Retirement News From Across The Country
Alabama
Public workers insurance costs fall below the national
average
For workers nationwide, the average annual premiums
employees paid this spring for employer sponsored health
insurance was $694 for single coverage and $3,281 for
family coverage, according to the Kaiser Family
Foundation in Menlo Park, Calif., and the Health
Research and Educational Trust in Chicago.
According to the
Birmingham News
state records, health insurance premiums paid by
Alabama's teachers and other public employees are much
lower than the average premiums paid by workers
nationwide.
Sate Finance Director Jim Main is now calling for
Alabama's public employees to pay more for health
insurance, since the state's cost of providing it for
about 209,000 public employees and retirees is expected
to reach $1.31 billion this year, an increase of 81
percent in five years.
Mac McArthur, executive director of the Alabama State
Employees Association, says 'workers in private industry
can get higher salaries than state workers, but the
benefits Alabama's employees get help make up for it.
Raising premiums would be bad policy in keeping and
attracting new state employees.'
California
Cut in interest payment to CalSTRS sought from the
Supreme Court
Four years ago the dot- com bust eroded state tax
revenues and left the state with a record $34 billion
budget deficit. Lawmakers and then Gov. Gray Davis
withheld a $500 million payment to the California State
Teachers Retirement Systems (CalSTRS), one of many
budget cutting moves.
CalSTRS later sued in Sacramento Superior Court and won
the right to recover the funds, plus 7 percent annual
interest totaling about $155 million today.
The state appealed and lost, when Sacramento's 3rd
District Court of Appeals upheld the ruling on the $500
million and raised the interest rate to 10 percent,
putting the total estimated interest at more than $200
million.
According the
Sacrament Bee,
the Schwarzenegger administration then agreed to tap the
state's $4.1 billion reserve and repay the $500 million
earmarked for a special supplemental fund for 63,000
retired schoolteachers, who use the benefits to protect
their pensions against inflation. The state however
did not pay the interest.
Faced with a lean state budget this year, the
Schwarzenegger administration is slated to ask the
California Supreme Court to cut the millions of dollars
in interest owed to CalSTRS.
Georgia
Georgia Pensions in Trouble
According to the
Atlanta Journal Constitution
Georgia's employee retirement system is facing a
potential $16 billion shortfall in coming years as baby
boomers continue to retirement and may have to scale
back the program for future sate employees.
Officials say they may have to change the program so it
can continue paying full benefits in the future for the
70,000 state employees in the system and the 32,000
retirees already receiving benefits. In response the
retirement board approved a reduced cost of living
increase early in October.
The retirement system problems come on top of an
estimated $15 billion to $17 billion cost over the next
30 years to pay for health care benefits promised to
tens of thousands of retired teachers and state
employees.
Michigan
New Teachers Will Pay More for Retirement
According to the
Detroit Free Press,
though strongly opposed by the Michigan Education
Association, new rules adopted by the Legislature will
force newly hired teachers in Michigan to contribute
more to their state pension and worker longer to get
maximum health benefits once they retire.
Teachers and other school employees now pay about 4
percent of their salary into their future pension.
Under the new legislation, those hired in July 2008 or
later will pay about 6 percent more than their veteran
colleagues.
The Legislature also passed health care coverage bills
under which new employees won't qualify for retirement
health care premiums until they've worked 10 years, at
which 30 percent of their premiums would be covered.
Teachers will then get 4 percent more of their premiums
covered for every year past that.
New York
Teachers union announce landmark retirement deal
City Hall and the New York teachers union announced a
landmark deal October 17th to let educators
retire early with a full pension in exchange for a merit
pay system largely tied to student test scores.
Under the agreement, current public school teachers
would be able to retire with full benefits at 55 if they
have logged 25 years in the classroom and agree to make
large pension contributions.
In exchange for the offer - which needs state approval -
the union will sign off on a plan to give teachers
bonuses if their schools significantly lift student test
scores, improve attendance and meet other criteria. The
average bonus would be $3,000 per teacher.
