Connecticut Governor Dannel P. Malloy wants towns to start paying something for teacher pensions:
Currently the state is responsible for funding, 100 percent, the Connecticut State Teachers’ Retirement System — the fund responsible for maintaining retirement benefits for over 36,000 retired and 50,000 active teachers, school administrators and their beneficiaries.
The governor said the state can no longer afford to have towns not contribute to the retirement fund for teachers.
I get the part about not paying $407 million. In New Jersey we have a long established history of payment by whim. But if Connecticut politicians also maintain a lapdog judiciary does it extend past the point of simply allowing them to shirk contributions all the way to forcing someone else (albeit the employers of the participants) to make those payments?
Since my last review of the Connecticut Teachers Retirement System the June 30, 2016 actuarial valuation has come out so it seemed like a good day for an update.
Kill Defined Benefit plans. They do not work when run by governments:
The main reason being that there are no funding rules so these plans all morph into pay-as-you-go arrangements at a level of benefits that taxpayers cannot possibly afford to pay so the participants suffer.
This handy chart links to websites and papers (all worth a read) from 28 think tanks that basically agree with that assessment.The chart was put together by the National Conference on Public Employee Retirement Systems (NCPERS) “The Voice for Public Pensions” which is supported by corporations and, according to Union Watch, run by unions:
And that’s how tax policy is formed in New Jersey – under deadline based on dodgy numbers with no time (or inclination) for even the slightest review which, in this case, would show:
Last March Standard and Poor’s Ratings Services lowered its outlook for New Jersey debt from stable to negative citing:
the potential impact of a lawsuit pending before the New Jersey Supreme Court that could require the state to reinstate cost-of-living (COLA) increases for retired public workers, which would boost the state’s $40 billion in unfunded liabilities higher and annual required payments even higher. (The state’s unfunded liabilities are $135.7 billion under a different accounting standard)
At the time Returers reported:
S&P’s change in outlook “reflects our view of the significant long-term pressures the state is under related to its postemployment benefits and the potential for New Jersey’s situation to worsen over the next year or two based on current litigation and proposed legislation,” S&P analyst John Sugden said in a report.
That COLA decision came out today.
We have gone from:
Wrapping up the 2016 Enrolled Actuaries meeting it basically came down to three main topics for me, all of which came up on the last day:
- new DOL fiduciary rules effective April, 2017;
- plan document restatements of Defined Benefit plans likely not going to happen until 2018; and
- reining in new comparability cross-tested plans.
The final plenary session was all about the fiduciary rules and it came down to:
“if actuaries stay within their roles they would not be considered a fiduciary?”
which led to my question:
In my last blog I mentioned that there is no Internal Revenue Service (IRS) representation at this year’s Enrolled Actuaries meeting but that does not mean that there are no speakers who happen to also be employees of the IRS. For example, tomorrow there is Session 701 Dialogue with the IRS/Treasury described as:
A panel of high-ranking officials and experienced practitioners field your questions on a number of challenging issues. This is your chance to ask what you’ve always wanted to know about guidance. This session is not intended to address specific client issues.
- Kyle N. Brown U.S. Department of the Treasury
- Linda Marshall Internal Revenue Service
- Harlan M. Weller U.S. Department of the Treasury
- Carolyn E. Zimmerman Internal Revenue Service
However , anything said will be the views of the speakers, as they will make clear in the introduction, and not necessarily those of their employer whose views will still be up for speculation as Mr. Brown proved in a ‘Late Breaking Developments’ session he spoke at today where, according to my notes, he revealed: