All about risk
Excerpt:
The City of Springfield is looking to make a payment to the city’s growing fire and police pension funds.
An ordinance states the city can put $589,323 towards that pension fund.
During the Committee of the Whole meeting on Tuesday, Feb. 9, Springfield City Council members were in favor of doing this, including Ward 7 Alderman Joe McMenamin.
Author(s): Tessa Bentulan
Publication Date: 10 February 2021
Publication Site: News Channel ABC 20
Graphic:
Excerpt:
Illinoisans who thought new House Speaker Chris Welch might change the direction Illinois is headed in just got a dose of reality. Welch recently said he wants Illinois to have a second go at a progressive tax scheme, this time committing the tax hike proceeds to pensions. Illinoisans rejected Gov. Pritzker’s first attempt, he said, because they didn’t know where the tax hike dollars would go. “…folks don’t trust us,” Welch said.
Welch is right about the trust factor, but he’s wrong to think Illinoisans will suddenly approve a tax hike just because the legislature promises to funnel the new revenues to pensions. They know it’s unlikely politicians will keep their promise. And Illinoisans know the state’s unreformed pensions are a corrupted mess – that they’d be throwing good money after bad.
Author(s): Ted Dabrowski and John Klingner
Publication Date: 2 March 2021
Publication Site: Wirepoints
Excerpt:
New Democratic House Speaker Emanuel “Chris” Welch suggested Wednesday that the state should again ask voters to approve a graduated-rate income tax, but this time target the new money toward paying down Illinois’ massive pension debt.
The call for a do-over came after voters in November overwhelmingly rejected Democratic Gov. J.B. Pritzker’s graduated income tax proposal. Opponents, including Republicans and business leaders, used distrust of Springfield to argue for keeping the state constitution’s flat tax requirement.
Author(s): DAN PETRELLA
Publication Date: 24 February 2021
Publication Site: Chicago Tribune
Link: https://www.inquirer.com/wires/ap/look-njs-budget-proposal-taxes-schools-pension-20210301.html
Excerpt:
New Jersey Gov. Phil Murphy’s $44.8 billion budget proposal, unveiled last week, is a boon for labor and public sector pensioners, thousands of middle class residents and schools across the state.
….
New Jersey’s public worker pension plan has been underfunded for decades, but lawmakers and former Gov. Chris Christie began a ramped-up payment plan. Murphy wants to supercharge that plan and reach full payment a year early under the budget.
The payment would climb by $1.6 billion over the current fiscal year. The payment doesn’t translate to a boost in pensions for retirees. But it meets what actuaries have determined is the amount the state must pay to carry its share of the cost of pension payments to hundreds of thousands of retirees.
Author(s): Mike Catalini
Publication Date: 1 March 2021
Publication Site: Philadelphia Inquirer
Link: https://www.abqjournal.com/2363378/senate-passes-bill-boosting-pension-fund-contributions.html
Excerpt:
New Mexico’s teacher pension fund would benefit from stepped-up taxpayer-funded contributions under a bill that won Senate approval Thursday.
Senators voted 36-6 to pass the measure, Senate Bill 42, which would also extend for two more years a program for retired educators who return to the classroom.
….
Specifically, the bill would increase the taxpayer-funded employer contribution rate paid into the pension fund by 1 percentage point over each of the next four years – taking the rate from 14.15% to 18.15% by the 2025 budget year. Employee contribution rates into the fund would not change.
Author(s): DAN BOYD / JOURNAL CAPITOL BUREAU CHIEF
Publication Date: 25 February 2021
Publication Site: Albuquerque Journal
Excerpt:
Gov. Phil Murphy?s call for New Jersey to make its first full pension contribution in 25 years is generating questions about retirement-system overhaul in one of the nation’s lowest-rated states, and how might the capital markets respond.
Murphy on Tuesday revealed the proposal to pay toward pensions roughly $6.4 billion, or about 14% of his $44.8 billion fiscal 2022 budget proposal to lawmakers. Overall spending would rise 10%. Democrat Murphy’s election-year budget would increase aid to schools and provide income-tax rebates to low- and middle-income families.
Making the full actuarially required contribution will need an additional $1.6 billion expense, according to Murphy. New Jersey was initially scheduled to earmark 90% of its full contribution this year under a ramp-up plan.
Author(s): Paul Burton
Publication Date: 24 February 2021
Publication Site: Fidelity Fixed Income
Link: https://www.carolinacoastonline.com/regional/article_c65c2932-6633-11eb-8288-1f1410ad3f83.html
Excerpt:
In a move that will make government-employee pensions less risky for taxpayers, N.C. Treasurer Dale Folwell announced Tuesday, Feb. 2, that the assumed rate of return on the main state retirement plan will be lowered.
