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Pension Update April 8, 2013

April 8, 2013

Updates this week:

  • Monthly state pension litigation update. State Budget Solutions. April 1, 2013.
  • 2013 Wilshire Report on State Retirement Systems: Funding Levels and Asset Allocation. Wilshire Consulting. February 27, 2013.
  • INDIANA: No more double dips: legislature passes bill to cut off supplemental benefits for public pensioners in their second career. IBJ.com. March 29, 2013.
  • KENTUCKY: Why Kentucky's pension reform has some governments yawning. Governing.com. April 1, 2013.
  • MINNESOTA: Taxpayers may be on the hook for an additional $36 million a year to help prop up three struggling pension funds. StarTribune.com. April 3, 2013.
  • PENNSYLVANIA: Governor gains pension reform support from a statewide organization of school employees. AltonnaMirror.com. April 3, 2013.
  • Probing the constitutional crux of Corbett's pension plan: news and analysis. PennLive.com. April 1, 2013.

Bob's Recommended Reading:

Defined Contribution Plan States:

  • Alaska, Michigan (Mandatory)
  • Indiana, Oregon (Mandatory DC & DB Plans)
  • Colorado, Florida, Montana, North Dakota, Ohio, South Carolina, Vermont Washington (Optional)

State by State:

Alabama

  • Financial health of Alabama's two largest pension funds lags. Key measures of the financial health of the Retirement Systems of Alabama's two biggest pension funds have fallen 11 straight years, RSA records show. Those measures, which compare fund assets to future pension payments, have trailed national averages for seven years in a row. AL.com. July 30, 2012.

Arizona

  • Pensions should offer 401(k) option and raise the retirement age for future public employees. AZCentral.com. December 20, 2012.
  • Funding gap for pension system grows. BusinessWeek.com. November 26, 2012.
  • Treasurer's Office recalculates pension plans using a 5% rate of return. The resulting funding ratio of even the healthiest pension program drops to just 51%. Total unfunded liabilities soar to $37 billion. AZcentral.com. August 12, 2012.

California

  • California state pension reporting "fatally flawed." KION. March 21, 2013.
  • Two charged in alleged CalPERS ‘pay-for-play.' On March 19, the U.S. attorney in San Francisco filed criminal charges against Fred Buenrostro, former CEO of the California Public Employees' Retirement System, accusing him of fraud, obstruction of justice and making false statements. Charged in the same indictment with criminal fraud and making false statements is former CalPERS board member turned "placement agent" Alfred Villalobos, whose now-bankrupt Nevada firm made $50 million as a middleman for investment firms looking to get a piece of CalPERS' business.SFGate.com. March 19, 2013.
  • Public employee unions push back with lawsuits over pension reform. LATimes.com. March 8, 2013.
  • Unfunded California state retiree health costs reach $64 billion. SacBee.com. February 27, 2013.
  • Comptroller says California has $64 billion in unfunded retirees health care liabilities. LifeHealthPro.com. February 22, 2013.
  • Annual state pension payments to CalPERS are expected to increase $200 million to a total of $4 billion in July. But the rate may go higher as the powerful pension board takes a new look at its risks and policies. CalPensions.com. February 7, 2013.
  • ‘Balanced' budget hides pension debts. CalSTRS actuaries say their fund needs $4 billion more each year to be fully funded. The state controller's actuaries need an extra $3 billion annually to pay for state retiree health care commitments. CalPERS needs an estimated $2 billion more annually to fully pay state pension debts in 30 years. Sacbee.com. January 20, 2013.
  • John Stossel on California's pension bomb ticking towards detonation. FoxBusiness.com. January 18, 2013.
  • CalPERS planning to gut a key cost-control provision of new pension law. Contracostatimes.com. January 11, 2013.
  • CalPERS released June 30, 2012 CAFR report on California retirement systems. Calpers.ca.gov. January 2013.
  • A U.S. bankruptcy judge ruled against the CALPERs claim to collect overdue pension payments from the bankrupt city of San Bernardino. Reuters.com. December 21, 2012.
  • State's seizure of private retirement plans. Foxandhounds.com. September 19, 2012.
  • Governor signs pension reform bill. OCRegister.com. September 12, 2012.
  • Legislature sends reform to Governor. The legislation: These changes are estimated to save between $52 billion and $72 billion over 30 years, according to CalPERS, one of the state's two largest pension funds. That was higher than estimates earlier in the week of $40 billion to $60 billion. CalSTRS, the pension fund for teachers, estimated there would be an extra $12 billion in savings on top of the CalPERS estimates. However, these revisions do nothing to solve the current more than $600 billion California unfunded pension liability.MercuryNews.com. August 31, 2012.
  • Governor Brown's pension reforms are a sham. Investors.com. August 28, 2012.
  • State has $62 billion in unfunded retiree healthcare obligations. CACS.org, July 30, 2012.
  • California's unfunded pensions are close to $500 billion. OCregister.com. July 11, 2012.

