Actuarial funding of pensions

Louisiana's Unfunded Pension Liability Reaches $9.3 Billion, According to Study (PDF)
3 pages. (Edward J. O?Boyle / Mayo Research Institute)

Connecticut Governor Puts Forward Benefit Unfunded Liability Reduction Plan
Excerpt:"Connecticut Governor M. Jodi Rell has proposed a sweeping public employee pension and health care benefit reform package in an effort to deal with the state's $34-billion unfunded benefit liability. A news release from Rell's office said Rell wants to invest a'sizable'portion of any resulting savings toward reducing the unfunded liability."(PLANSPONSOR.com)

The World's 300 Largest Pension Funds at Year End 2009 (PDF)
42 pages. (Towers Watson)

[Opinion] We Can't Sustain Public Pensions, According to a Pennsylvania County Controller
Excerpt:"The Chester County Retirement Board has struggled with two competing goals: meeting our state-mandated responsibility to provide government employees with defined-benefit pensions, and minimizing the burden on taxpayers. I believe these two goals are no longer compatible."(The Philadelphia Inquirer)

Pension Finance Update, September 2010 (PDF)
4 pages. (Aon Consulting)

[Opinion] 2010 Pension Funding Relief Legislation: Technical Corrections and Guidance Needed (PDF)
9 pages. (American Benefits Council)

Businesses and Unions Planning to Meet on Possible $3 Trillion Pension Disaster
Excerpt:"Labor groups will be invited to the U.S. Chamber of Commerce to talk about an alarming shortfall in state employee pension plans that some believe could lead to a new government bailout."(Capitol Hill Publishing Corp.)

New York State Common Retirement Fund Lowers Return Rate Assumption
Excerpt:"A news release from [th State Comptroller] also announced increases in 2011-12 employer contribution rates. The average contribution rate for the Employee Retirement System will increase from 11.9% of salaries to 16.3% while the average contribution for the Police and Fire Retirement System will go up from 18.2% to 21.6%."(PLANSPONSOR.com)

Cash Balance Plans Have Risk Mitigation Challenges
Excerpt:"Plan sponsors who move to a cash balance plan from a traditional defined benefit (DB) program may not always realize they are trading interest rate risk for investment risk."(PLANSPONSOR.com)

New York Comptroller Issues'Red'Alert on Pension Fund
Excerpt:"The shortfall comes despite DiNapoli's decision -- also announced yesterday -- to raise the mandatory pension contributions paid by local governments and the state to 16.3 percent of payroll, up from 11.9 percent."(New York Post)

[Opinion] Casey-Pomeroy Bill Would Bail Out PBGC, Union Pensions
Excerpt:"How much money potentially is involved? The Moody's study indicated that some 1,500 multiemployer plans, many of them representing unionized firms, were $165 billion short."(National Legal and Policy Center)

[Opinion] Public Sector Pensions: One of the Greatest Ponzi Schemes of all Times
Excerpt:"Public sector pension plans take a series of liberties that create an unrealistic financial scenario that can only be described as one of the greatest Ponzi schemes of all times. These include underestimating the raises that government workers may earn until they retire and overestimating the interest assumptions for funding. This collection of bogus assumptions is hidden away in'off-the-balance-sheet'accounting practices . . . ."(The Free Enterprise Nation)

State Pension Fund Faces Shortfall, Candidate for State Comptroller Says
Excerpt:"When the state takes its snapshot of the fund, he says, it makes several mistakes, including two big ones. First, it counts money that is not in the fund -- hoped-for investment gains that may or may not appear and future contributions from workers and taxpayers. Second, it does not take into account that the state pensions are worth more than other such promised money because they come with a constitutional guarantee."(The New York Times; free registration required)

[Guidance Overview] Funding Relief for Single Employer Pension Plans (PDF)
Pages 1-3 of 6 pages. (Trucker Huss)

SEC's Cease-and-Desist Order Against State of New Jersey Relating to Disclosure Regarding Pension Plan Obligations
Excerpt:"This alert focuses on lessons and concerns for state and municipal issuers arising from the Order."(Nixon Peabody LLP)

[Guidance Overview] New Law Provides Funding Relief for Multiemployer Defined Benefit Plans (PDF)
3 pages. (Prudential Retirement)

[Guidance Overview] New Law Provides Funding Relief for Single-Employer Defined Benefit Plans (PDF)
5 pages. (Prudential Retirement)

The Top Ten Major Misconceptions Plan Sponsors Have About Retirement Plans
2 pages. Excerpt:"[T]his list of major misconceptions about retirement plans is just a portion of the wrong advice that plan sponsors rely on, [but represents many misconceptions held by employers]."(The Rosenbaum Law Firm P.C. via JD Supra, LLC)

