News

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.

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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.

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The brief’s key findings are:

• Do households in the National Retirement Risk Index identified as “at risk” recognize their situation?
• The analysis finds that almost 60 percent of households have a good sense of whether or not they are on track for retirement.
• But about 20 percent incorrectly think they are prepared, in large part because they do not recognize that their 401(k) savings are inadequate.
• These households are in the most danger of saving too little, but even those who know they are unprepared may not take action unless prodded.

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Welcome  Nyhart Actuary & Employee Benefits to IPPFA.

Nyhart is one of the nation’s leading independent actuary and employee benefits consulting firms. Nyhart is a growth-driven consulting firm composed of actuaries, consultants, attorneys, accountants, and administrators who advise clients from public and private companies on financial matters related to pensions, retirement benefits, compensation strategies and other employee benefits.

Letter to U.S. Congress from President McNamee concerning the Medicare program under the American Health Care Act.

Public Safety Medicare Choice Act

BACKGROUND AND OUTLINE OF LEGISLATION

Our nation’s first responders – police officers, firefighters and emergency medical personnel – risk their lives in the service of their communities for modest pay. They look forward to the benefits their pension plans provide in their retirement years. Most public employees are eligible to retire after 20-25 years of service and most in physically and mentally demanding occupations, such as law enforcement and firefighters, retire in their mid-50s. In most cases, the average savings accrued by defined benefit pension plans allow first responders to enjoy approximately 50 percent of their yearly salary in retirement.

Unfortunately, the rising costs associated with employer-sponsored health care are gradually eroding retirement income and the peace of mind that comes with it. For retirement systems designed to provide pensions only, offering a health care plan has become burdensome and is putting pension reserves at risk. Public plans are finding it increasingly difficult to fund retiree health care and are scaling back or eliminating plans. One simple way we could immediately usher in an affordable option is through a universal benefit already accessible in every state – Medicare.

Medicare, if made available at an earlier age, would provide more plan choices for eligible retired public safety officers who have already contributed to the Part A program. Public safety officers, who have earned 40 or more credit quarters for Medicare Part A, should be able to not only buy into Part A (hospital insurance), but also Part B (medical insurance), Part C (Medicare Advantage) and Part D (prescription drug coverage).

Providing this early avenue into Medicare will help ensure that our first responders have the dignified retirement they’ve earned.

Outline of Legislation

Eligibility –

1. An eligible retired public safety officer age 55 or older, who does not have access to any local, state and federal health plan or an affordable employer-sponsored health plan, may elect into Medicare Part A, Part B, Part C or Part D.

Definitions –

1. ‘Eligible retired public safety officer’ means an individual who, by reason of disability or attainment of normal retirement age, is separated from service as a public safety officer.
3. Consistent with the definition contained in the Omnibus Crime Control and Safe Streets Act, 42 U.S.C. 3796b(9)(A),(D), ‘public safety officer’ means—

(A) an individual serving a public agency in an official capacity, with or without compensation, as a law enforcement officer (i.e. police, corrections, probation, parole and judicial officers), as a firefighter, or as a chaplain; or

(B) a member of a rescue squad or ambulance crew who, as authorized or licensed by law and by the applicable agency or entity, is engaging in rescue activity or in the provision of emergency medical services.

‘Affordable health coverage’ means an employer-based health plan covering only the employee that costs 9.66 percent or less of the employee’s household income and the “minimum value” standard of the ACA that pays at least 60 percent of the total cost of medical services for a standard population to include substantial coverage of physician and inpatient hospital services.

Supplemental Insurance –

1. An eligible retired public safety officer, who elects to participate in Medicare under this section, may purchase supplemental insurance plans (Medigap policies for Medicare Part A and Part B).

Means Testing –

1. An eligible retired public safety officer, who elects to participate in Medicare under this section, shall be subject to current Medicare means testing.

1. Cost Sharing –-
2. (a) Enrollees under this Act shall be included in base calculations for Medicare premium levels.

The brief’s key findings are:

• This analysis addresses how the transition from defined benefit to defined contribution plans affected retirement wealth and income during 1992-2010.
• The results show:
  • total retirement wealth from employer plans was roughly flat, and this wealth is now more skewed toward those with more education;
  • the income produced by each dollar of retirement wealth has declined, despite a tendency for workers to retire later; and
  • the amount of income relative to a worker’s earnings has declined.
• The bottom line is that employer plans are providing less retirement income today than in the past.

 Full Article

DEFINED BENEFIT PENSIONS CAN DO MORE WITH LESS

DB pensions can provide the same benefit as a defined contribution plan at about half the cost.

SWITCHING FROM DB PENSIONS TO DC PLANS INCREASES TAXPAYER COSTS, AND DOES NOT REDUCE OR ELIMINATE ANY UNFUNDED PENSION LIABILITIES.

More Americans are leaving the workforce without pensions, with inadequate 401(k) balances and relying more on Social Security. Americans also face increasing costs for food, utilities, prescription drugs and healthcare costs. For many, then numbers just don’t add up.

 Full Article

Brexit — Implications for Ireland

Breakfast Seminar with the Irish Consulate of Chicago:

Ireland is the EU country that stands to be most seriously affected by the UK’s exit from the EU. While fully committed to remaining an EU member, Ireland is determined to retain the strongest possible relationship with its nearest neighbor. How will Ireland protect its interests in the exit negotiations launched in March? What are the implications for trade and investment in Ireland? And how will the relationship, political and economic, with Northern Ireland be affected? Join Ireland’s Consul General to the Midwest, Brian O’Brien, and Vice-Consul Ragnar Almqvist to discuss what Ireland’s Taoiseach (Prime Minister) has described as ‘the greatest economic and social challenge’ his country has faced in the last half century.

Ireland’s Consul General to the Midwest, Brian O’Brien, along with IPPFA President James McNamee, have the pleasure of inviting you to a breakfast seminar titled “Brexit—Implications for Ireland.” This event will be held at the Union League Club of Chicago on Friday, April 7th from 8:30am to 10:30am.

When?

Friday, April 7th, 2017 from 8:30-10:30am

Where?

The Union League Club of Chicago

65 W. Jackson Blvd.

Chicago, IL 60604

How do I R.S.V.P?

Contact Mayra Banuelos:

mayra@ippfa.org

(630) 784-0406