Colorado

  • State Treasurer says pension system is in a crisis. Colorado's public pension system is not sustainable and the state could be in a budget crisis if the system's issues are not addressed, says state Treasurer Stapleton. Stapleton, a Republican, criticized the state's 8 percent rate-of-return assumption in a meeting Wednesday with The Durango Herald editorial board. The Durango Herald. March 14, 2013.

Delaware

Florida

  • Senate panel approves pension reform and sends bill to full Senate. Miami Herald. March 27, 2013.
  • House, Senate at odds over potential pension reform.Sun-Sentinel.com. March 24, 2013.
  • House Speaker Weatherford's push to end pensions for new employees is on hold after an incomplete report was issued by an actuarial firm indicating that closing the system to future employees would endanger the benefits of current enrollees. Weatherford is asking for the missing information and a final report before moving ahead. Miamiherald.com. February 18, 2013.
  • Proposal to change Florida state pensions to 401(k) plan passes House subcommittee. TampaBay.com. February 8, 2013.
  • House Speaker wants 401(k) for state retirement accounts. MiamiHerald.com. January 24, 2013.
  • Florida Supreme Court upheld legislation requiring state employees to contribute 3 percent of their salaries to the state's pension fund, reemphasizing the authority of the Legislature to long term benefits are not impaired. Sun-Sentinel.com. January 18, 2013.
  • Legislative leaders call for pension reform. House Speaker Weatherford wants to require new state employees to contribute to a 401K-style plan, instead of counting on regular pension payments. WCTV.com. November 15, 2012.
  • Pension suffers $19.25 billion funding hole while maintaining 7.75% investment return assumption. Ai-cio.com. October 2, 2012.
  • Pension chief to Legislators: "Up contributions, lower expectations." Pension chief is calling for higher contributions to pensions and reducing the assumed rate of return from 7.75% to 7.25%.AI-CIO.com. September 18, 2012.
  • State Supreme Court to hear arguments on legislative changes to pension system beginning September 6. Bloomberg.com. September 7, 2012.
  • State fund has early 0.29% return in the last year. Miamiherald.com. August 6, 2012.

Hawaii

  • Unfunded liabilities are putting Hawaii Taxpayers in Dire Financial State. During his 2013 State of the State Address, Gov. Neil Abercrombie admitted it would take an investment of $500 million a year, every year, for 30 years, to pay off what is owed to state workers. Abercrombie said the $500 million figure was "impossible to meet all at once", and instead asked lawmakers to start reducing the debt by allocated $100 million a year beginning in the next fiscal year, "with plans to continue to pursue payment in coming years." HawaiiReporter.com. February 6, 2013.
  • In order to make the state's employee health and retirement funds viable, the state must spend $500 million per year for the next 30 years, according to the State Finance Director. Since the state cannot afford payments this large, Governor Abercrombie is proposing $100 million per year to start, which will make the funds solvent in 150 years. Still, the contribution may produce short-term benefits like better credit ratings and lower interest rates. Civilbeat.com. December 22, 2012.

