pension

| |

Grim Facts Support Defined Benefits

Byuclafaculty

Inside Higher Ed today points to the issue of encouraging retirement of senior faculty and notes a report by the American Council on Education (ACE) about legal issues surrounding age discrimination, etc. Both items discuss the history of federal age discrimination law including the ending of mandatory retirement ages for faculty. Although the ACE report mentions that there are two types of pension plans – defined benefit and defined contribution – it doesn’t emphasize the obvious point. There is no particular retirement incentive under defined contribution plans, which are basically tax-favored savings accounts. You can continue to accumulate contributions to…

| | | |

Action Needed Before We Get Boxed In on Pensions in 2012

Byuclafaculty

One impact of the recently-enacted state budget is that – because it was done without Republican support – there will be no special election this calendar year and, therefore, no propositions dealing with public pensions. In 2012, however, there could be pension-related items on the ballot. California senate leader Darrell Steinberg had this to say about what the legislative Democrats might put on the ballot: Steinberg pointed to Gov. Jerry Brown’s proposals to eliminate purchase of air time, prohibit so-called pension holidays and retroactive pension increases and ban payment of pension benefits to employees who are convicted of a felony…

| |

Longevity is a Mixed Blessing (for the Pension)

Byuclafaculty

From time to time, the actuarial assumptions underlying the UC pension plan are re-examined by an outside consultant. For the July Regents meeting, the agenda includes officially changing various assumptions in the light of experience, the net of which raise the normal cost of the plan (by 1%) and the unfunded liability (by 3.7%). The main factor raising costs is a finding that participants are living longer. Full report at http://www.universityofcalifornia.edu/regents/regmeet/jul11/f4.pdf

| |

Republicans Offer Public Pension Proposition But Can’t Surmount 2/3 Hurdle

Byuclafaculty

Once California legislative Republicans were cut out of the budget process, they lost their ability to negotiate a pension proposition to be put on the ballot. Of course, such propositions can be placed on the ballot via initiative. But since there is no special election being called to deal with tax extensions, any such initiative would likely have to await until 2012. Republicans have asked the legislature to put a pension proposition on the ballot. But they would need to overcome a 2/3 vote hurdle which won’t happen with a Democratic majority. Nonetheless, the proposal indicates what Republicans might have…

| | |

For $200, You, Too, Can File a Pension Initiative!

Byuclafaculty

There are potentially serious threats via the direct democracy process that could override the Regents’ December action on the UC pension. But there are also initiatives on pensions (and other public issues) that are filed with no prospect they will go anywhere since the authors don’t have the $1-$2 million needed to hire signature-gathering firms. Here is an excerpt from a recent example that is now pending at the Attorney General: …The members of the retirement board of a public pension or retirement system shall on and after January 1, 2016, invest and maintain at least 85 percent of the…

| | | |

State Budget: Running the Clock

Byuclafaculty

If you are wondering what is happening to the state budget, it appears that the closest analogy is the point in the film High Noon in which the train carrying the Bad Guy arrives at noon. After he arrives, there will be a confrontation/shoot-out with the Good Guy. In the case of the state budget, however, it is midnight – not noon – that is critical: midnight on June 30. At that point, the fiscal year 2010-11 ends and there is no budget to replace it. Also, the taxes that the governor wants to extend expire so that any ballot…

| | |

Anyone know what Regent Crane said? Inquiring Minds Want to Know

Byuclafaculty

Anyone know what Regent Crane said about pensions at this fair and balanced seminar at the Hoover Institution? (Scroll down) Hint: It might be good to find out. From the Hoover Institution website: http://www.hoover.org/news/83027 June 20, 2011 State and Municipal Fiscal Default Workshop On June 15–16, 2011, scholars and practitioners gathered for the State and Municipal Fiscal Default Workshop at the Hoover Institution. Experts from the fields of public policy, economics, finance, law, and state and local politics consulted about the nature of the problem, the current legal structures, and the possibility of legislative or other reform to avert the…

| | | |

No Way San Jose

Byuclafaculty

There has been a concern at UC that some future ballot proposition might sweep UC into a statewide public pension change that would affect current employees, contrary to the Regents’ action on pensions last December. The state attorney general, Kamala Harris, recently raised possible objections concerning a San Jose city plan that would affect current employees there. Whether she would challenge a ballot proposition that had similar effects at the state level is unknown. From the San Jose Mercury-News of 6/21/11: San Jose Mayor Chuck Reed’s proposal to declare a fiscal state of emergency and seek a ballot measure to…

| | | |

Some Mental Reservations on the State Budget: Time to Reconsider?

Byuclafaculty

News accounts this morning are full of the budget drama in Sacramento and whether Governor Brown will get the four Republican votes to put tax extensions on the bracket. The accounts use the usual metaphors. Brown wants a budget with “no gimmicks.” Anything else is “smoke and mirrors.” Etc., Etc. However, the reason Brown might now possibly get the needed GOP votes is that Republicans think that if tax extensions are on the ballot, they will be defeated. In that case, Brown will have made pension, spending cap, and regulatory concessions without getting his extensions. Lost in this reporting is…

| |

Document indicates GOP price for cooperating with governor

Byuclafaculty

The Republican prices for the votes the governor needs to have his budget passed with temporary tax extension until the extensions get on the ballot are listed below. There is some ambiguity about the pension although it definitely covers UC. The pension cap may cover current employees, not just new hires. (It’s not clear to yours truly.) Also as part of a tentative deal is a state spending cap and other provisions. As written, the pension provisions seem to define the kind of part-time recalls to retired faculty as “double dipping” and thus would kill such arrangements. No one would…