Read the Beforeitsnews.com story here. Advertise at Before It's News here.
Profile image
By Reason Magazine (Reporter)
Contributor profile | More stories
Story Views
Now:
Last hour:
Last 24 hours:
Total:

Pension Reform Newsletter: Using Marijuana Revenue to Pay Pension Debt, Pension Reforms in Florida and North Dakota, and More

% of readers think this story is Fact. Add your two cents.


This newsletter from the Pension Integrity Project at Reason Foundation highlights articles, research, opinion and other information related to public pension challenges and reform efforts across the nation. You can find previous editions here.

In This Issue:

Articles, Research & Spotlights 

  • Analyzing Florida’s Proposed Pension Reform
  • North Dakota Pension Reform Should Prioritize Paying Down Pension Debt
  • Recreational Marijuana Revenues Could Help Pension Solvency in Montana
  • What Factors Impact Pension Reform?
  • Protecting Public Workers from Retirement Risks
  • Alternative Assets and Pose Risks to Pension Systems

News in Brief
Quotable Quotes on Pension Reform
Contact the Pension Reform Help Desk


Articles, Research and Spotlights

Analysis of Florida’s Proposed Pension Reform

As Florida’s unfunded pension liabilities have grown to $36 billion, the debate over potential reforms to the Florida Retirement System (FRS) pension plan continues. Reason Foundation’s analysis finds that over the next eight years, FRS’ employer costs are estimated to rise by $2.3 billion, which is the same amount the state currently spends on highway and bridge construction each year. The pension reform currently under consideration in the state legislature would limit future accrual of pension debt by directing all new workers, except public safety workers, to the state’s existing defined contribution plan. Unfortunately, despite this proposed change, the legislation would leave FRS nearly as vulnerable to market stresses as it is now.

Testimony: Pension Reform in North Dakota Should Tackle Pension Debt, Funding Risks

In an effort to address the state’s growing public pension debt, the North Dakota legislature is considering reform to the North Dakota Public Employees Retirement System (NDPERS). As currently written, the legislation—Senate Bill 2046—would close the current defined benefit plan to most new workers, diverting them to the existing defined contribution plan. The reform would also include additional payments to cut down on the system’s growing debt. In testimony given to the House Government Affairs and Veterans Committee, Reason’s Raheem Williams explains that while the reform would help the state by limiting financial risk and capping future liability accrual, more funding policy challenges would be needed to complete the job of putting NDPERS on a sustainable path.

Testimony: Using Marijuana Tax Revenue to Pay for Montana’s Unfunded Pension Liabilities

Earlier this month, the Montana legislature considered how revenues from the legalization of adult-use recreational marijuana could help fund the state’s retirement plans. Due to ongoing funding challenges, Montana’s two largest pension plans will likely not be able to rely on market returns to achieve full funding in the future. Reason’s Steven Gassenberger and Geoffrey Lawrence recently testified that tax revenues from legalized recreational marijuana sales could be appropriately directed as an ongoing payment for long-term pension liabilities.

What Factors Impact Public Pension Reform?

As state pension plan funding shortfalls and annual costs continue to grow, public pension reforms are becoming more common. While pension funding challenges are largely ubiquitous nationwide, some states have done more to address their public pension challenges than others. A new Reason Foundation policy brief by Grace College Professor Michael Bednarczuk, Ph.D., and Reason’s Jen Sidorova examines the factors that could encourage or stand in the way of pension reform across the states. The analysis finds that the variables with the largest positive effect on the likelihood of reform were passing a prior law or having several states pass a law in the same year. These findings reinforce the importance of continued, year-after-year efforts to fully address pension funding challenges.

Addressing the Retirement Risks Facing Today’s Public Workers

Pension Integrity Project senior fellows Rod Crane and Rich Hiller examine why many of the factors that affect an individual’s ability to have a financially secure retirement are not being considered by many state retirement plans. They emphasize the importance of accounting for all types of risk that both employers and members face in the design of public retirement plans. A clearer understanding of these risks could help policymakers build retirement options that better serve today’s employees, employers, and taxpayers.

Pension Plan Investments in Alternative Assets Can Pose Serious Risk to Taxpayers and Members

As returns from traditional investments in bonds and large-cap public equities have declined, public pension plans are increasingly moving towards greater allocations towards “alternative assets,” such as private equity. These assets can potentially provide higher returns but also come with higher risk and volatility. Reason’s Steven Gassenberger warns about the growing use of private equity in pension fund investment, noting the high fees paid to many of these investment firms and the general lack of transparency involved in these types of investments.