Illinois

  • State doctors retire, collect state pensions and then get rehired. CBS Chicago. March 26, 2013.
  • Budget Watchdog: Current pension debt plan ‘Absolutely, Positively Unaffordable.' CBS Chicago. March 26, 2013.
  • State can charge retirees premiums for their health care benefits according to 7th Judicial Circuit in Illinois. PLANSPONSOR.com. March 22, 2013.
  • House votes to end automatic 3 percent per year cost of living increases on pensions. Instead, the measure would limit a cost-of-living increase to the first $25,000 of a retiree's pension income - ending the compounding effect that had ballooned pension payments to workers in their later years. It also would require a worker to be retired for at least five years, or turn age 67, to be eligible for the smaller cost-of-living increase. House lawmakers have previously approved separate measures that would raise the retirement age for public workers to receive a pension to 67 and that would cap the amount of income upon which pensions are based. The Senate has not considered those measures. Senators a day earlier defeated a comprehensive pension overhaul plan while approving only a more limited proposal affecting teachers outside Chicago. Senate President John Cullerton, D-Chicago, has contended that elements of the House-passed plan are unconstitutional.ChicagoTribune.com. March 21, 2013.
  • Governor taking case on pension reform to trade unions. It's a situation that the Governor and other top Democrats are hoping to take advantage of as they seek to cut costs in the state's public employee pension system. The idea is to use unionized electricians and plumbers who might benefit from pension reform - be it more money for construction work or an overall economic jump-start - to pressure their government worker comrades into cutting a deal that decreases retirement benefits. Chicago Tribune. March 19, 2013.
  • House committee approves pension reform bill 9-1. HB3411 is similar to the two bills pending in the Senate. It would limit cost-of-living adjustments to pension benefits to the first $25,000 of a pension, delay when the COLAs start, increase employee pension contributions by 2 percent and contains a mechanism to force the state to make its required pension payments. Journal Standard. March 14, 2013.
  • On March 13, the Illinois Senate Executive Committee sent two bills to the full chamber designed to rein in the rapidly rising costs of a government worker retirement system that's $96.8 billion in debt. One proposal, sponsored by Sen. Dan Biss, D-Evanston, calls for raising some retirement ages to 67, requiring workers to chip in 2 percentage points more from their paychecks and scaling back annual increases in retirement checks. The proposal also would seek to fully fund the systems in 30 years and features provisions covering university employees, rank-and-file state workers, legislators, and downstate and suburban teachers. The second proposal, sponsored by Senate President John Cullerton, D-Chicago, includes a version of the Biss plan as well as Cullerton's own approach. Cullerton wants to give employees and retirees a choice to keep their health care and receive reduced benefits or keep their current pension benefits and give up health care. Chicago Tribune. March 13, 2013.
  • Scholars propose six steps toward pension reform for SURS. Institute of government and Public Affairs, University of Illinois. March 2013.
  • SEC Charges Illinois for Misleading Pension Disclosures. U.S. Securities and Exchange Commission. March 11, 2013.
  • The Illinois House of Representatives took a first small step toward public-employee pension reform, voting to cap annual payments to retired workers to end abuses resulting in pensions exceeding $100,000 a year for some people. After weeks of delay, debate and rejection of reforms to the nation's worst-funded state pension systems, the House voted 65-7 for the measure. It would cap the salaries used to calculate pensions for retired state workers to the Social Security wage base, now at $113,700, adjusted annually for inflation. Minority Republicans boycotted the vote, as they did last week on other pension proposals, saying the process of considering the measure was a charade.Dispatch.com. March 8, 2013.
  • GOP decries "another day" of games on pension reform.RegisterCitizen.com. March 1, 2013.
  • Pension reform and responsible spending for state and local governments.IllinoisPolicy.org. February 27, 2013.
