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News

Social Security’s Financial Outlook: The 2019 Update in Perspective

The brief’s key findings are:

  • Contrary to media reports, the 2019 Trustees Report shows little change overall:
    • Social Security’s 75-year deficit ticked down from 2.84 percent to 2.78 percent of payroll.
    • Trust fund exhaustion moved out by one year, to 2035, after which payroll taxes still cover about three quarters of promised benefits.
  • This shortfall is manageable, but action should be taken soon to equitably share the burden among cohorts, restore public confidence, and give people time to adjust.
  • The Report did include one noteworthy change: a big improvement in the financial outlook for the Disability Insurance program.

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Mayors Score Win in Lawsuit Over Troubled Retirement Plan Endorsement Deal

The U.S. Conference of Mayors for about three years now has been battling in court with a company that previously administered a retirement savings program for city employees that the mayors’ group agreed to endorse in exchange for royalties and fees.

Earlier this month, the mayors took a significant step toward prevailing in that lawsuit. A federal appeals court upheld a jury verdict the conference won at trial last year that called for the company, Great-West Life & Annuity Insurance Company, to pay the organization $8 million.

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Editorial | Rotten holiday

If Illinois is going to embrace another public-pension-contribution holiday, shouldn’t the public be informed of what the financial consequences will be?

There’s no reason anyone should have thought that new Illinois Gov. J.B. Pritzker would propose some kind of magic-bullet budget proposal as part of his 2019-20 plan.

After all, Pritzker is confronting the same problem that Illinois governors have encountered going back to the early 2000s — he and legislators are determined to spend more than the state has.

That’s why he proposed, as a big part of his $39 billion spending plan, diverting $838 million that was to be used for public-pension contributions to support other spending plans.

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Officers tell of deciding to get help

Chicago police Officer Cory Chapton says he finished work one day around 2 p.m., got into his car outside the West Side’s Harrison District station and sat in the parking lot for hour after hour “contemplating how do I get rid of this pain?”

He thought about ending his suffering as the afternoon stretched into the evening and then into the following morning. It wasn’t until 5 a.m. that he drove off. Fifteen hours had passed.

“I’m done. I’m tired. I don’t want to deal with this no more,” Chapton recounts in a new video produced by the Chicago Police Department. “You get to that point that,” he says, pausing for several seconds, “just end it all. Forget it.”

Superintendent Eddie Johnson; his predecessor, John Escalante; and Tina Skahill, formerly one of the department’s highest-ranking black women, joined Chapton in going public with the emotional struggles they encountered before mustering the courage to seek help.

The video, produced as part of a series aimed at encouraging officers to seek mental health support, comes as the department confronts a cluster of seven officer suicides since July.

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Pew: Hawaii’s State Pension Ready to Withstand Recession

Two years after initiating pension reforms that included increased contributions and regular stress testing, the funding projections for Hawaii’s state retirement system are on a “better trajectory,” according to a report from The Pew Charitable Trusts.

Pew said it independently examined Hawaii’s stress testing analysis and found the increased pension contributions required by the 2017 reforms should protect the system from insolvency.

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California’s Supreme Court upholds pension rollback

SAN FRANCISCO (AP) — The California Supreme Court on Monday upheld a decision by state lawmakers to roll back one way for public workers to pad their pensions, but avoided ruling on the larger issue of whether retirement benefits can be taken away once promised.

At issue in the unanimous decision was a provision of a 2012 pension reform law that ended the ability of public workers to pay for more years of service for a more lucrative pension when they retire. The law, backed by former Gov. Jerry Brown, sought to rein in costs and end practices viewed as abuses of the system.

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6 Ways Retirement Has Changed Over the Past 25 Years

Twenty-five years ago, Kiplinger’s Retirement Report launched to help readers enjoy a richer retirement. Our first issue, published in February 1994, offered guidance on timely issues of the day, such as how to take advantage of the home-sale-profit exclusion (then $125,000) and how to comply with new rules that for the first time required a receipt for charitable donations of $250 or more. Some advice, such as how to figure tax on Social Security benefits, proved to be evergreen.
 
 

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What Rhode Island can teach us about pension plunder

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What Polarized Government Means for Tax Policy in 2019

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How Have Workers Responded to Oregon’s Auto-IRA?

The brief’s key findings are:

  • Since many workers lack retirement plans at work, some states are setting up programs that require employers without a plan to enroll workers in an IRA.
  • Oregon was the first state to launch its auto-IRA and is now providing initial data on how workers and employers have responded.
  • On the positive side, a majority of workers are not opting out and are staying with the default contribution rate of 5 percent.
  • However, Oregon – as the first adopter – has also experienced delays in getting the payroll deductions up and running.
  • On balance, the program appears to be off to a promising start.

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