PPR (3) Real Result

What will the ballyhooed reforms of the Pennsylvania retirement system do for the plans? Based on valuation reports for the Public School Employees’ Retirement System (PSERS) as of June 30, 2016 and the  State Employees’ Retirement System (SERS) as of December 31, 2016 as filtered through US Census data we get these pertinent numbers:

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PPR (2) Choices

At 3 pm today the bill will be signed by the governor and, according to the actuarial note on the Pennsylvania Pension Reforms (PPR), the state will save some money on contributions and eventually reduce unfunded liabilities. This will be accomplished by having future participants make larger employee contributions for lower benefits.

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Pennsylvania Pension Reform (PPR) – (1) Introduction

Based on a study of depletion dates Pennsylvania state retirement systems area fairly close to New Jersey in negative cash flow and remaining assets:

But whereas New Jersey politicians dawdle and deceive (primarily themselves), those in Pennsylvania just passed a pension reform bill and this is how it was summarized by the press:

Most state employees and all school employees hired after Jan. 1, 2019, will get half their pension benefits from the existing defined-benefit plan and half from a new 401(a) defined-contribution benefit plan, according to Pensions & Investments. Employees in high-risk jobs like police and corrections officers will be able to retain their defined-benefit plan.

Employees hired after Jan. 1, 2019, will have the option of taking all their benefits from the 401(a) plan. Current employees will also be able to opt into the hybrid arrangement.

The new hybrid arrangement will cut management fees by a combined $3 billion, as well as lowering the taxpayer’s pension risk by about two-thirds, according to a report from the state’s Independent Fiscal Office.

That report runs 132 pages with the second page containing the crux:
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Pension Byrne

I submitted a letter to the Star Ledger which is what led me to pick up today’s paper (since letters are no longer online at nj.com). I did not find my letter* but there was a letter from Thomas J. Healey, co-chair with Tom Byrne of the  Pension and Health Benefits Commission that objected to an op-ed written by Charles Wowkanech blaming the chairman of the State Investment Council (also Tom Byrne) for the public  pension funding crisis.

There were conflicting numbers about how New Jersey fared with their investment returns as compared to other unidentified plans over varying periods but what struck me was an accusation of Wowkanech’s that I disagree with:

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Breaking News: Supreme Court Rules on Church Plans

Today the United States Supreme Court released its ruling in Advocate Health Care Network v. Stapleton and it was unanimous:

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New Low In NJ Pension Issue

After months of mindless politicking we get to the weekend before a primary election in New Jersey and it’s all about who will win with only token (and obviously misinformed) references to real issues:

Yes that is a state senator speaking and among the inconvenient facts he appears to be completely ignorant of:

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Illinois Down; New Jersey Out

According to Bloomberg:

Illinois had its bond rating downgraded to one step above junk by Moody’s Investors Service and S&P Global Ratings, the lowest ranking on record for a U.S. state, as the long-running political stalemate over the budget shows no signs of ending. S&P warned that Illinois will likely lose its investment-grade status, an unprecedented step for a state, around July 1 if leaders haven’t agreed on a budget that chips away at the government’s chronic deficits. Moody’s followed S&P’s downgrade Thursday, citing Illinois’s underfunded pensions and the record backlog of bills that are equivalent to about 40 percent of its operating budget. Illinois hasn’t had a full year budget in place for the past two years amid a clash between the Democrat-run legislature and Republican Governor Bruce Rauner. That’s left the fifth most-populous state with a record $14.5 billion of unpaid bills…

Illinois could have gotten the money to pay those $14.5 billion in bills had they followed New Jersey’s lead.

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