News

Attorney Aaron Maduff on the Constitutionality of the Legislature’s New Effort to Control Pension Costs
Source: Illinois Channel

Attorney Aaron Maduff on the Constitutionality of the Legislature’s New Effort to Control Pension Costs.

From Springfield:  We talk with attorney Aaron Maduff, one of the lawyers who argued before the Illinois Supreme Court, when the Court ruled the legislature’s effort to diminish pensions was unconstitutional.

Now as the Illinois legislature attempts a new approach to control pension costs, we hear Mr Maduff’s views of whether this effort is constitutional, and if not… what if anything can be done to control the state’s rising pension obligations.

Video

 


 

Read more

Retiree Health Care Benefits for State Employees in Fiscal Year 2015
Source: NASRA

Other Postemployment Benefits (OPEB) is an umbrella term that characterizes retirement benefits, other than pensions, that are offered to employees of state agencies and participating political subdivisions who meet designated age and/or service related eligibility criteria. The most significant costs associated with OPEB benefits are for employer-subsidized health care for retired employees.

Nearly every state and most local governments provide access to health benefits to retired employees, and, in most cases, this coverage includes spouses and dependents. This employer-subsidized coverage typically serves as the primary health coverage until the retiree reaches age 65, when it becomes secondary to Medicare. The level of benefits, and their associated costs, depends on an assortment of factors including eligibility requirements, benefit type, and the plan’s actuarial assumptions and methods.

In 2015, approximately 80 percent of state government units offered health insurance to retirees under age 65 and approximately 70 percent offered the benefit to those over age 65. These percentages are essentially the same for large local governments (over 10,000 employees), with smaller local governments less likely to offer insurance for either

 Full Article


 

Read more

Make the call to stop pension cuts
Source: We Are One-Illinois

Call your state representative TODAY to urge a NO vote on SB 16, HB 4027, HB 4045 or any other bill that cuts the pensions of public employees. Dial 888-412-6570 or Click to Call.

In recent years, the Illinois Supreme Court has twice found legislation reducing the pension benefits of active and retired public employees to be unconstitutional. So why does Governor Rauner keep pushing to cut public employee pensions—and why are some legislators going along with him?

It’s important to note that no legislation before the General Assembly would cut the pension benefits of current retirees. There is widespread acceptance that the court has flatly rejected any reductions in the pensions of those who have already retired. And it’s important to remember that, despite strong opposition from the unions of We Are One Illinois, the General Assembly acted in 2010 to significantly reduce the pension benefits of all those hired after January 1, 2011 (Tier 2 pension participants). The courts have consistently ruled that only the benefits of current employees and retirees are constitutionally protected. Benefit reductions—or even elimination—are legal for any employee not yet hired at the time changes to the pension code are made.

 Full Article


 

Read more

Why Employers Should Care About the Cost of Delayed Retirements
Source: Prudential Financial, Inc.

Having employees able to retire “on time” is a win/win scenario for both employees and employers. In a perfect world, all employees would be able to begin enjoying their retirement years when they wish, and employers would, therefore, be better able to manage workforce resources and costs. However, in today’s society, many employees are expected to delay their retirements beyond their desired retirement ages due to financial concerns, such as having inadequate savings to sustain them throughout their retirement. To quantify the impact of delayed retirements on employers’ costs, Prudential conducted research1 using workforce composition and cost assumptions based on national averages for private sector workers. The research indicates that a one-year increase in average retirement age results in:

  1. An incremental cost of over $50,000 for an individual whose retirement is delayed.2 This represents the cost differential between the retiring employee and a newly hired employee.
  2. Incremental annual workforce costs of about 1.0%–1.5% for an entire workforce.3 For an employer with 3,000 employees and workforce costs of $200 million, a one-year delay in retirement age may cost about $2-3 million.