Folwell and the Retirement Systems Division said the assumed rate of return for investments in the North Carolina Retirement Systems Fund will be reduced from 7% to 6.5%. The move was unanimously approved by the boards representing teachers, state employees and local government employees on Jan. 28.
Lowering the rate requires greater contributions from state and local governments, but keeps debt from piling up in the long term.
Author(s): Johnny Kampis, Carolina Journal
Publication Date: 3 February 2021
Publication Site: Carolina Coast Online
Link: https://www.ptreyeslight.com/article/push-pension-reform-rocks-teachers
Excerpt:
Teachers are upset at the Marin County Board of Education for discussing pension reform in the middle of a pandemic without any feedback from labor unions. The county board considered a resolution last month that calls on state legislators to enact pension reform, proposing several possible solutions—including weakening pensions by reducing benefits and raising the retirement age. Teachers spoke out against the nonbinding resolution, which was tabled in response to their concerns.
…..
School districts and employees have no say in how much they pay. At Shoreline, about 10 percent of the general fund is paid to retirement funds.
The required contribution from districts has steadily risen following the passage of A.B. 1469, which was intended to fully fund CalSTRS. When the bill passed in 2014, the state required districts to pay 8.88 percent of their payroll to the teachers’ retirement system. This year, they are required to pay 16.15 percent. Mandated CalPERS contributions have risen from 11.77 to 20.7 percent of payroll costs in the same timeframe, leaving less money within districts for direct education costs.
The rising liability caught the eye of the Joint Legislative Advisory Committee, a countywide group of elected school board members and superintendents created to advocate on behalf of public education in Marin. Pension reform has been a priority for the committee since 2014, and it’s been the number-one goal since 2017.
Author(s): Braden Cartwright
Publication Date: 3 February 2021
Publication Site: Point Reyes Light
Excerpt:
New Jersey Gov. Phil Murphy is expected to propose making a full payment to the state’s chronically underfunded pension system for the first time since 1996, a sign that the blow from the pandemic to all states’ finances isn’t as brutal as officials originally feared.
Mr. Murphy, a Democrat, will call for a $6.4 billion payment to the pension system in his budget address Tuesday, senior members of his administration said. The Murphy administration has been ramping up pension payments and originally intended on making a payment of $5.76 billion for the fiscal year that begins in July.
In New Jersey, as in many other states, tax revenues have outperformed earlier projections. When the pandemic hit, states projected revenue would drop off significantly. State revenues ended up falling 1.6% in fiscal year 2020 and were 3.4% lower than projected before the pandemic, according to the National Association of State Budget Officers. While states expect revenues to fall 4.4% in fiscal 2021, which ends on June 30 for most, 18 states are seeing revenues come in above forecasts.
Author(s): Joseph De Avila
Publication Date: 22 February 2021
Publication Site: Wall Street Journal
Excerpt:
That $6.4 billion is what the actuaries hired by New Jersey for the specific purpose of providing absurdly low contribution amounts came out with for the 7/1/21 to 6/30/22 plan year. It includes a massive amortization portion to make up for decades of absurdly low contribution amounts (some of which were not even deposited).
Author(s): John Bury
Publication Date: 22 February 2021
Publication Site: Burypensions
Excerpt:
The City of Springfield is going to make an extra payment to their growing fire and police pension funds, but this is only going to make a small dent in the overall pension costs.
During the Springfield City Council meeting on Tuesday. Feb. 16, the aldermen voted in favor of making a $589,323 payment to the police and fire pension funds.
The reason they can make this move is because their corporate fund balance was over 20% after closing the books on Fiscal Year 2020 last August, but Springfield Mayor Jim Langfelder said this is small.
Author(s): Tessa Bentulan
Publication Date: 16 February 2021
Publication Site: News Channel ABC 20
Link: https://simpleflying.com/delta-staff-pension-contribution/
Excerpt:
Delta sponsors defined benefit pension plans for eligible employees and retirees. According to its recent SEC filing, the airline had no minimum funding requirements in 2019 or 2020. There are also no minimum funding requirements in 2021. Based on Delta’s current projections, the airline does not expect any minimum required contributions until 2025.
However, in 2019, Delta voluntarily tipped US$1 billion into pension plans. Last year, because of the cash crunch, Delta only put $49 million in. However, in 2021, Delta plans to upsize that figure and voluntarily put significantly more money into their employee’s pension plans.
“We plan to contribute at least $500 million to these plans in 2021,” says a note buried in Delta’s recent financial filings with the SEC.
Author(s): Andrew Curran
Publication Date: 17 February 2021
Publication Site: Simple Flying