Two State Solutions

Recently New Jersey gimmicked their public pension system out of the funded-ratio cellar, moving past Kentucky, and that passes for progress here.

Whereas Kentucky passed legislation (that was overturned last week) New Jersey closed out their legislative year today with no action on pensions. It gets even starker.

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Murphy on Safari for Pension Game

Prior to his trip to Tanzania New Jersey Governor Phil Murphy made some time to exhibit his obliviousness:
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My takeaway:

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Volcker State Budget Report

The Volcker Alliance released its second annual report on states’ financial condition.

Of most interest to me:

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Private Pension Plans – 2016 Update

The Employee Benefits Security Administration (EBSA) released a report on private pension plans (excluding “one-participant” plans) based on data taken from their 2016 5500 filings.

Of most interest:

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Defined Benefit Demise Continues

According to Pension Benefit Guaranty Corporation (PBGC) data it is the eighteenth largest (by participant count) Single-Employer Defined Benefit Plan in the country and among the best funded. However, last week it came down:

Bristol-Myers Squibb Company (BMY) today announced it will transfer $3.8 billion of U.S. pension obligations through a full termination of its U.S. Retirement Income Plan (the “Plan”). The obligations will be distributed through a combination of lump sums to Plan participants who elect such payments, and the purchase of a group annuity contract from Athene Annuity and Life Company (“Athene”), a wholly-owned insurance subsidiary of Athene Holding, Ltd (ATH), for all remaining liabilities.

This transaction continues the Company’s pension de-risking strategy and actions, which began with the freezing of the Company’s U.S. Plan in 2009. This transaction reduces Bristol-Myers Squibb’s future risk and administrative costs while entrusting the pensions of Plan participants and their beneficiaries to a highly rated financial institution with expertise in the long-term management of retirement benefits.

Looking at their latest 5500 filing:

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What Happens to Retirees When the Money Runs Out?

Along with Prichard, AL and later Detroit, MI it was Central Falls, RI in 2011 that became a cautionary tale for what happens when public pensions go unfunded and CBN decided to follow up:
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More follow up:

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NASRA Data (3) Amortization Methods

High interest rates get the attention, such as it is, when it comes to understating contributions that fund benefits in public sector pension plans but there are also gimmicks to keep payments low on the unfunded liabilities that inevitably develop. Here they are as taken from NASRA data where amortization methods were reported for the first (2001) and last (2017) year.

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