To put this in perspective, we compared the cost of delayed retirement to other types of workforce costs,4 and found that, on an aggregate national basis, a delay in retirement may

 Full Article


 

Read more

“How Will More Retirees Affect Investment Returns?”
Source: Center for Retirement Research

The brief’s key findings are:

  • Economic theory suggests that retirees draw down the assets they accumulated in their work lives, so a higher retiree-worker ratio reduces the supply of saving, thereby increasing investment returns.
  • However, research generally shows that retirees draw down their wealth much more slowly than expected, particularly the wealthy who hold most of the assets.
  • Therefore, as retirees retain much of their wealth, a higher retiree-worker ratio leads to a greater supply of savings and a decrease in investment returns.
  • To the extent that investment returns decrease, workers will need to save more to maintain their standard of living in retirement.

 Full Article


 

Read more

Wages
Source: United States Department of Labor

The Department of Labor enforces the Fair Labor Standards Act (FLSA), which sets basic minimum wage and overtime pay standards. These standards are enforced by the Department’s Wage and Hour Division.

Minimum Wage

 Full Article


 

Read more

2017 IPPFA Illinois Pension Conference
Source: IPPFA

Another fine day at the 2017 IPPFA Illinois Pension Conference.

 

 

Read more

Special Old Style Cans Raise Money For Firefighter Charities
Source: dna info

 Old Style has redesigned its packaging to honor firefighters and will donate 20 cents from every commemorative case sold to four related charities.

The cans and cases designed with a firefighter crest, axe and other images of classic firefighting techniques will debut next month. Old Style has pledged to donate $20,000-$35,000 to a group of Midwest charities.

Those benefiting from the effort include: the Ende, Menzer, Walsh and Quinn Retirees’, Widows’ and Children’s Assistance Fund, the IPPFA Remembrance & Survivor’s Fund, the Professional Fire Fighters of Wisconsin Charitable Foundation and the Professional Firefighters’ Union of Indiana.

 Full Article


 

Read more

Welcome Chester Police Pension Fund to IPPFA
Source: IPPFA

Welcome Chester Police Pension Fund to IPPFA.

 

Read more

Illinois State Retirement System financial condition as of June 30,2016
Source: CGFA

This report examines the financial status of the five State-funded retirement systems.

The following is a summary of the findings:

• Public Act 88-0593 requires the State to make contributions to the State retirement systems such that the total assets of the systems will equal 90% of their total actuarial liabilities by Fiscal Year 2045. The contributions are required to be made at a level percent of payroll in Fiscal Years 2011 through 2045, following a phase-in period that began in Fiscal Year 1996.

 

• From FY 2002 through FY 2016, the combined unfunded liabilities of the systems increased by $94.8 billion based upon the market value of assets. The main factors for this increase in unfunded liabilities were actuarially insufficient employer contributions, changes in actuarial assumptions and lower-than-assumed investment returns over 5 years, along with other miscellaneous actuarial factors.

• The discussion of the financial condition of the State retirement systems centers on the funded ratio, or net assets divided by accrued liabilities. A system with a 100% funded ratio is fully funded because its assets are sufficient to pay all benefits earned by employees. Based upon the market value of assets, the funded ratio of the State retirement systems combined was 37.6% as of June 30, 2016.

• Projections of the future financial condition of the State retirement systems provide valuable information on the effect that past funding has had on the retirement systems’ financial position. The funding projections shown in the appendices A-J of this report were prepared by the systems’ actuaries and by CGFA’s actuary based on the June 30, 2016 actuarial valuations.

• If the State continues funding according to Public Act 88-0593, the projected accrued liabilities of the State retirement systems will increase from $214.9 billion at the end of FY 2017 to $328.7 billion at the end of FY 2045. At the same time, the projected actuarial value of assets is projected to increase from $85.4 billion to $295.8 billion. Consequently, the projected unfunded liabilities are projected to decrease from $129.5 billion at the end of FY 2017 to $32.9 billion at the end of FY 2045, and the projected funded ratio is expected to increase from 39.7% in FY 2017 to 90.0% by the end of FY 2045. All of the projected figures in this paragraph come from the various systems’ actuaries, and are predicated upon the State making the necessary contribution as required by law.

• Each of the 5 State retirement systems provided a certification of the required State contribution for FY 2018. These certification letters are displayed in the appendices Y-HH.

 Full Article


 

Read more
Top