National Retirement Security Week
Source: NPPC

This week is National Retirement Security Week! Proclaimed by an official declaration from Congress, each year supporters of 401(k)-style defined contribution plans use this week to promote their products. We’ve decided to take back retirement security from the salesmen of the financial industry and focus on the most reliable source of retirement security: defined benefit pensions. Today’s blog post will discuss the true state of retirement security in the United States. On Wednesday, we’ll highlight how defined contribution plans contribute to the retirement savings crisis. On Friday, we’ll wrap up by focusing on the strengths of defined benefit pensions.
The retirement security landscape looks rather bleak at the moment. According to a recent report from the National Institute on Retirement Security (NIRS), more than 100 million working-age Americans do not own any type of retirement savings. That means nothing in an employer-provided 401(k) plan, an Individual Retirement Account (IRA), or a pension plan. That is 57 percent of adults who are not preparing for retirement at a time when financial experts recommend saving more than ever.
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The Lesson For Millennials From Boomers’ Stark Retirement Choices
Source: Forbes

Baby Boomers nearing retirement face a stark reality when it comes to leaving the workforce. Almost 20 million working Americans between ages 55 and 64 have no money in 401(k) retirement accounts and do not have a pension. Will they be able to pay their bills and maintain their standard of living on just Social Security?

These near-retirees face little time to reap the benefit of compound interest to help grow their nest eggs at a time when interest rates are at an all-time low. With these factors working against them, financial advisors often suggest that pre-retirees keep working and avoid drawing on Social Security until their full retirement age or later.

Last year, the full retirement age started to move up, making retiring early more costly. For those born in 1956, the age at which Americans can receive full Social Security benefits is age 66 and four months. This full retirement age will continue to increase until 2022 when it reaches age 67.
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Pensions: Fire Fighters Perspective
Source: WTVP

The cost of funding fire fighter pensions in municipalities is growing faster than inflation. The president of the Illinois Fire Fighters Association, the Peoria fire fighters union president and an actuary discuss the funding issue for the 297 fire fighter pensions in Illinois. They offer potential changes that could relieve some of the financial pressure on municipal governments.
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Illinois Pension Actuary Defrocked. Finally.

The American Academy of Actuaries last week suspended Timothy W. Sharpe from membership for a period of two years for materially failing to comply with parts of its Code of Professional Conduct in connection with valuations he performed for several municipal police and fire pension plans in Illinois. The Notice is linked here.

Suspension is important because the Illinois Pension Code requires certain pension services to be performed by an “enrolled actuary,” which means membership in either the Academy or the Society of Actuaries (40 ILCS 5/4-118). Not being a member of the Society, Sharpe’s services in Illinois now presumably will end. He had continued to work for some Illinois pensions prior to the suspension while complaints pended against him.

The suspension is rare. Only 21 actuaries have been suspended or expelled from the Academy in the last 43 years.
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Welcome Godfrey Fire Protection District to IPPFA
Source: IPPFA

Welcome Godfrey Fire Protection District to IPPFA
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Financial Fraud among Older Americans: Evidence and Implications
Source: Pension Research Council

The consequences of poor financial capability at older ages are serious and include making mistakes with credit, spending retirement assets too quickly, and being defrauded by financial predators. Because older persons are at or past the peak of their wealth accumulation, they are often the targets of fraud. Our project analyzes a module we developed and fielded in the 2016. Health and Retirement Study (HRS). Using this dataset, we evaluate the incidence and risk factors for investment fraud, prize/lottery scams, and account misuse, using regression analysis. Relatively few HRS respondents mentioned any single form of fraud over the prior five years, but nearly 5% reported at least one form of investment fraud, 4% recounted prize/lottery fraud, and 30% indicated that others had used/attempted to use their accounts without permission. There were few risk factors consistently associated with such victimization in the older population. Fraud is a complex phenomenon and no single factor uniquely predicts victimization. The incidence of fraud could be reduced by educating consumers about various types of fraud and by increasing awareness among financial service professionals.
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Pension Funds and the Financial Impact of Environmental, Social, and Governance Issues
Source: IPPFA

Please Join IPPFA for a Breakfast Seminar at the Union League of Chicago on September 7, 2018 starting at 8:00 AM.