  • Illinois House Speaker Michael Madigan lit a fire under the state's tepid public pension reform efforts on Wednesday, introducing measures that would mean harsh changes for public sector workers. After weeks of silence from Madigan on the state's fiscal crisis, he offered measures that would demand bigger pension contributions from workers and raise the retirement age. He also proposed completely eliminating cost-of-living increases for retirees or tying them to the funding level of the state's pension system. Illinois' pension system is the worst-funded among U.S. states at just 39 percent. One of Madigan's proposals would halt annual cost-of-living adjustments until the funding level is at 80 percent, which is considered healthy for retirement funds. Reuters.com. February 27, 2013.
  • Credit rating lowered by S&P to lowest in nation, agency blames state's pension crisis. Standard & Poor's rating service said Friday that the rating on the state's general obligation bonds was downgraded to A- from A. The agency also gave an A- rating to $500 million in general obligation bonds that the state plans to release next week. The agency says the outlook is negative, an indication it could take the unusual step of further downgrading the state if conditions don't improve. HuffingtonPost.com. January 25, 2013.
  • Illinois pension math doesn't add up. Watchdog.com. January 17, 2013. Audits of the five state-funded pension systems released show that the net assets of the system dropped by nearly $1.5 billion last FY. TRS made just 0.76% on its investments last fiscal year. Auditors stated that the systems ended the 2012 FY with a 39% funding ratio, down from 43.3% in 2011. Sj-r.com. January 16, 2013.
  • Nekritz-Bliss pension funding guarantee would make pensions a priority over education, health care, and public safety.IllinoisPolicy.org.January 8, 2013.
  • Pension reform going nowhere in lame-duck session.SunTimes.com. January 7, 2013.
  • New actuarial report: The state is required to put $6.87 billion into five pension systems during the fiscal pension systems during the fiscal year that starts July 1, 2013.
  • About half of that is for TRS. StlouisCBS.com. December 31, 2012. Illinois already has a model for pension reform: self-managed retirement plans. IllinoisPolicy.org. January 2, 2012.
  • State is still on the cliff, facing the same 2012 perils: $9.7 billion in unpaid bills and $96 billion in unfunded pensions. ChicagoTribune.com. January 2, 2013.
  • Governor seeks quick vote on state's pension systems during lame duck session. NYTimes.com. January 1, 2013.
  • Pension mess primer: How it got here, why it now has the state's attention, and the tens of billions it will cost. Chicagotribune.com. December 30, 2012.
  • "High Noon" is approaching for pension mess. December 28, 2012.
  • Newest pension plan falls short. IllinoisPolicy.org. December 5, 2012.
  • Chamber urges state leaders to pass pension reform during veto session.ChicagandChamber.org. November 27, 2012.
  • Governor Quinn launches internet campaign for pension reform as Moody's and PEW give Illinois pensions the lowest rating in the U.S. According to OMB, each day the pension reform is not enacted boosts the long-term shortfall by $17.1 million. By 2016, Illinois will pay more for public pensions than for schools without comprehensive reform. Illinois.gov. November 18, 2012.
  • Pension debt more than doubles under new rules. Illinoispolicy.org. October 31, 2012. Illinois Teachers' Retirement System bleeding out, experts say. Foxillinois.com. October 31, 2012. Lawsuit filed by teachers union, others seek to overturn pension reform. Chicagotribune.com. October 30, 2012.
  • Volcker-Ravitch Study Says Illinois Pensions Face Insolvency. Businessweek.com. October 24, 2012.
  • TRS earned less than 1 percent on its investments last year. IllinoisPolicy.org. October 25, 2012.
  • State will be on the hook for $670 million more in teacher pensions for next budget after TRF lowered expected return from 8.5% to 8 percent. Chicagotribune.com. September 22, 2012. Next school crisis for Chicago is that the pension fund is running dry. NYTimes.com. September 19, 2012. No pension bailout press conference with Illinois Policy Institute. Youtube.com. September 20, 2012.
  • S&P just lowered the state's bond rating to A-plus, keeps negative outlook, citing the potential for further erosion of the state's pension liability over the next two years and budget risks due to the Jan. 1, 2015 expiration of big income tax rate increases enacted in 2011. Illinois is the second lowest-rated U.S. state after California. Illinois has the lowest rating Moody's gives.Reuters.com.August 29.
  • SEIU gives House Democrats Political Fund $87,000 the same day as special session on pension reform begins. Breitbart.com. August 20, 2012.
  • State Budget Solutions sends open letter to Governor Quinn: Stop legislators' pay until pension reform is passed. StateBudgetSolutions.org. August 20, 2012.