Pension Fund Investments Are Up, But Gaps Persist
Excerpt:"A review by Stateline of 20 public employee pension plans in 19 states shows preliminary returns ranging from 10.8 percent for the Nevada Public Employee Retirement System to 18.7 percent for the South Dakota Retirement System. Meanwhile, Wilshire Associates, a California-based investment adviser, reports a 13.09 percent median return among public plans with more than $1 billion in assets for fiscal 2010, compared to an 18.76 percent loss in fiscal 2009."(The Pew Charitable Trusts)

Broke Miami, Florida, Breaking Employee Contracts
Excerpt:"The city is operating under a state of'fiscal urgency,'declared earlier this summer. The budget deficit for next fiscal year is about $110 million. The proposed cuts in salary, pension contributions and health insurance costs amounts to about $86 million in savings for the city."(NBC Universal, Inc.)

Problems With State-Local Final Pay Plans And Options for Reform
Excerpt:"[F]inal pay plans suffer from serious shortcomings: they (1) severely'backload'benefits; (2) treat very differently workers on different career trajectories; and (3) invite mischief in terms of sudden late-career promotions. They are also riskier for workers than they appear..."(Center for Retirement Research at Boston College)

University of California Retirement Funds Face a Shortfall of More Than $20 Billion, Report Says
Excerpt:"A panel recommends increasing contributions by employees, raising the retirement age for new hires and reducing some benefits."(Los Angeles Times)

Pension Overhaul in California Is Up in The Air
Excerpt:"The governor may have to settle for a few incremental pension reforms pending in the final hours of the legislative session, particularly Assembly Bill 1987, whose tortured history illustrates the political difficulty of the issue."(The Fresno Bee)

[Opinion] The Public Pension Monster
Excerpt:"The graph projecting the growth of pension obligations in California demonstrates that what started as a little harmless back scratching has morphed into a monster that unaddressed will claim all of the resources the state can muster via taxation."(Tom Lindmark via iStockAnalyst)

[Opinion] Public Employee Pension Reforms Recipe for Disaster
Excerpt:"While many of the people, including the Daily News, calling for reform are acknowledging that private-sector workers have lost tremendous value on their retirement plans, incredibly they present that as a model for public-sector employees!"(Paul Weber in the Los Angeles Daily News)

[Opinion] Pension Time Bomb: The Shadow Hanging Over GM's Turnaround
Excerpt:"The net effect is that the pension time bomb is still ticking. If GM earns robust profits, . . . the bomb won't detonate. Otherwise -- well, in a worst-case scenario, GM winds up back in bankruptcy, with PBGC intervention both unavoidable and more expensive than it would have been last year. And that could necessitate a bailout from Congress, because of the PBGC's own deficits."(The Washington Post; free registration required)

Pension Plan Funding and Executive Compensation
Excerpt:"[The'Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010'] added a new Section (7) to Internal Revenue Code Sec. 430(c) (ERISA Section 303(c)), which provides that an employer's required pension contribution will be increased in any year by the amount of'excess employee compensation'it pays in that year, plus the amount of any extraordinary dividends and redemptions."(Michael Melbinger via Winston&Strawn LLP)

[Opinion] Letters to the Editor: Let Congress Fix the Multi-Employer Pensions It Broke
Excerpt:"Your editorial'The Next Pension Bailout'(Aug. 16) ignores the real issue: equity and fairness for small employers. Sen. Robert Casey's bill is not a bailout, it simply addresses a problem Congress created."(The Wall Street Journal)

Audio and Transcript: Even State Pensions Aren't Safe Anymore
Excerpt:"Guest host Rachel Martin talks with Keith Brainard, research director for the National Association of State Retirement Administrators, and Stephen Pincus, a Pittsburgh lawyer representing retirees in a legal fight over benefits."(National Public Radio)

[Opinion] Truth in Pensions: Just How Big a Hole Is New Jersey In?
Excerpt:"The action was historic: New Jersey is the first state targeted by the SEC for securities fraud. But with pension funds crumbling everywhere, other states probably will join us in shame. But from this day forward, cross our hearts and hope to die, New Jersey has agreed to tell the truth about its grossly and dangerously undernourished pension funds."(New Jersey On-Line LLC)

Text of Pension Insurance Data Book 2009 (PDF)
120 pages. Excerpt:"The new edition features a detailed article on the smaller of the agency's two pension insurance programs, which provides financial assistance to insolvent multiemployer pension plans."(Pension Benefit Guaranty Corporation)

More Than Half of U.S. Public Pension Funds Could Disappear
Excerpt:"In a new research paper titled: Policy Options for State Pensions Systems and Their Impact on Pension Liabilities,'[an associate finance professor] explains that the large and daunting group of troubled states pension funds'are headed for run outs and financial disaster,'an Aug. 19 announcement said."(Financial Planning)