News in Brief

Pension Contributions Continue to Grow

An update to NASRA’s annual brief on public pension contributions is now available with results through 2019. This analysis uses historic and current contributions from over 100 state and local pension plans around the country. They find that aggregate contributions in 2019 grew by 4.9 percent (from $116.6 billion to $121.9 billion) since the previous year. Annual contributions in the aggregate are still lagging behind actuarially determined rates, but plans have improved in this area over the past decade.

Do Smaller Public Employer Pensions Spur More Saving?

A new brief by the Center for Retirement Research argues that workers are unlikely to change their saving habits in response to lowered pension benefits. Laura Quinby and Geoffrey Sanzenbacher of the Center expand upon a recent study to investigate the relevance of a simple lifecycle model, which assumes that workers will respond to a one-dollar decrease in their pension benefit with a one-dollar increase in their supplemental saving. They find that the actual effect upon supplemental saving is small, potentially due to low levels of additional financial resources by workers.

Quotable Quotes on Pension Reform

“This is a financial problem that will not go away without legislative action…Now is the time to address ERS [Employees Retirement System] to illustrate that Texas can continue to be fiscally responsible with taxpayer funds by paying down existing debt to save on future interest payments.”

­—Texas State Sen. Joan Huffman, sponsor of Senate Bill 321, in an April 19 press release

“Had we paid our full pension (payment) every year between ’96 and this budget, the number I would have put up this year would have been $800 million. If you do the math, we are, in our [fiscal year 2022] budget, paying $5.6 billion, in one year’s budget, for the delinquency of the past 25 years.”

—New Jersey Gov. Phil Murphy quoted in “Murphy’s promise of full public-worker pension payment breaks 25 years of underfunding,” NJ Spotlight News, March 15, 2021

“Texas taxpayers will ultimately have to cover the fund’s liability. The failure to address this problem today means it will be even more expensive for taxpayers to fix in the future. Plus, unfunded pension funds can wreak havoc on the state’s bond rating, which increases the cost of borrowing and makes it more expensive to operate state government every day.”

—Richard Jankovsky, president of the Texas Department of Public Safety Officers Association, cited in “Texas’ public servants need a healthy retirement system,” Austin American-Statesman, April 3, 2021

“I think we need to look at…really incrementally decreasing that rate of return. What we end up doing are these large drops, which sort of cost a lot of money to do. We should really look at getting down and getting the pensions to 7 percent, or lower than that…From a dollar and cents standpoint, that big of a drop is very hard for the city to handle.”

—Mike Gormany, New Haven City budget director, cited in “City Plans $17.5M Pension Fix Start,” New Haven Independent, March 31, 2021

Contact the Pension Reform Help Desk

Reason Foundation’s Pension Reform Help Desk provides information on Reason’s work on pension reform and resources for those wishing to pursue pension reform in their states, counties and cities. Feel free to contact the Reason Pension Reform Help Desk by e-mail at [email protected].

Follow the discussion on pensions and other governmental reforms at Reason Foundation’s website and on Twitter @ReasonPensions. As we continually strive to improve the publication, please feel free to send your questions, comments and suggestions to [email protected].



Source: https://reason.org/pension-newsletter/pension-reform-newsletter-using-marijuana-revenue-to-pay-pension-debt-pension-reforms-in-florida-and-north-dakota-and-more/


Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world.

Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.

"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.

Please Help Support BeforeitsNews by trying our Natural Health Products below!


Order by Phone at 888-809-8385 or online at https://mitocopper.com M - F 9am to 5pm EST

Order by Phone at 888-388-7003 or online at https://www.herbanomic.com M - F 9am to 5pm EST

Order by Phone at 888-388-7003 or online at https://www.herbanomics.com M - F 9am to 5pm EST


Humic & Fulvic Trace Minerals Complex - Nature's most important supplement! Vivid Dreams again!

HNEX HydroNano EXtracellular Water - Improve immune system health and reduce inflammation

Ultimate Clinical Potency Curcumin - Natural pain relief, reduce inflammation and so much more.

MitoCopper - Bioavailable Copper destroys pathogens and gives you more energy. (See Blood Video)
Oxy Powder - Natural Colon Cleanser!  Cleans out toxic buildup with oxygen! 
Nascent Iodine - Promotes detoxification, mental focus and thyroid health.
Smart Meter Cover -  Reduces Smart Meter radiation by 96%!  (See Video)

Immusist Beverage Concentrate - Proprietary blend, formulated to reduce inflammation while hydrating and oxygenating the cells.

Report abuse
Loading...

Comments

Your Comments
Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

MOST RECENT
Load more ...

SignUp

Login

Newsletter

Email this story
Email this story

If you really want to ban this commenter, please write down the reason:

If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.