Indiana

  • No more double dips: legislature passes bill to cut off supplemental benefits for public pensioners in their second career. IBJ.com. March 29, 2013.
  • Pension system gets $360 million infusion from budget surplus. Mydesert.com. October 4, 2012.
  • Indiana pension funds took a temporary hit last year and may not rebound as much as public workers would like, based on long-term economic trends outlined for lawmakers Tuesday. The state's public pensions collected 1 percent interest on average last year, rather than the 7 percent the Indiana Public Retirement System originally expected. The poor performance caused Indiana's unfunded pension liability to increase from $3.5 billion to $4.9 billion. IndyStar.com. August 15, 2012.

Kansas

  • House dropped the plan for a 401(k)-style pension plan and now plan on issuing $1.5 billion in pension obligation bonds. Kansas City Star. March 21, 2013.

Kentucky

  • Why Kentucky's pension reform has some governments yawning. Governing.com. April 1, 2013.
  • Legislature agrees to fully the annual actuarially required contributions to pensions (about $100 million) and created a 401(k) pension system for new employees. Cost-of-living increases must be prefunded. Associated Press. March 26, 2013.
  • Legislators negotiating pension reform during veto recess. Lane Report. March 14, 2013.
  • Governor says he's prepared to call special session to deal with pension reform.Senate, House disagree about how to dig out of $30 billion hole. LaneReport.com March 1, 2013.
  • Speaker signals special session for pension reform. Courier-Journal.com. February 20, 2013.
  • A bill to overhaul the state's troubled retirement system passed the Senate on. Feb. 7. Senate Bill 2, sponsored by Majority Floor Leader Damon Thayer, calls for full funding of pension plans at Kentucky Retirement Systems by fiscal year 2015, a move that would cost more than $200 million in additional funding in the first year. The legislation also would eliminate automatic cost-of-living adjustments in retiree benefits and create a hybrid retirement plan for future hires that combines elements of traditional pensions with the 401(k) approach used in the private sector.Kentucky.com. February 7, 2013.
  • The Senate will introduce SB 2 on February 5th, a bill that guarantees at least 4 percent return of the money put into the state's retirement system, while also allowing state employees to leverage their contributions for higher gains if they choose. By recommending full funding the actuarially required contribution to the retirement system, the new hybrid cash-balance system will provide state employees with a secure retirement income and the ability to move with their pension plans to a new job, and provide taxpayers predictable costs. News.Cincinnati.com. February 2, 2013.
  • Kentucky Chamber agenda emphasizes pension reform, education. BizJournals.com. January 4, 2013.
  • House Speaker Stumbo says drug bill and pension reform are the top 2013 priorities. Courier-journal.com. December 28, 2012.
  • Funding levels continue to drop for state pensions. Actuaries reported Wednesday that pension benefits for members in the state's non-hazardous retirement plan are only 27.3 percent funded this year, compared with 33.3 percent in 2011. Louisville Courier-Journal. December 6, 2012.
  • The Task Force on Public Pensions recommended last week that the state start allocating its full pension contribution by 2015, following years of severe underfunding. But the group did not propose a plan to pay for the change, which will lower costs in the long-run but drive up expenses by hundreds of millions in the first few years. Blogs.Courier-Journal.com. November 30, 2012.
  • Kentucky business group fears time is running out on pension reform. WKYUFM.org. November 12, 2012.
  • Public pension plans face insolvency without major reforms. Kentucky.com. October 29, 2012.
  • Kentucky's Pension Challenges: Opportunities for Real Reform. Making costs manageable may require current employees and retirees to further share the load by either paying more in employee contributions or accepting reduced retirement benefits going forward. PewStates.org. August 2012.
  • Governor floats idea of "hybrid" pension plans for state and county workers, allowing current employees to keep their pensions but requiring new employees to pay into a 401k fund. Wkyufm.org. August 20, 2012.

Louisiana

  • Gov. Bobby Jindal's plan to shift future rank-and-file state workers to a 401(k)-style retirement plan is unconstitutional because it didn't receive enough support from lawmakers, a judge ruled Thursday. "Because the Legislature did not pass this by a two-thirds majority, I think it's invalid," said state District Judge William Morvant in Baton Rouge. The Governor plans to appeal directly to the Louisiana Supreme Court.TheAdvertiser.com. January 24, 2013.
  • Judge allows pension lawsuit to move forward. Pensions & Investment. December 5, 2012.
  • Facing an $18.5 billion gap, the day of reckoning looms for Louisiana's retirement systems. NOLA.com. November 9, 2012.

Maryland

Massachusetts

  • Pension fund has a good year. State officials said Tuesday the $51.9 billion pension fund posted a gain of almost 14 percent on its investments last year. The broad Standard & Poor's 500 stock index rose 13.4 percent in 2012. However, the fund plunged nearly 24 percent in the 2008-2009 financial crisis. Boston.com. February 6, 2013.
  • Fiscal Implications of Massachusetts Retirement Boards' Investment Returns. State's pension funds promise too much. PioneerInstitute.org. October 2012.
  • The state's unfunded pension liability has nearly doubled in five years to approximately $24 billion and is likely to worsen in the months ahead as the commonwealth continues to absorb the fallout from the credit-market crash of 2008. BizJournals.com. September 24, 2012.

