Tag archive for Public Pensions

Going nuclear in Detroit….

Detroit financial manager Kevyn Orr has filed a plan to reduce the city’s debt and exit bankruptcy, formerly dubbed the plan of adjustment,and it has few Orr 1surprises, largely doing what Orr has said he would do. But that doesn’t mean it isn’t unprecedented, nonetheless. Orr has, in the last few months, shaken up the municipal finance business with his lawsuits challenging financing techniques previously considered sacrosanct, so much so that one municipal bond firm accused him of going nuclear…

Rahm, Do Something!

Reading the Chicago Tribune these days evokes memories of the New York Post in the early 1990s, when its coverage of New York’s thumbnail dinkinsmany crises–high crime, deteriorating schools, dirty streets, aggressive panhandling–prompted the paper finally to cry out to Mayor Dinkins after one particularly bloody week, “Dave, Do Something!” The Tribune is currently in the midst of a series about Chicago’s many problems and is so down on the city’s leadership (“Decades of abuse and neglect by its political class leave Chicago with insufficient funds for necessities, let alone for smart extras”) that the Tribune is now asking readers (“Your proposals needed”) for their ideas on how to fix the city. Meanwhile, it continues to feature stories of an exodus out of the Windy City…

Ohio officials defend the indefensible in pensions

Last year I described how elected officials often take part in the very same government pension systems that they are now being asked to reform, and frequently take advantage of theĀ  loopholes we criticize rank-and-file workers for exploiting. The Cleveland Plain Dealer recently asked a …

Battle over pension spiking brewing in the Bay Area

When Governor Jerry Brown and the California Legislature rushed through pension reform earlier this year (mainly as a fig leaf for the governor’s proposed tax increases on the November ballot), many of us argued that the legislation was a half-measure, making some useful progress on the low-hanging fruit, but failing to bring about the sort of comprehensive reform that is necessary to stave off a fiscal crisis. One area where Brown and company did do some useful work, however, was on pension spiking — the practice of sharply increasing pay in the last few years of a public worker’s tenure to artificially inflate their pension total. Now, one Bay Area county where the practice was ubiquitous is fighting the reform tooth and nail.&nbsp

New York’s latest pension pander

Are the New York City officials who run Gotham’s public-sector pension funds interested in competitive returns — or political pandering?

One win, one loss as California’s legislative session closes

There’s mixed news out of Sacramento today, as the California Legislature barrels toward the midnight deadline to close out its current session. On the upside, AB 5, a bill which would see the teachers unions dictating the terms of teacher evaluations, has died a merciful death. As I noted yesterday, this will leave the state’s education system still in need of reform, but thankfully spared from even further capture by the unions. The news on pensions, however — where Democrat-led “reform” looks prone for passage — is not nearly as heartening

Oakland will gladly pay you Tuesday for a public pension today

The city of Oakland, California has now made it official policy to live like there’s no tomorrow. At least that’s the only rationale sufficient to explain why the city of nearly 400,000 is dealing with one of the most insanely-constructed public pension systems in the nation by compounding its obligations.

Oakland, you see, erected a system in which benefits for public safety retirees and their widows were indexed to the pay scale of current employees (benificiaries could get up to a 2/3 match of present-day pay), meaning that pensioners would receive raises as time went by. Having failed to fund those extravagant benefits, however, the city is now taking on ever more debt rather than addressing the problem directly.

California’s public pensions head over the cliff

Earlier today, reality slapped California’s public sector across the face. Here’s the report, fresh off the AP wire. Note the bolded section and its dire implications for state finances:

The nation’s largest public pension fund reported a dismal 1 percent
return on its investments, a figure far short of projections that will
likely add pressure on California’s state and local governments to
contribute more, officials said Monday.

The California Public Employees’ Retirement System reported its
returns for the fiscal year that ended June 30. The 1 percent return is
well below its projected annual return of 7.5 percent

California’s public universities facing huge unfunded pension crisis

While the pension problems of K-12 teachers dominate the headlines in California, yet another huge unfunded liability is taking shape in the University of California system, home to the state’s flagship universities, such as UCLA and Berkeley. The culprits? You guessed it. A huge wave of impending retirements (which will more than triple the current number of pensioners), a tendency towards excessive benefits (more than 2,000 former employees have six-figure pensions, with a former UCLA dentistry professor topping the list at $337,000 a year), and a long history of failing to fund the obligations.

Can you handle the truth?

TIP Logo.pngLast year, Rhode Island General Treasurer and 2011 Manhattan Institute Urban Innovator award winner Gina Raimondo crisscrossed the Ocean State with a simple message to lawmakers, citizens and public employees: the public pension problem was about math, not politics. Her successful pension reform proposal was based on a report entitled “Truth in Numbers,” which shined a light on the real costs and liabilities facing her state. It was an honest effort that forced everyone to take a hard look at the facts, and in the end, take action. Now a national, non-partisan coalition of policy organizations and citizen groups – Truth in Pensions - has come together to demand the same sort of transparency in state and local government pension accounting.