Experiences of four states that moved from traditional defined benefit (DB) plans to cash balance or defined contribution (DC) plans show it did not address existing pension underfunding and increased costs for these states.
Tag: public pensions
According to Northern Trust, Corporate Employee Retirement Income Security Act (ERISA) pension plans had the best first quarter on a relative basis, while the Wilshire Trust Universe Comparison Service shows Taft Hartley defined benefit (DB) plans, which had the largest allocation to U.S. equities, posted the highest Q1 gain.
Employer contributions to public pensions fell below certain benchmarks for improving plan funded status, and the Society of Actuaries suggests a couple of reasons this may be so.
The study, which evaluated pensions against hypothetical 401(k) plans, finds 77% of teachers in six states will work long enough in the same retirement system to earn benefits of greater value and security from the lowest-tier pension, compared to an idealized 401(k) with low fees and no investment mistakes.
They are focused on reducing risk, which Connecticut State Treasurer Denise L. Nappier says is a priority for institutional investors who have a fiduciary obligation to invest pension assets prudently and to monitor and manage risks.
“The increase in global equity values for the 12-month period ending June 30, 2017 was a primary driver of the improved funding levels,” says Ned McGuire, at Wilshire Consulting.
The Implementation Guide answers questions about Statement No. 68, “Accounting and Financial Reporting for Pensions” and Statement No. 74, “Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans.”
The impact of investment of assets plus spending of pension checks by retirees in 2016 yielded a $1.3 trillion contribution to the economy and $277.6 billion to state and local revenues, according to research from NCPERS.
The lawsuit alleges investment firms sold investments to KRS that were “extremely high-risk” and produced “excessive fees, poor returns and ultimately, losses.”
The NIRS studied the case of Palm Beach, Florida, which it says offers “an important cautionary tale on the detrimental impacts of switching public employees from DB pensions to DC accounts.”
Public pension fund members surveyed expressed interest in more transparency about pension fund investments and investment returns.
A relatively large allocation to international equities in Public Funds helped them beat out returns for Corporate ERISA plans and Foundations & Endowments, according to Northern Trust.