Michigan

Minnesota

  • Taxpayers may be on the hook for an additional $36 million a year to help prop up three struggling pension funds. StarTribune.com. April 3, 2013.
  • PERA pension fund concedes underfunding. AmericanExperiment.org. December 3, 2012.
  • No one is monitoring overtime spiking. TwinCities.com. December 8, 2012.
  • Can taxpayers afford pension plans? KAALtv.com. October 29, 2012.

Missouri

  • Study shows Missouri's pension unfunded liability is $54 billion nearly five times the state's estimate of $11.1 billion.StLToday.com. March 17, 2013.
  • Taxpayers willpay an estimated $330 million morefor state employees' pensions next year (about 20% more than this year). Stltoday.com. September 21, 2012.

Montana

  • Assessing Montana's pension shortfall. Mercatus.org. February 14, 2013.
  • Legislator proposes ending guaranteed state pensions and replacing them with a 401(k)-style plan for new employees. Missoulian.com. January 29, 2013.
  • The state's two biggest employee retirement programs have shortfalls amounting to roughly $3 billion dollars over the next 30 years. Fixing the pensions has long been labeled a "top priority." Governor Bullock's fix calls for higher contributions from public employees, employers, and an infusion of revenue from natural resource development. Local governments are skeptical it may lead to increases in property taxes. MTPRNews.wordpress.com. January 4, 2013.
  • Fixing state pension system is on the legislative agenda. Missoulian.com. January 2, 2013.
  • Only freeze and shift to defined contribution can save teacher retirement.State Budget Solutions. December 6, 2012.
  • A solution to closing the funding gap. Helenair.com. November 18, 2012.

Nebraska

  • Proposed teacher retirement changes said to cut pension shortfall. Future schoolteachers in Nebraska would lose some retirement benefits, and current teachers would be required to keep paying more toward their retirement. The changes are designed to trim a $108 million, two-year gap in state pension funding. Omaha.com. February 7, 2013.

Nevada

New Jersey

  • New Jersey's $86 billion pension system for public workers missed its forecast rate of return by a wide margin last year, highlighting an unstable calculus that could put taxpayers on the hook for a system bailout. New actuarial reports show pension fund investments had a 2.52 rate of return for the fiscal year that ended last June 30, far below the 7.95 percent projection. Together with the cash-strapped state making only one-seventh of its annual contribution, the system's shortfall grew $5.5 billion, to $47 billion, in the first year since Gov. Chris Christie signed a pension reform law. Daily Record. May 24, 2013.
  • Predicting New Jersey Pension Underfunding.Bury Pensions. February 23, 2013.
  • Voters easily passed ballot measure requiring judges and state Supreme Court justices to pay more for retirement and health benefits. The constitutional amendment allows a 2011 law to apply to both judges and public workers. CBSnews.com. November 7, 2012.

New Mexico

  • Public pension overhaul passes legislature. The legislation would reduce yearly cost-of-living adjustments for pension benefits from 3 percent to 2 percent. Those currently become available two years after retirement, but the bill would phase in a seven-year waiting period. The inflation adjustments would be 2.5 percent for some retirees with yearly pension of $20,000 or less. Workers would be required to pay an additional 1.5 percent of their salaries into the pension fund. Contributions by government employers would increase 0.4 percent. Santa Fe New Mexican. March 13, 2013.
  • Senate voted 38-4 to approve legislation aimed at shoring up the New Mexico Public Employees Retirement Association. The proposed PERA solvency fix would reduce retirement benefits for current employees, retirees and future government workers. It would also impose stricter retirement eligibility guidelines on future employees.ABQJournal.com. March 7, 2013.

