Welcome Elk Grove Village Fire Pension Fund to IPPFA.
Welcome Elk Grove Village Fire Pension Fund to IPPFA.
Some of the workers and retirees around the country who count on having a government pension surely get nervous when they see headlines about the most troubled state and local plans – in places like Illinois, New Jersey, Connecticut, Chicago, and Detroit.
A broader perspective on retirement benefits, however, shows that the results are more mixed. A study by the Center for Retirement Research, which sponsors this blog, estimated long-term costs for pensions, retiree health benefits, and general debt service as a share of revenues for the 50 states, 178 counties, and 173 cities.
The findings are summarized below:
Gov. Bruce Rauner used his third budget speech Wednesday to break his silence on the Senate’s “grand bargain” and say he is against raising sales taxes on food and medicine and wants a permanent property tax freeze to compensate for a permanent income tax increase.
But what else is in the budget plan? Here’s a quick look at 12 facts.
The brief’s key findings are:
CHICAGO A bipartisan deal aimed at ending Illinois’ long-running budget impasse stumbled on Wednesday when a key pension measure failed to pass in the state Senate.
Following the passage of three other bills tied together in a legislative package, a measure to ease Illinois’ $130 billion unfunded pension liability was rejected in a 29-18 vote, with 10 members voting “present.”
Even though Senate Republican Leader Christine Radogno crafted the package with Democratic Senate President John Cullerton, she still urged her members not to vote in the affirmative because disagreements remained on some of the 12 bills, particularly on school funding and workers’ compensation.
Pay off debt, or save for retirement?
Never has that quandary been more acute than it is right now for the younger members of today’s workforce. Millennials are confronting often-crushing debt from student loans — more onerous than perhaps any other generation has faced — and trying to save for their eventual golden years.
Depending on the level of education, young professionals could be saddled with student loans totaling anywhere from $100,000 to as high as $400,000 for doctors and attorneys, financial planners say.
“The level of student debt this generation is shouldering is unprecedented,” said Jennifer Putney, vice president of participant engagement at Prudential Financial (PRU). “It’s huge.”
Still, those starting to weave their way through their careers need to try to figure a way to set aside money for retirement. With concerns mounting that Social Security may not survive the latter half of this century, it’s imperative that the nation’s largest demographic somehow make provisions for life after those careers are over.
A new report from the American Legislative Exchange Council (ALEC), released December 14, 2016, charges that public pension funds are intentionally making “inferior investment decisions” in order to “advance political agendas” of many pension plan officials and lawmakers. Instead of managing pension fund investments for the exclusive purpose of providing retirement benefits to government employees, ALEC charges that many state and local government pension fund assets are being invested in “a misguided attempt to boost their local economies, provide kickbacks to their political supporters, reward industries they like, punish those they don’t and bully corporations into silence and behaving as they see fit.”
ALEC is a nonprofit organization of conservative state legislators and private sector representatives that drafts and shares model state-level legislation for distribution among state governments. It has been described by The Guardian as “a dating agency for Republican state legislators and big corporations, bringing them together to frame rightwing legislative agendas in the form of ‘model bills.’” According to The New York Times, “special interests effectively turn ALEC’s lawmaker members into stealth lobbyists, providing them with talking points, signaling how they should vote, and collaborating on bills affecting hundreds of issues like school vouchers and tobacco taxes.” And Bloomberg Businessweek has described the organization as a “bill laundry” that “offers companies substantial benefits that seem to have little to do with ideology.”
The first in a six-part series on the state of pensions in Michigan
– At just 61.6 percent funded, Michigan ranks 39th nationally for the health of its public pension system, according to a report by the Wall Street Journal
MARQUETTE — A perfect storm has converged around public pension plans, putting municipalities, schools, administrators and legislators in a bind over how to rebuild and fund benefits sustainably into the future.
With costs rising to meet the growing liability, public entities are facing difficult decisions.
“You start playing this game of, well, what’s more important — should we pave this road or pay this extra retirement contribution?” said Marquette City CFO Gary Simpson.
Unfunded accrued pension liability is the difference between the total amount due to both retirees and current employees upon retirement, and the actual amount of money the system has on hand to make those payments.
Today is Groundhog Day. Everyone’s favorite groundhog- Punxsutawney Phil- will stick his head out of the ground and look for his shadow. Legend has it that if Phil sees his shadow, we’ll have six more weeks of winter. Many of you may also remember a film called Groundhog Day, which stars Bill Murray as a man who repeats February 2 over and over and over again. If you’ve been keeping up with pension news and policy, you may feel a lot like Bill Murray. Every year, we see the same attacks on pensions repeated over and over and over again.
Last year in Lincoln, Nebraska, Chuck Reed, the president of the anti-pension Retirement Security Initiative, testified before the Pension Review Committee and encouraged them to switch from a defined benefit pension to a 401(k)-style plan. Lincoln rejected this idea. So this year, John Arnold is funnelling money through the Retirement Security Initiative to hire a $10,000 per month lobbyist to persuade the Nebraska state legislature to force Omaha and Lincoln to abandon their pensions for firefighters and police officers. Lawmakers in Lincoln must feel like they’re reliving 2016 all over again.
Houston owes its police, fire, and city workers about $7.8 billion, and it doesn’t exactly have the cash on hand. Their hard-fought solution could serve as a model for the rest of Texas, and the nation.
When Houston Mayor Sylvester Turner took office last year, he inherited a sweeping pension crisis. The city had an unfunded liability of $5.6 billion, a figure representing Houston’s obligations to its fire, police, and municipal pension systems.
Then it got worse: After he took office and got a closer look at the books, Turner saw the revised figure—$7.8 billion.
Pensions are the storm clouds on the horizon that threaten to wash out the so-called Texas Miracle, the wave of new jobs that kept the Lone Star State afloat through the Great Recession. Taken together, the four largest cities in Texas—Houston, Dallas, Austin, and San Antonio—owe more than $22 billion in pension shortfalls. Dallas and Houston rank second and fourth, respectively, on the list of cities nationwide with the largest unfunded pension liabilities, per a ranking by Moody’s. (At number one? Chicago.)