States Study Their Pension Assumptions
Excerpt:"Pension boards in states around the country are considering recommending lower anticipated returns on investments, a move that could further pinch revenues in states struggling to balance yearly budgets."(Franklin Center for Government&Public Integrity)

Pension Fraud in New Jersey Extends Focus to Other States
Excerpt:"A spokeswoman for Gov. Pat Quinn's Office of Management and Budget, Kelly Kraft, said Illinois believed its pension disclosures were complete and accurate. The state has not hidden the fact that its pension funds have big shortfalls, she said, and there was no reason to think the S.E.C. might lodge a complaint against it, as it did with New Jersey."(The New York Times; free registration required)

New York May Reduce Assumed Returns on Public Pension Assets
Excerpt:"A reduction to 7.5 percent or 7.75 percent is likely . . . . The move'will increase the required contributions from the state and local governments but will keep the fund as strong as it is now,'. . . ."(Bloomberg Businessweek)

Pension Cuts Won't Cover U.S. Taxpayers'$3 Trillion Bill, Professor Says
Excerpt:"Taxpayers must cover at least a third of a $3 trillion bill for public employee pensions even if lawmakers eliminate cost-of-living increases and raise the retirement age, according to an academic study."(Bloomberg L.P.)

Behind Fraud Charges, New Jersey's Deep Public Pension Crisis
Excerpt:"Experts say that governors and legislators, Republicans and Democrats, have all contributed to the problem by refusing to put state money into the funds as they should have. And even if benefits are cut and taxes raised, they said, there is no obvious fix in sight."(The New York Times; free registration required)

The Next Pension Crisis: Taft-Hartley Multiemployer Plans
Excerpt:"[A post by'The Lid'on the underfunding of multiemployer pension plans includes the following:]'Many multi-employer plans are struggling after years of financial hits especially after the last recession. Along with the value of the plans going down, as the boomer generation is reaching retirement age, every year the number of people tapping those retirement funds hits a new record.'"(Workplace Prof Blog)

U.S. Alleges Fraud in New Jersey Pension Funding
Excerpt:"Federal regulators accused the State of New Jersey of securities fraud on Wednesday for claiming it had been properly funding public workers'pensions when it was not."(The New York Times; free registration required)

[Opinion] Opinion: Union Plans Want to Be Next Pension Bailout
Excerpt:"Big Labor is going Code Red on the issue, in the face of a looming accounting change that would force companies to confront the Ponzi-style nature of multi-employer pension plans."(Wall Street Journal)

[Guidance Overview] PBGC Proposes Notice, Liability and Recordkeeping Rules for Certain Facility Closings
Excerpt:"Employers would have less wiggle room in assessing whether a facility closure causing termination of more than 20% of active participants ('4062(e) event') has occurred, under an Aug. 9 PBGC proposal."(Mercer)

[Guidance Overview] PBGC Proposal to Regulate Funding of Ongoing Plans Sponsored by Companies That Restructure Their Operations (PDF)
6 pages. Excerpt:"On August 10, 2010, the Pension Benefit Guaranty Corporation . . . proposed a regulation under which PBGC . . . would require a significant subset of employers that sponsor defined benefit pension plans to, in practice, fund their plans above the level required by the Pension Protection Act of 2006 . . . ."(Groom Law Group)

Public Pensions and Its Retirees
Excerpt:"Illinois is hardly the only state to put retirees'teeth on edge. Pew found that as of fiscal 2009, only 4 states had pensions that were'fully funded,'with enough money on hand to pay future benefits. Many states are legally barred from reducing payments to current retirees, but some are breaking that mold."(SmartMoney)

[Opinion] California Governor Calls for a State Budget That Cuts Spending and Does Not Raise Taxes
Arnold Schwarzenegger, governor of California. Excerpt:"We must also reform California's pension system for government employees, whose costs to taxpayers for just one of our major pension funds have skyrocketed from $150 million a year a decade ago to almost $4 billion this year. Private-sector workers already struggle to pay for their own retirement. Now they are being forced to pay more and more for the government workers'retirement, at the very time their own retirement accounts have declined. What is worse, in five years those pension costs will grow to well over $10 billion per year, and keep growing from there."(Los Angeles Times)

Can the Illinois Public Pension Catastrophe Be Stopped?
Excerpt:"Public pension systems in Illinois have long served as vehicles for the government to borrow money out of the view of taxpayers. In place of even higher public employee salaries, politicians have made unfunded pension promises extending far beyond their own terms in office. These debts are coming due, placing a massive burden on state and local budgets."(Chicago Tribune)