New York

  • NY state budget deal includes minimum wage hike, $350 rebates for middle class families and pension gimmicks.Governor Cuomo said his plan to offer local government the choice to finance future pension payments would be a part of the budget, with Comptroller Thomas DiNapoli's support. DiNapoli had expressed reservations about the plan, which allows cities and other governments to pay lower pension payments in the short-term in exchange for making higher payments more than a decade from now. Syracuse.com. March 20, 2013.
  • Local governments borrow $368 million to pay for pension costs this year-an 81 percent increase over last year. The program, adopted in 2010, is criticized for allowing local governments to borrow costs that should be paid annually. Rather, it allows municipalities to borrow off the pension fund at a 3 percent interest rate and lower their payments. February 15, 2013.
  • Comptroller criticizes Governor's plan to cut pension costs because of its potential impact on the funding levels of the state pension system. Governor Cuomo proposed allowing municipal governments to defer a portion of their pension costs by choosing a fixed contribution rate below the current rate. The plan comes on top of another pension deferment plan approved in 2010 (backed by the Comptroller) that allows municipalities to borrow from the pension fund to pay their pension costs. NYTimes.com. January 29, 2013.
  • Iceberg Ahead: The Hidden Cost of Public Sector Retiree Health Benefits in New York. EmpireCenter.org. September 2012.
  • The "balanced budget" is full of gimmicks and non-recurring revenue sources to pay for rising pension costs and the most generous Medicare benefits in the nation. Bloomberg.com. December 18, 2012.
  • Public school pension costs to skyrocket. Pressconnects.com. November 2, 2012.
  • NY pension fund invested in controversial private equity funds. Yahoo.com. September 25, 2016.
  • The true cost of retiree health care (OPEB) entitlement totals at least $210 billion for NY's 89 largest state and local government employers. The estimates suggest total unfunded liability to come to $250 billion. Empirecenter.org. September 2, 2012.
  • Pension fund for state and local government employees reported a negative 1 percent return on investment in the most recent quarter, dropping the overall value of the fund to $146.5 billion. The average employer contribution rate is almost 19 percent of salary for most public workers and nearly 26 percent for police and firefighters. WSJ.com. August 20, 2012.

North Dakota

  • Senate Bill 2108 as submitted to the Governor increases member and employer contributions for the NDPERS main retirement system, Judges, defined contribution and Highway Patrol systems by 1 percentage point each in January of 2012 and 2013. The law enforcement plan increase is .5% for the member and .5% for the employer. For the main retirement plan, the two-year increases will be from 10.3% for employees to 12.3%, and for employers, from 16.7 to 18.7% of compensation. Source: North Dakota Legislature.

Ohio

  • Governor signs public pension bills into law. Dispatch.com. September 27, 2012.
  • Public pension changes pass Legislature. The pension bills raise premiums, lower payouts, and tighten eligibility requirements for affected teachers, police and other public workers. Measures take effect Jan. 7, 2013. Employee contribution rates gradually increase from 10% of salary to 12.25% for those belonging to the Ohio Police and Fire Pension Fund, and from 10% to 14% for members of the State Teachers Retirement System. Members of OPERS and the School Employees Retirement System would not see an increase in contributions.CBSNews.com. September 13, 2012.

Oklahoma

Oregon

  • Strong investment returns in Oregon's public pension fund still leave $14 billion deficit.OregonLive.com. January 25, 2013.
  • Business leaders join chorus of calls for pension reform. Watchdog.org. December 3, 2012.
  • Governor Kitzhaber settled on a pension reform package reducing annual inflation adjustments, reducing taxpayers' pickup of employee retirement contributions, and closing a benefit loophole for out of state retirees who do not pay taxes in OR. Oregonlive.com. November 17, 2012.
  • Novy-Marx and Raugh say Oregon has $90 billion unfunded pension liability, while the state says it's only $16 billion. Statesmanjournal.com. October 24, 2012.

Pennsylvania

  • Governor gains pension reform support from a statewide organization of school employees. AltonnaMirror.com. April 3, 2013.
  • Probing the constitutional crux of Corbett's pension plan: news and analysis. PennLive.com. April 1, 2013.
  • PA needs to act now on pension reform.PennLive.com. March 22, 2013.
  • The governor proposes:
    • Creating a new 401(k)-style retirement benefit plan for future employees, consistent with the retirement packages currently enjoyed by private sector employees.
    • Adjusting the method of calculating future benefits for current employees in order to maintain the solvency of our pension system and guarantee all current and future employees a worry-free retirement.
    • No changes to current retirees.
    • Providing nearly $140 million in pension savings for school districts and other local education agencies across the state. Yahoo! News. February 5, 2013.
  • Governor links school funding to pension reform. WGAL.com. January 29, 2013. Budget Chief says pension reforms are essential. Officials are considering changes to the way pensions are calculated. YDR.com. January 28, 2013.
  • $41 billion pension shortfall looms over school, state budgets.TimesHerald.com. January 26, 2013.
  • Pension bomb to hit Pennsylvania families. Commonwealthfoundation.org. January 18, 2013.
  • Pension crisis is ‘tapeworm' of state budget.PottsMerc.com. January 13, 2013.
  • State has fourth largest unfunded pension liability in the nation. Timesleader.com. December 31, 2012.
  • Lawmakers prepare to tackle pension shortfalls. MCall.com. December 25, 2012.
  • Governor Corbett: Pennsylvania must reform public pensions or face budget crisis. Philly.com. November 28, 2012.
  • State budget office releases Keystone Pension Report. WHPTV.com. November 25, 2012.
  • The current payment schedule to meet pension debts requires increasing contributions from taxpayers to more than $6 billion five years from now - rising to an annual obligation of more than $8 billion 15 years from now. PennLive.com. August 14, 2012.