Pension Funds and the Financial Impact of Environmental, Social, and Governance Issues.

Corporate financial performance can be impacted by how well companies manage material environmental, social, and governance (ESG) risks and opportunities. Issues such as human capital, resource use efficiency, and data security can affect a company’s competitive advantage and long-term financial success. Investors are therefore incorporating ESG analyses into their investment process in order to make better, more well-informed investment decisions with the aim of improving portfolio risk-adjusted returns.

This panel conversation will feature Mike Frerichs, Illinois State Treasurer, discussing how he is working to incorporate sustainability factors into the investment decision-making process in order to fulfill the Office’s fiduciary duty and maximize returns. The panel will also feature Maureen Ehrenberg, President of Global Integrated Facilities Management at commercial real estate firm JLL, sharing the ESG initiatives her company is focusing on in order to improve financial performance and thereby enhance shareholder value for clients as well as the company.

Union League Club of Chicago
Tudor Room 700
65 West Jackson Boulevard, Chicago
Friday, September 7, 2018
8:00 AM Registration & Breakfast Buffet
8:30 AM Panel Presentation
9:15 AM Q & A
To Register:
with your name, company and contact information.
$25 registration fee applies.
Please note – the Union League Club has a strict dress code policy.
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Harvey, pension funds reach deal on dividing up embargoed state money, end court fight over pension funding
Source: The Record Network

In a deal that could set a precedent for other financially struggling municipalities to follow, the city of Harvey has reached a deal with its police and firefighter pension funds to end a court fight over how much of the money Harvey gets from the state of Illinois the city should be allowed to spend on current day-to-day operations, rather than police and fire department retirees’ pensions.

In a deal that could set a precedent for other financially struggling municipalities to follow,  the city of Harvey has reached a deal with its police and firefighter pension funds to end a court fight over how much of the money Harvey gets from the state of Illinois the city should be allowed to spend on current day-to-day operations, rather than police and fire department retirees’ pensions.

Full Article

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2018 MidAmerican Charity Golf Outing
Source: IPPFA

IPPFA 2018 MidAmerican Conference Golf Outing

 Join us for a new and exciting IPPFA MIDAmerican Conference Golf Outing.The Beautiful Grand Geneva HIGHLANDS Golf Course
     We are really shaking things up this year with new and exciting on course games, big prizes and more fun for all!AT THIS GOLF OUTING……

THREE people will win 3 days/2 nights for two in their choice of Las Vegas or Reno Nevada. Anywhere you would like to stay!

Exciting DRONE GOLF BALL DROP & Golf Ball Launchers that you will be able to shoot your ball hundreds of yards…. “The ONLY way to play golf“. 

For over 30 years the IPPFA has offered Public Pension Trustees the best and latest in trustee training. With the recent far reaching changes in pension law and with the difficult challenges yet to come, the IPPFA strives to prepare pension trustees for the future. Please join us for Training in Ethics, Investment Procedures, Fiduciary Responsibilities, Legal and Legislative Updates, and much, much more and all with nationally renowned speakers.

Register NOW

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The Wrong Way to Preserve Public Pensions
Source: NPPC

Last week we wrote about Minnesota and the collaborative process that led to the unanimous passage of pension legislation that will shore up the pension systems there. Minnesota showed the right way to do things: bring everyone to the table and negotiate in good faith. Other states have not followed this same path when dealing with public pensions. Kentucky also passed a major piece of pension legislation this year, but with a less positive outcome than in Minnesota.

More than a year ago, Kentucky Governor Matt Bevin began saying he would call a special legislative session to address public pensions and tax reform. He quickly dropped tax reform, despite Kentucky’s notoriously porous tax code, and said the special session would focus only on public pensions. Despite continuing to promise a special session throughout the fall, he never called one. Eventually, it became too late for a special session and the 2018 regular legislative session began in Kentucky.

Full Article

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