STUMP » Articles » Around the Pension-o-Sphere: Multiemployer Plans, Illinois, Kentucky, and New York » 16 February 2018, 17:05

Where Stu & MP spout off about everything.

Around the Pension-o-Sphere: Multiemployer Plans, Illinois, Kentucky, and New York  

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16 February 2018, 17:05

Not necessarily in that order.

Lots of stuff is going by, and rather than waiting and doing one of my huge omnibus posts for the subject in question, I thought I’d capture the state-of-play for some hot topics.

I’m off from work next week, which does not necessarily mean I will be blogging more. I have something in mind for blog clean-up next week, and I may only have stuff on Monday & Tuesday, depending. Who knows?

I am going to something interesting next Thursday, and if anything worthwhile comes out of that, I’ll write about it here.

MULTIEMPLOYER PLANS: A COMMITTEE AND A CRISIS

Before I get into recent news, I see John Bury is starting a new series of posts:

Focus On: Central States (1) Current Status
Posted February 16, 2018 by burypensions in Focus On, Multiemployer Pensions. 2 Comments

In this new series* I will look at one plan in detail based primarily on 5500 data publicly available (though in this case I also have a lot of material obtained under the Freedom of Information Act regarding the 2007 UPS withdrawal) that some concerned participants shared with me.

In 2016 the Central States Pension Fund was denied MPRA relief. According to their latest 5500 form the plan has negative net cash flow of over $2 billion annually with maybe $14 billion in assets left in it now.

Go over to Bury’s site for more. He’s been covering the MEP stuff more than I have, and definitely knows his way around a form 5500 more than I do (as I didn’t do that sort of work, and he did.) I recommend signing up for email notifications – I get an email each time a new post is put up there. (No, I don’t know how to implement that on my own site right now… I am actually looking into new blogging platforms for the site, but have no timeline for any conversion.)

Anyway, in the recent superduper spending bill from Congress, a committee was formed.

Brown leads creation of pension-crisis committee:

House and Senate lawmakers will form a committee aiming to solve, by year’s end, the looming pension crisis facing about 1.5 million Americans.

Democratic Sen. Sherrod Brown of Ohio on Wednesday announced the creation of a bipartisan House and Senate joint select committee tasked with providing a legislative solution that will produce a bill for votes in the House and Senate during the last week of November.

“Washington bailed out Wall Street and Wall Street turned around and stole the pensions Ohioans worked for,” Brown said.

“Now Congress has [the] responsibility to protect the pensions workers earned before it is too late,” he said.

“While it is not the immediate solution we hoped for, this committee will force Congress to finally treat the pension crisis with the seriousness and urgency American workers deserve.”

Brown secured the creation of the committee as part of the congressional budget compromise reached on Wednesday afternoon.

More coverage on this:

About that last — I thought that the failing MEPs like Central States would have been a bigger campaign issue in 2016… and it didn’t even blip. I thought there would be more media coverage… but all the Trump and Russia crap has been sucking up oxygen.

I expect this committee to have some publicized public hearings, but I’m not terribly sanguine about coverage unless the media can get over their Trump obsession. Media guys, there are some really important issues getting ignored because of your damn Trump crusade.

ILLINOIS BUDGET PROPOSAL: PAY FOR YOUR OWN DAMN PENSIONS

Gov. Rauner, the biggest disappointment I’ve had lately re: governors and pension reform (I had big expectations for him… which I really should have tempered, given: Illinois)

But here is something, not much, but something:

Rauner’s proposed budget hinges on shifting pension costs to schools

SPRINGFIELD — Gov. Bruce Rauner proposed on Wednesday an election-year budget that relies on a politically questionable shift of pension costs to colleges, universities and local school districts.

“The simple truth is this: We have to change the way we manage pension costs and group health expenses. If we don’t, our finances will continue to deteriorate, our economy will remain sluggish and our tax burdens will stay high and keep rising,” Rauner said in his fourth budget address. “Our FY19 budget addresses the problem head on and creates a surplus that we can use to pay down some of our debt.”

Rauner’s budget office pegged the surplus at $351 million, although that depends on cooperation from Democrats as well as some Republicans who signaled skepticism.