Rhode Island

  • Pension cuts necessary and legal.Bloomberg.com. December 5, 2012.
  • Governor urges legislative leaders and unions to negotiate pension reform compromise. State Treasurer Gina Raimondo and House Speaker Fox would rather see the courts settle the matter.GoLocalProv.com. December 8, 2012.
  • Citing $5 trillion national crisis, Boise enters pension fray. ThompsonReuters.com. November 15, 2012.
  • Federal Judge approves Central Falls bankruptcy, allowing the residents to remain in receivership after its bankruptcy. CBSnews.com. September 7, 2012. The approval of the court drives home the message to public sector pensioners that if they don't agree to renegotiate retirement benefits, they could face steeper cuts if their city goes bankrupt. In Central Falls, the city's retirees had their pensions cut by 55%, receiving an average of $16,626 per year. Reuters.com. September 3, 2012.

South Carolina

  • Prisons, roads big winners in SC House $22.7 billion budget. The State. March 13, 2013
  • Pension fund is down $1 billion in the last year. The 0.6% return is well below the goal of the fund. Thestate.com. August 24, 2012.
  • Governor signs pension reform requiring state employees to contribute more to their pension plans and requiring 30 years of service to receive pensions. It also eliminates Teachers and Employee Retention Incentive Program. July 25, 2012.

Tennessee

  • The Tennessee Treasury Department officially proposed a change to the state pension plans.The changes would apply only to new hires and would affect state employees, higher education employees and K-12 teachers hired after June 30, 2014.The changes create a hybrid benefit defined contribution plan. NewsChannel5.com. February 26, 2013.

Texas

  • Texas Teachers Retirement System said moving away from traditional defined-benefit plan won't shrink unfunded liabilities. The fifth-largest U.S. public pension by assets positioned that the change would widen a $24 billion gap between promised benefits and projected assets to $36 billion. Bloomberg.com. September 4, 2012.

Utah

  • Utah Auditor releases performance audit on state retirement system showing retirement systems is too optimistic in estimates about the rate of return on investments.SLTrib.com. February 26, 2013.

Vermont

  • Governor signs pension reform that allows Judges to order any public employee to forfeit some or all of their pension if they are convicted of certain financial crimes related to their employment. Fox44News.com. March 20, 2013.

Virginia

  • State pension investment cuts growth. Virginiawatchdog.org. August 23, 2012.

Washington

West Virginia

  • Lawmakers weigh curbs on public pensions. Retirees now receive an annual pension based on years of service and the average of their three final annual salaries. The proposal increases the range of that average to five years for new hires, potentially decreasing the benefit. The biggest change shifts the contribution burden toward pensions from the state to the employees, increasing their share from 4.5 percent of their pay to 6 percent. Register-Herald.com. October 15, 2012.
  • In addition to 7.5% cuts, all state agencies must shift funds to cover increase in employers' share of pensions after pensions failed to grow 7.5% annually during the 2011-12 FY. Earnings were between 0-2%, according to Budget Office Director Mike McKown. WVGazzette.com. August 7, 2012

Wisconsin

  • Winning the border budget war. Watchdog.org. January 31, 2013.
  • The $6 billion Variable Fund, an all-stock mix of domestic and international equities, was up 16.9 percent. About 18 percent of participants in the Wisconsin Retirement System elect to put some of their money there in addition to the Core Fund. Due to the complicated "smoothing" mechanism built into the system, the state is still paying off losses from the 2008 market plunge, rather than giving larger checks to beneficiaries. Host.madison.com. January 16, 2013.
  • Retired Wisconsin public employees could face up to 13% decrease in pensions beginning in May. PlanSponsor.com. December 28, 2012.
  • Wisconsin and Illinois far apart on the status of public pension funding. Chicagotribune.com. November 26, 2012.