According to the
New York Daily News,
funded with $20 million form a private business group,
the Partnership for New York City, and two other
foundations, the bonuses would flow to teachers in as
many as 200 struggling schools as soon as this year.
While education pension costs top $1.5 billion, city
officials say the new deal won't cost taxpayers
anything. The change will be paid for by increased
contributions to the pension plan by teachers who choose
to participate - and those who will start their teaching
careers next year.
City Will Help Pension Plans Build
Housing for Teachers
According to the
New York Times,
New York City will be helping to finance apartment
buildings designed to provide relatively low cost
housing for teachers and educators.
The new development, with 234 apartments, is to be
completed in about two years and will carry monthly
rents ranging from $806 for a studio to $1,412 for a
three bedroom apartment. The announcement comes as the
city struggles to entice teachers with sought after
skills to New York. Last year, grappling with the high
cost of housing, New York began offering subsidies of up
to $14,600 to lure math, science and special education
teachers.
To be eligible for a lottery for an apartment,
applicants cannot earn more than 110 percent of the area
median income, which is $76,000 for a family of four.
New York Pension Fund
Faces a Federal Inquiry
The Security and Exchanges Commission has begun an
inquiry in oversight of the New York State pension fund,
which is drawing increasing scrutiny over claims that
investment firms paid friends and relatives of former
Comptroller Alan G. Hevesi in exchange for business.
According to the
New York Times,
the SEC is looking into potential civil violation of
federal securities laws. The move follows an
investigation of the same issue begun by the New York
attorney general, Andrew M. Cumo, in January, along with
an inquiry by P. David Soares, the Albany County
district attorney.
The S.E.C. staff is conducting an informal inquiry; a
formal investigation, which would give the investigators
subpoena power. The staff review involves transactions
between investment firms and the $154 billion state
pension fund during Mr. Hevesi's tenure and the role of
intermediaries that help facilitate the deals. The
staff recommends to the commission whether to launch a
formal investigation.
The case is becoming one of the most extensive public
integrity investigations in New York in decades, with
federal, state and local investigators now involved. It
has also brought new attention to the almost unchecked
authority that New York state gives the comptroller in
investment decisions for the fund.
North Carolina Pension
Fund Deemed Healthy
According to the
News & Observer,
North Carolina's $75 billion pension fund remains one of
the few state pension funds with sufficient assets to
cover projected payments.
North Carolina had 106.1
percent of the assets needed for future payments as of
December 31, 2006 according to an actuarial study by
North Carolina's Teachers' and State Employees
Retirement System. The average funding level for the
2006 fiscal year among state pension plans was 85.8
percent.
A study issued earlier this year by Standard & Poor's
found that the financial strength of North Carolina's
pension fund in 2005 ranked second in the nation.
Oregon
Oregon Pension Program Bounces Back
Four years after a meltdown, Oregon's pension program is
among the healthiest in the U.S.
According to the
Statesman Journal
Oregon's state pension system has returned to financial
health, after a series of pension reforms and five years
of sterling investment returns.
A financial wreck in 2003 with a long term shortfall
approaching 17 billion, the Oregon Public Employees
Retirement System now is among the healthiest state
pension fund in the U.S. The shortfall dropped to $800
million by the end of 2006, and 2007 investment returns
are beating expectations.
Rhode Island
Rhode Island Considers a
Pension Change
According the
Providence Journal,
Rhode Island House Speaker and Governor are in the midst
of plans to move the state retirement system from a
defined benefit to defined contribution system.
In a meeting on October 11th with the state
retirement board a study commissioned by the governor,
and prepared by the retirement boards actuary was
presented. The study stated that moving the state
retirement system to a 'defined contribution system'
would cost the state at least $151 million next year,
but lead to substantial savings in the long term.
While House Speaker, William Murphy, says his next step
will be analyze some alternative proposals, he has also
said he would create a special commission in January to
study the issue further and expects the commission to
produce legislation to change the systems before the end
of session.