The key cost-cutting provision in Rauner’s budget is a plan to shift pension and group health insurance costs — 25 percent this year, rising to 100 percent in four years — off the state budget and onto individual universities, community colleges and local school districts.

It never made much sense for the state to cover contributions for the teachers pensions — the states didn’t set the teacher salaries. The teachers’ employers are the localities, not the state.

FWIW, there is a similar problem with Connecticut teachers pensions.

The main problem is that the state ends up subsidizing the high-property-tax localities that pour loads of money into their systems, pay top dollar for the teachers, etc. Shovel that money into the rich districts, yay.

More responses:

So good luck with all that.

As I discussed with some others earlier today, it’s just positioning for elections… as per that last link to an editorial.

KENTUCKY PENSION REFORM: ANY DAY NOW… WE PROMISE

The following headlines are presented without comment or excerpt:

Okay, so I’ll believe it when we see it. If they filed anything today, I missed it.

But there’s a second wrinkle I didn’t mention. Last year, with the failed pension reform plan, there was a secret actuarial analysis that, shall we say, underwhelmed me. To quote myself:

GOVERNOR BEVIN: GET YOUR CRAP TOGETHER

The main disappointment has been the governor of Kentucky himself. That said, given his prior activities, like trying to appoint somebody who wasn’t qualified to be the chair of the Kentucky Retirement Systems board, I can’t say I’m surprised.

So I’m annoyed by stories like the following: Bevin administration refuses to release report on pension bill’s cost to taxpayers:
…..
There are so many things I find annoying about this, but here is the main problem.

Bevin knew, for over a year, he wanted to make huge changes to Kentucky pensions.

To get this done, one really needs to build up trust that:
1. These changes are necessary
2. The changes will fix the problem (however one defines the problem)

Waiting to get analyses done and then hiding analyses because you don’t like the results… doesn’t make one feel good about either item.

So the Attorney General (a Democrat, while Bevin is a Republican) has something interesting to say:

Bevin broke law by hiding financial analysis of pension plan, Beshear rules

Gov. Matt Bevin’s administration violated the Kentucky Open Records Act when it refused to release an actuarial analysis showing how much the Republican governor’s proposed pension reform plan would cost, according to a ruling by Attorney General Andy Beshear’s office.

After a financial analysis of the plan’s impact on teachers’ pensions was released against Bevin’s wishes, his office refused to release in November an analysis of its impact on the pension systems for state and local government workers.

At the time, Bevin’s chief budget officer said the analysis, performed by GRS of Southfield, Mich., was still preliminary and would be used to make changes to the proposed bill behind the scenes. Since then, no replacement bill has emerged and the analysis was never released.

Beshear’s office ruled this week that the document should be released to the public because the firm had given Kentucky its final report.

I would like to see that report myself.

Bevin has been a disappointment to me re: pensions for longer than Rauner. I have no expectations from him now, because this is absurd. You want to make huge changes, and you won’t share the analysis of the impact of the change? Come on.

Anyway, I don’t have much hope for anything from Kentucky this year, whether its legislature and certainly not from the government.

NEW YORK PENSION LIMERICKS HIDE THE TRUTH

Here ya go:



The links are in the tweet, but here is the link to all the New York (state and city) public pensions in the Public Plan Database. And the four city plans individually:

Here is a screenshot:

The NYC pensions are 100% full contribution payers. (So are the state pensions)

So why do their funded ratios keep going down or are stagnant? And the costs keep going up?

Here is a mild form – from the largest of the NYC pensions, NYC ERS.

Costs escalating:

Funded ratio stalled:

Worse situation – NYC Teachers.

Costs escalating:

Funded ratio stalled:

In fact, in both of these projections, the funded ratio numbers are exactly level for several years in a row. That makes me suspicious, and I’ll need to investigate that later.

Anyway, yay for well-funded pensions! Too bad it’s the state that has them, and not the city.


Related Posts
Setting the Stage for 2017: Failing Multiemployer Pension Plans
Public Pensions Watch: Sometimes Politicians Do the Right Thing
Kentucky Asset Manager Warning: the ESG Brou-Ha-Ha Continues
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