Archive for the ‘Private Sector Pensions’ Category

Chicago Symphony Pension Games Update

According to Crain’s Chicago Business:

Today marks the 37th day of the Chicago Symphony Orchestra musicians’ strike. They walked off the job March 10 and on April 5 rejected the Chicago Symphony Orchestra Association’s “last, best and final” offer for a settlement.


Under the new defined-contribution plan, CSOA would contribute the equivalent of 8 percent of the musicians’ base salary annually, at a cost of at least $1.4 million a year. That’s in addition to its current pension-fund obligation, $35 million over eight years.

We looked at Chicago Symphony Pension Games last month but being a June 30 year-end an updated 5500 form had to be submitted by today. It was and there were more games:

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SECURE Act Summary

The Ways & Means Committee passed H.R. 1994, the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019, legislation that expands opportunities for Americans to increase their retirement savings and improves the portability of lifetime income options from one plan to another.”

Here is my précis of some of the provisions that matter to me:

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Chicago Symphony Pension Games

The Chicago Symphony Orchestra went on strike last week:

And it appears to be all about the Defined Benefit pension:

On Friday evening, CSOA President Jeff Alexander wrote in an email to the musicians that the institution’s pension obligations came to $803,000 two years ago, have risen to $3.8 million this year, will reach $5 million to $6 million annually in coming years (according to projections) and will add up to $36 million over the next eight years.

“It’s an amount of cash that we just don’t have to put into the fund,” Alexander said in an interview Monday morning.

He cited two major reasons the pension contribution requirements are climbing: interest rates and mortality tables.

“When interest rates are very low, which they’ve been for the last 10 years, the payments into the funds have to be much higher. These are IRS calculations,” said Alexander. “About two years ago, the official mortality tables were updated, and, of course, people are living longer. And those two factors combined have changed the amount of money we have to put into the plan.”

What about the musicians’ charge that pension plans should have been better funded in the past?

“Hindsight is very good,” said Alexander. “I think the funding that was done at the time over the years — I wasn’t here, of course — was appropriate funding. Perhaps minimum required funding, which all the actuaries we have been dealing with have said (to do). Most companies in the ’90s and 2000s did the same thing — that was the trend.”

5500 filings tell a slightly different story….

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New Jersey: Looking To Decimate More Than Public Pensions

Tired of making money in your 401(k) plan? New Jersey can help with that. According to

A proposal to create a state-run retirement system for private-sector workers in New Jersey whose workplaces don’t offer employer-sponsored plans is now in Gov. Phil Murphy’s hands.

The legislation would require that businesses with 25 or more employees that don’t offer a retirement plan make the new payroll deduction available and encourages businesses with fewer than 25 employees to do the same.

Private-sector employees would be automatically enrolled in the “New Jersey Secure Choice Savings Program” at 3 percent of their pre-tax income unless they choose to enroll at a different level or opt out altogether.


A board of officials would manage the fund’s investments, and the bill restricts investment and management fees to not exceed 0.75 percent of the fund balance.

The state would likely have to front the cost of establishing and administering the plan and would be allowed to pay itself back through those administrative fees, according to the bill.

Obviously this is Wall Street looking to cash in but consider who they have fronting this scheme.

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Breaking News: PBGC To Take Over Sears Pensions

Per a press release this morning:

The Pension Benefit Guaranty Corporation [PBGC] is taking steps to assume responsibility for Sears Holdings Corporation’s two defined benefit pension plans, which cover about 90,000 people. The national retail chain headquartered in Hoffman Estates, Illinois, operates through its subsidiaries, which include Sears, Roebuck and Co. and Kmart Corporation.

Sears filed for Chapter 11 protection on October 15, 2018. PBGC is stepping in to become responsible for the company’s two pension plans because it is clear that Sears’ continuation of the plans is no longer possible.

PBGC has worked with Sears for several years to improve funding for the company’s plans. PBGC estimates that the Sears’ plans are underfunded by $1.4 billion leaving them 64 percent funded.

PBGC is seeking to terminate the plans as of January 31, 2019. The agency will become responsible for the pension plans when Sears agrees or a court orders plan termination.

This is the distress termination we were expecting:

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What Stock Drop Means for Pensions

The 6% drop in the Dow in 2018 (from 24,834 to 23,327) could have been worse, according to CNBC, if not for pensions funds:

Even with the pension-fueled comeback last week, losses in 2018 will have repercussions since plans, in chasing returns, have increasingly moved into stock-related investments and were expecting to make, not lose, 6% in value annually.

What I expect:

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Marsh Lesson for Pensioners

According to Xania News:

As a grocery chain is dismantled, investors recover their money. Worker pensions are short millions.

The unpaid pension debts mean that some retirees will get smaller checks. Much of the tab will be picked up by the government’s pension insurer, a federal agency facing its own budget shortfalls.

“They did everyone dirty,” said Kilby Baker, 70, a retired warehouse worker whose pension check was cut by about 25 percent after Marsh Supermarkets withdrew from the pension. “We all gave up wage increases so we could have a better pension. Then they just took it away from us.”

Let’s take a closer look.

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