Welcome Chester Police Pension Fund to IPPFA.
Welcome Chester Police Pension Fund to IPPFA.
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.
Late last month, Congress voted to overturn an Obama-era rule that cleared the way for cities to create retirement programs for private-sector workers that didn’t have one through their employer. But a similar resolution targeting the rule as it applies to states is stuck.
For the past three weeks, that resolution has lingered in uncertainty as the Senate stalls on taking an up or down vote. Many believe that signals an opportunity. “Based on the conversations we’ve had with staff and colleagues working on this,” says Cristina Martin Firvida of AARP, which supports the Obama-era regulation, “I think there are a number of senators who still have a lot of questions about the state rule.”
The Department of Labor’s Veterans’ Employment and Training Service (VETS) has information for veterans, National Guard, or reservists who may be activated for military service. National Guard and reserve members called to active duty and their civilian employers have certain rights and responsibilities under the Uniformed Services Employment and Reemployment Rights Act (USERRA). VETS has developed a fact sheet and an interactive computer program, the USERRA Advisor, which address the rights and responsibilities of individuals and their employers under the law. These tools and other USERRA information can be found on the VETS Website.
The ABLE National Resource Center (ANRC) is a collaborative that brings together the investment, support and resources of some of the country’s largest and most influential national disability organizations in an effort to accelerate the design and availability of ABLE accounts to meet the needs of individuals with disabilities and their families. Founded and managed by National Disability Institute (NDI), the ANRC’s goal is to provide consistent, reliable information concerning the benefits of an ABLE account. In addition, the ANRC aims to educate individuals with disabilities and their families, state government and legislatures, financial service companies and financial planners and attorneys – who focus on trust and estate planning – about ABLE’s potential positive impact on the lives of millions of Americans with disabilities.
Most states that levy a personal income tax allow people who receive retirement income to exclude part of it from their taxable income. The table that accompanies this introduction provides state-by-state detail. “Retirement income” means income from federal, state and local governments’ retirement plans, Social Security, Railroad Retirement, private pension plans, and deferred compensation plans in the public and private sectors. Retirement income excludes income from current employment, rents and dividends, disability payments and Supplemental Security Income (SSI). This report does not address personal exemptions or deductions that are available to every filer over some specified age, like the federal provision for a larger standard deduction for people who are 65 years old or older.
State policies on retirement income exclusions vary greatly, but have one or both of two purposes: to protect the income of taxpayers who are no longer in the workforce, and to serve as an economic development tool by attracting retired people to, or retaining them in, a state. Such tax provisions seem to have originated years ago as a means of assisting retired public employees who received relatively small pensions. Over the years, many states have made age, not former employment in the public sector, the criterion for retirement income exclusions. The exclusions discussed below generally include an age restriction, which has been omitted from this discussion for the sake of simplicity; however, the age eligibility requirements are specified in the table that follows.
Detroit is joining Oklahoma and Kentucky in establishing a pension reserve fund. The fund essentially acts like a savings account; it’s a place for governments to set aside money to help with increasing pension costs. In Detroit’s case, the fund will help the city plan for 2024, when pension costs are expected to skyrocket from $20 million annually to $200 million a year.
Thanks to Detroit’s exit plan from bankruptcy in 2014, the city isn’t paying the full cost of its pensions right now. A charitable foundation and the city’s water and sewer system are shouldering much of those costs until 2023.
State net deficit climbs to $126.7B, spending on health & social service programs plummets.
SPRINGFIELD – With no relief in sight, Illinois’ finances deteriorated at an alarming rate in fiscal year 2016 as net deficit totals spiked to a staggering $126.7 billion, according to an annual report released on Tuesday by the Office of Illinois State Comptroller Susana A. Mendoza.
The State’s Comprehensive Annual Financial Report (CAFR) for the fiscal year ending June 30, 2016, paints a worsening outlook for the State’s financial future on this unsustainable path.
Welcome Shepherd Finkelman Miller & Shah LLP to IPPFA.
Shepherd, Finkelman, Miller & Shah, LLP is an established law firm with an international reach and reputation. Founded by alumni of large firms, SFMS began as a litigation boutique over ten years ago and has grown into a full-service firm with offices located strategically throughout the United States and strong international affiliations.
SFMS attributes its significant growth and consistent success to a singular focus on identifying and meeting our clients’ needs and objectives. Our client base, like our practice, is diverse and varied. Those clients include small and midsize business entities, multinational corporations, institutional investors, broker-dealers, benefit funds and plan administrators, financial institutions, governmental entities, labor unions and individuals, including corporate executives, employees, consumers, retirees and whistleblowers. Our clients consistently tell us that our work compares quite favorably to that of larger firms in terms of quality, creativity, cost effectiveness and results.
Pensions, in the broadest sense of the term, have existed since ancient Rome. Soldiers in the
Roman army could earn pensions through their military service. The value of these pensions to Roman
soldiers helped to maintain the power of emperors such as Augustus. Pensions for military service have
continued to exist in one form or another in the two thousand years since.
Public pensions for teachers, firefighters, police officers, and other civilian public servants in the United
States are a more recent development. In fact, public pensions as we know them are just over one
hundred years old. Governments began offering pensions because they are the most effective and costefficient
way for working families to prepare for retirement. Unfortunately, many people today have
forgotten the true value of pensions and why they are so important. This report will explore the history
of defined benefit public pensions in the United States, why they were implemented in the first place,
and why they continue to remain today.