News

News

Pensions Fuel Kentucky’s $54 Billion Debt

Kentucky is more than $54 billion in debt, with estimated unfunded retirement benefits accounting for more than 80 percent of that figure.

Full Article

Read more

How Does Delayed Retirement Affect Mortality and Health?

Older Americans have been retiring later for a number of reasons, including jobs that are becoming less physically demanding, the shift from defined benefit to defined contribution pensions, and changes in Social Security’s incentives. What are the implications of working longer for workers’ mortality and health? Answering this question is complicated, because work and health are jointly determined – healthy people with lower mortality tend to work longer. Previous studies looking at the causal effect of work on mortality and health have found mixed results and have tended to focus on the effects of early retirement, not delayed retirement. A simple assumption would be that the relationship between them is symmetric. But it is unclear that that assumption is correct – after all, people who decide to keep working are likely a healthier group than those who stop early. This paper uses administrative data from the Netherlands and exploits policy variation designed to delay retirement to explore the links between work and health outcomes.

Full Article

Read more

Public Sector HealthCare Roundtable Weekly e-News (01/30/2019)

Topics:
Senate Finance and House Oversight Committees to Hold Drug Pricing Hearings.
House Lawmakers Push New Bill to Repeal Cadillac Tax.
Federal Judge to Consider Effects of AHPs in Case Against Department of Labor.
Democratic Presidential Candidates Give Drug Pricing Policies New Momentum.

Full Article

Read more

Can California and NYC Afford Their Near-Universal Health-Care Plans?

Gov. Gavin Newsom and Mayor Bill de Blasio initiated ambitious plans this week to cover drastically more residents, including undocumented immigrants who are not currently eligible for subsidized insurance.

Can a city or a state afford near-universal health care? New York City Mayor Bill de Blasio and California’s newly sworn-in governor, Gavin Newsom, think so.

Earlier this week, both Democratic leaders initiated ambitious plans that would move their jurisdictions toward universal coverage, an idea that has gained traction in progressive circles thanks to support from leaders on Capitol Hill, including Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez.

The popular progressive platform permeated state and local politics in the midterm elections. Washington state came close to putting the matter before voters as a ballot initiative; it failed to get enough signatures to qualify. Newsom, meanwhile, campaigned on single-payer, a form of universal health care that has yet to be successfully implemented in any state because of cost concerns.

Full Article

Read more

State Retirement Systems Overview

CGFA staff has reviewed the State-funded retirement systems’ FY 2018 actuarial reports, which were issued prior
to November 1st, pursuant to P.A. 97-0694, the State Actuary Law. Under the State Actuary Law, the systems must annually submit a proposed certification for the following fiscal year prior to November 1st of the current calendar year. The State Actuary then must issue a
preliminary report concerning the systems’ proposed certification by January 1st. The State Actuary’s report must identify any recommended changes in actuarial assumptions based upon the review of the retirement systems’ actuarial assumptions.
Using the actuarial (smoothed) value of assets, the total unfunded liabilities of the State systems totaled $133.7 billion on June 30, 2018, led by the Teachers’ Retirement System (TRS), whose unfunded liabilities amounted to $75.3 billion. As the largest of the State systems, TRS accounts for approximately 56.3% of the total assets and liabilities of the five State systems combined. The State Employees’
Retirement System (SERS) had unfunded liabilities of $30.4 billion, approximately 22.8% of the total unfunded liabilities of the five systems, followed by the State Universities Retirement System (SURS) with unfunded liabilities of $25.9 billion, which represents 19.4% of the total unfunded liabilities. Table 1, on the following page, provides a summary of the financial condition of each of the five State
retirement systems, showing their respective liabilities and assets as well as their accumulated unfunded liabilities and funded ratios.

Full Article

Read more

KKR, Blackstone lose bid to dismiss Kentucky pension lawsuit

KKR, Blackstone Group and the firms’ founders must face a lawsuit alleging they failed to deliver hedge fund returns as advertised, a judge in Kentucky ruled Nov. 30 in a decision that might present new legal challenges for managers of alternative investments.
The lawsuit, filed in December 2017, claims large asset managers misrepresented expensive and risky “black-box” bundles of hedge funds as safe ways to generate high returns. The suit was filed on behalf of the $12.3 billion Kentucky Retirement Systems and state taxpayers. The plaintiffs group includes a sitting judge, a retired state trooper and a firefighter.

Full Article

Read more

State and Local Public Plans Database

The Public Plans Database (PPD) currently contains plan-level data from 2001 through 2017 for 180 pension plans: 114 administered at a state level and 66 administered locally.  This sample covers 95 percent of public pension membership and assets nationwide.  The sample of plans is a carry-over from the Public Fund Survey (PFS), which was constructed with an eye toward the largest state-administered plans in each state, but also includes some large local plans such as New York City ERS and Chicago Teachers.

The PPD is updated each spring from data available in the most recent Comprehensive Annual Financial Reports (CAFRs) and Actuarial Valuations (AVs). Intermediate updates may occur when new variables are added or data errors are corrected.

To conduct an in-depth analysis requiring full access to the database, download the full PPD.

Full Article

Read more

An Update on Medicare’s Finances

The brief’s key findings are:

  • The headline from the 2018 Trustees Report was an earlier depletion date for the Hospital Insurance (HI) trust fund, suggesting Medicare faces growing trouble.
  • However, the trust fund reserves are small compared to HI expenditures, and the HI component only accounts for about a third of the Medicare system.
  • In fact, Medicare’s outlook is considerably better than it was a decade ago, even under projections that assume policymakers curb some recent cost controls.
  • Despite the improvement, Medicare does face financing challenges because it:
    • has to operate within the very expensive U.S. health care system;
    • requires beneficiaries to pay substantial out-of-pocket costs; and
    • has some serious gaps in insurance protection.

Full Article

Read more

Dallas Police & Fire sues Buck over DROP administration, funding issues

Dallas Police & Fire Pension System filed a lawsuit against Buck Consultants, its longtime actuary and adviser, claiming the firm failed to provide proper counsel as the pension fund lost substantial sums of money due to a flawed DROP program.

The $2.1 billion pension fund faulted Buck for issues stemming from the pension fund’s deferred retirement option plan, which it adopted in 1993 after consultation with Buck. The program allowed members to contribute retirement funds while remaining on active duty, with a guaranteed rate of return of no less than 8%.

Full Article

Read more

In Less Than 10 Years, America Will Have 17 ‘Superaged’ States

Federal, state and local government officials haven’t been talking much during the midterm election cycle talk about the fiscal stresses governments face from aging populations, but it will be difficult not to discuss it more in the coming years.

According to the U.S. Census Bureau, by 2026 unprecedented aging demographics will push 17 U.S. states into a category none are currently in: “superaged.” That includes Florida, Michigan, Pennsylvania and Ohio.

Full Article

Read more
Top