Can the Illinois Public Pension Catastrophe Be Stopped?
Excerpt:"Public pension systems in Illinois have long served as vehicles for the government to borrow money out of the view of taxpayers. In place of even higher public employee salaries, politicians have made unfunded pension promises extending far beyond their own terms in office. These debts are coming due, placing a massive burden on state and local budgets."(Chicago Tribune)

New Pension Rules May Depend on Where You Work, When You Started Work and If You Were Elected
Excerpt:"In a handful of states, employees will increase their personal contributions to the plan, or begin contributing for the first time."(Governing)

[Opinion] Corporate Pension Bomb Set to Explode: Earnings to Take a Big Hit As Firms Are Forced to Top Off Unfunded Pension Plans
Excerpt:"Among companies with obligations to pay defined benefit pensions, the big risk has always been the discount rate, which is the interest rate used to determine the present value of a pension fund's future liabilities."(Forbes.com)

Ohio Public Pension Systems'Refusal to Disclose Records Draws Attention of State Lawmakers
Excerpt:"Two state lawmakers want to open up state retirement records to public scrutiny after The Plain Dealer and seven other Ohio newspapers were denied access to the information."(Cleveland Live, Inc.)

Oklahoma Teachers'Retirement System May Sue Board of Education for Refusing to Make Required $35 Million Employer Contribution
Excerpt:"Following budget cuts by the state Legislature this year, the Board of Education approved its own budget June 29, directing funding to education programs, rather than to the pension fund . . . ."(Pensions&Investments; registration may be required)

Who Should Pay for the Trillion-Dollar Pension Gap?
Excerpt:"[G]iven that we've promised at least $1 trillion more in retirement benefits to public employees than we have put aside to pay for them, who should pay to make up the difference? Should it be the employees themselves who pay, through cutbacks to annual cost-of-living adjustments for current retirees or tweaks to benefits that those still working will receive?"(New York Times; free registration required)

Taming the Whale Lurking in Pension Financing: Overly Optimistic Investment Return Assumptions
Excerpt:"To make the whale work out if earnings are 7% instead of 7.75%, contributions need to be increased from 24% to 30%, starting the first date of hiring. If earnings are 6%, contributions need to be a whopping 39% of salary cost."(Pensions&Investments)

Huge Battle Looms Over Public Pensions; Who Will (Who Should) Foot the Bill?
Excerpt:"There's a class war coming to the world of government pensions. The haves are retirees who were once state or municipal workers. Their seemingly guaranteed and ever-escalating monthly pension benefits are breaking budgets nationwide. The have-nots are taxpayers who don't have generous pensions."(Mike"Mish"Shedlock)

Los Angeles Takes Aim at Pensions
Excerpt:"With pension costs expected to consume nearly a third of the city budget within five years, the City Council on Tuesday ordered new studies of ways to rein in the expense, potentially setting up conflicts with the city's powerful unions."(LA Daily News)

Nevada Slashing Health Benefits to State Workers
Excerpt:"Facing a $111.2 million shortfall to support existing benefits, the Public Employee Benefits Plan board voted Thursday for sweeping changes that will drastically reduce benefits for active state workers and retirees."(Nevada Appeal)

Medicare Stronger, Social Security Worse in Short Run, Report Finds
Excerpt:"Medicare will remain financially solvent for 12 additional years, until 2029, because of the cost-cutting measures in President Obama's recently enacted health care legislation, the program's trustees projected on Thursday."(New York Times; free registration required)

The New Class Warfare: Private Vs. Public Worker
Excerpt:"Over the last decade, politicians . . . who sought to reform public-sector benefits, particularly pensions, argued that promises made to government workers in economic boom times no longer were affordable. But the urgency was lacking. That has changed . . . ."(Los Angeles Times)

[Guidance Overview] Pension Funding Relief Ranges From $19 Billion to $63 Billion
Excerpt:"Under the Preservation of Access to Care for Medicare Beneficiaries and the Pension Relief Act of 2010, employers with underfunded defined-benefit pension plans may elect to amortize funding shortfalls for any two plan years between 2008 and 2011 either over a 15-year period or by making interest-only payments for two years followed by seven years of amortization."(Workforce Management (free registration required))

Los Angeles, California, Council Orders New Pension Cost Studies
Excerpt:"Costs for the Los Angeles City Employees Retirement System, Los Angeles Fire and Police Pensions and the Department of Water and Power Retirement Plan have already increased nearly sixfold in the last decade, rising from $199 million in 2001-02 to $1.1 billion this year . . . ."(Los Angeles Newspaper group)

Timely Form 5500 Filing Does Not Preclude Later Funding Relief Election
Excerpt:"IRS expects to offer guidance on a range of funding relief issues, including election procedures, contribution calculations, implications for multiemployer plan status certifications, participant notices and reporting requirements (if the 5500 was already filed)."(Mercer LLC)