News

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.

 Full Article

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.

 Full Article

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.

 Full Article

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.

 Full Article

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.

 Full Article

Welcome AndCo Consulting to IPPFA.

AndCo Consulting is an independent, SEC registered institutional investment consulting firm. We serve as a fiduciary to each of our clients, without exception or caveat, while assisting and guiding them in making important investment and plan design decisions.

Welcome Crystal Lake Fire Pension Fund to IPPFA.

Pensions might look like a pot of gold to politicians right now, but they should go follow another rainbow if they want extra funds to pay state bills. Public pension funds need to stay right where they are.

Public pensions are in a good place. A recent study from NCPERS found that pension funding levels went up again in 2016, to an average of 76 percent. The Center for Retirement Research at Boston College noted similar trends and expects average funding levels to approach 77-81 percent by 2018. Pensions have weathered the 2008 economic crisis, as they’re designed to do. But healthy pension systems now face another challenge with local governments.

 Full Article

Illinois lawmakers are again considering proposals that would allow some participants in state government’s pension systems to take a lump-sum payout in lieu of regular annuity payments.

Buyout plans are part of pension discussions in both the House and Senate, all of which are in preliminary stages. But Rep. Robert Martwick, D-Chicago, chairman of the House Personnel and Pensions Committee, thinks the ideas have merit.

“I’m a fan of the buyout,” Martwick said of various House proposals. “I think those are truly what would be constitutional because they amount to a true free consideration.”

In other words, he said, participation in them is voluntary and there is a “tangible benefit” for those who partake. […]

Under Batinick’s proposal, a participant’s payout is based on the net present value of a person’s pension. That means the amount of money the pension system needs now to cover a person’s estimated retirement benefit, assuming that amount will grow over the years. Anyone thinking of participating in the buyout would have to get a calculation of the net present value from the appropriate pension system. The amount would be reduced by a certain percentage as a condition of getting the buyout.

 Full Article