect is permanent.
  • For women, the weakness of the instrument variable results in insignificant results.

The policy implications of the findings are:

  • Policies that delay retirement may increase longevity, especially for men, but have no detectable effect on depression or diabetes during one’s 60s.
  • As they consider policies that could lengthen careers, policymakers could take into account the possibility that lives may also be extended, and consider the potential effects on the benefits paid out.
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New studies show simple way to improve local pension funds and warn of consolidation pitfalls
Source: IPPFA

CHICAGO – Two new studies focusing on police and fire pension systems in Illinois have shown that much is to be gained by easing a key pension system restriction. The studies, performed for the Illinois Public Pension Fund Association (IPPFA), also show that the consolidation of local funds into one large state entity is risky and offers no real benefit to taxpayers.

“These studies tell us that when you ease a single arbitrary restriction on local pension systems, you get the best bang for the buck for taxpayers and retired police and firefighters,” said IPPFA President James McNamee. “They also demonstrate that bigger isn’t always better, and that consolidating local pension funds is risky, may not generate the expected cost savings, and may harm local economies.”

The studies, performed by Anderson Economic Group, LLC of Chicago, examined what would happen if the Illinois General Assembly voted to ease the investment restrictions on local pension funds with less than $10 million in assets. The studies showed that gains for these approximately 228 smallest funds in Illinois would average as much as 1.8 percentage points per year if the restrictions were eased, and this action would increase average annual pension fund returns statewide by at least $418 million over 20 years.

“Higher returns means it won’t cost taxpayers extra to keep these pension funds healthy,” McNamee said. “Expanded investment authority is the least cumbersome and most effective way to ease the local contribution responsibility.”

The easing of investment restrictions will result in near-certain higher returns even when taking into account the higher volatility of riskier assets, the studies said.

The studies also concluded that any move to consolidate all 641 downstate Illinois police and firefighter pension funds into one massive state pension system would be expensive and fraught with risk. Such a consolidation would require that almost all assets from each local fund be liquidated and then re-invested in the larger fund. This move could generate a one-time cost of up to $155 million in commissions, taxes, fees and potential market losses, which would increase the pension funds’ unfunded liability by that amount as well. It would take many years to recoup that cost in the minor administrative savings realized by consolidation.

Consolidation poses a particularly high risk if the transfer occurs during a period of stock market growth and the local pension funds miss out on the resulting gains from their existing investments, the studies found. In addition, economies may suffer when the local banks and asset managers who handle individual pension funds are set aside in favor of larger, out-of-state investment firms that would likely handle the consolidated pension fund.

“There’s also the issue of local control,” McNamee said. “A consolidated fund means community residents have much less input on how their tax dollars are spent.”

Retirement benefits are provided to police officers and firefighters through local pension funds in Illinois. The funds are regulated by state law, but they are managed by local boards of trustees. There are 643 pension funds for police officers and firefighters in Illinois, 641 of them downstate and two in Chicago.

The IPPFA was founded in 1985 as a not-for-profit organization whose mandate was to educate public pension fund trustees. In 2009 the IPPFA became the primary education provider for public pension fund trustees in the state of Illinois, and its members manage more than $18 billion in pension assets.

Anderson Report on Easing Investment Restrictions

Anderson Report on Impact of Consolidation

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Certified Trustee Program 19-2 – Registration Now Open
Source: IPPFA

Certified Trustee Program 19-2 is being held at Embassy Suites Conference Center, East Peoria, Illinois starting April 29, 2019.

For over 30 years, the IPPFA has offered public pension trustees the best and latest in trustee training education, striving to offer the best available training. Please join us for sessions in ethics, investment procedures, fiduciary responsibilities, and legal and legislative updates, all presented by nationally renowned speakers.

Register NOW

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