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Pension Issues

Pension Issues

2017-07-15: Bearing Drift: The Pension Plan That Ate Fairfax County, by Jay McConville
For decades, alarms have been raised about the financial liabilities associated with "defined benefit" pension plans. Fairfax County has unfortunately not been listening. In fact, the County pension system is an outdated and ineffective system that fails to recruit, retain, and reward quality employees that has simultaneously amassed an unfunded liability of $2.4 Billion.

2017-04-28: Fx Times: Fairfax County debates employee pension reform, by Angela Woolsey
The benefits currently offered through Fairfax County's employee pension plans are financially unsustainable, Springfield District Supervisor Pat Herrity says. Employee retirement plans sparked more debate than any other subject, rivaled only by the county's approach to Metro, at the Board of Supervisors' budget committee meeting on April 21.

2017-04-06: FCTA: Fairfax County needs to Fix its Pension Problem, by Charles McAndrew
The pensions in Fairfax County are currently unsustainable. The county needs to raise the retirement age and adopt something similar to the Federal Government's "FERS" pension plan.

2017-03-03: Sun Gazette: MCA Seeks Independent Task Force on FCPS Pensions, by B. Trumpeter
The McLean Citizens Association (MCA) board of directors passed a resolution March 1 urging the Fairfax County School Board to establish an independent task force that would examine ways to make the school system's retirement plans financially sustainable, in time for the fiscal 2019 budget recommendations.

2017-01-27: WaPo: Rising pension costs a growing problem in Fairfax Co., by Antonio Olivo
With pension costs eating up a growing proportion of Fairfax County expenses, officials are weighing whether to phase out a unique program that pays a small additional stipend to employees who keep working after reaching retirement age.

2017-01-04: Sun Gazette: Fairfax needs to own up to pension liabilities, by Louise Epstein
An October 2016 study by Boston College found that Fairfax had fifth worst ratio of public-pension costs to local revenues among the 50 largest U.S. counties. Reasonable defined-benefit pension plans are offered by every other local government and school district in Virginia. But Fairfax pension plans far exceed these state requirements, and are not sustainable.

2017-01-04: Resolution on Fairfax Co Pension Plans -- Fix by FY2019
McLean Citizens Association urges the Board of Supervisors to take the following steps to reduce the growth in the County's future obligations for retirement benefit payments. ...

2017-01-04: Overview of Fairfax Co Pension Costs -- Unsustainable
In FY 2016 alone, these pension plans cost the County almost $1.1 billion in a combination of cash payments of $531 million and additional pension debt assumed of $552 million.

2016-10-20: American Interest: Where Increased Education Spending REALLY Goes -- Pension debt
The vast majority of taxpayer contributions into teachers' pension plans are now used to pay down pension debt owed for past service rather than to pay for new benefits earned by today's teachers or for classroom supplies, equipment, and building upkeep.

2016-10-13: ALEC: Unfunded Public Pension Liabilities Near $5.6 Trillion
While state pension funds continue to assume returns of more than 7.3 percent each year, legislatures are not willing to put more money into the system to cover the gap between expectation and reality. With an economic recovery at its most dismal level since World War II, the bloated projections are driving up the levels of unfunded liabilities nationally.

2016-10-13: Boston College: Will Pensions and OPEBs Break State and Local Budgets?
This brief, based on a recent paper, provides a comprehensive accounting of state and local government liabilities for pensions and other post-employ-ment benefits (OPEBs) and the fiscal burden that they pose.

2016-09-24: Examiner: An easy solution to the teacher shortage, by Robert Fellner
There's an easy way for any state to solve its teacher shortage: Stop forcing them to pay for other people's retirement, and use those savings to provide an across-the-board pay raise instead.

2016-08-12: Bond Buyer: Why the Municipal Pension Crisis Will Worsen, by Robert Slavin
This article details the demographic shifts that now threaten to worsen the crisis as America ages. Subsequent installments focus on how municipalities have fared in court when they tried to cut pension benefits; political gridlock over pension reform; and bondholders' futility as they've squared off against pension funds in bankruptcy court.

2015-06-15: Examiner: Public pensions about to crush taxpayers, by Steven Malanga
Over the years, legislators and state courts had granted unusually strong protections to government worker pensions, far greater than the kinds of protections that private workers enjoy. That has made cutting the cost of pensions difficult, if not impossible, in some places with the deepest debts.

2015-04-01: City's bad decisions sink public pensions-- Jeannette, PA
Despite raising taxes in 2014, the city has a growing pension deficit. Rick Dreyfuss, a retired actuary, favors a switch to 401(k)-style defined-contribution plans, which eliminate the political incentives to underfund pension systems or over-promise benefits.

2015-03-13: Fx Free Citizen: ERFC-2001 costs FCPS $206M/year vs 'Legacy', by Fred Costello
FCPS is currently trying to fill a $100M shortfall. Simply reverting to the pre-2001 version of the ERFC (Legacy) pension plan would eventually save $206M per year. (ERFC2001 was introduced during the housing bubble, when the County was flush with money, and was retained when the bubble burst.) ... See also Fred's report and his summary budget recommendations.

2014-12-21: WT: The coming pension meltdown, by Stephen Moore
Middle-class private-sector workers pay higher and higher taxes to fund public-sector pensions that are often twice as generous as what most workers will receive themselves. Some states are heading off this crisis by closing down open-ended pensions and putting public-sector union members in 401(k) plans that won't bankrupt the state or municipalities.

2014-10-01: Reuters: Judge grants Stockton bankruptcy relief... Pensioners must share losses.
The U.S. bankruptcy judge overseeing Stockton, California's municipal bankruptcy trial ruled that the state's public employee retirement system, known as Calpers, could be forced to absorb losses along with other creditors.

2014-07-23: Times-Dispatch: Va. pension fund not so flush (Also see: Public pensions in Va.)
Virginia's taxpayer-backed employee pension fund may have been too clever, depressing its returns during a historic bull market. And how did Eric Cantor's wife benefit from the current strategy?

2014-06-25: GASB Improves Pension Accounting and Financial Reporting Standards
The Governmental Accounting Standards Board (GASB) today voted to approve two new standards that will substantially improve the accounting and financial reporting of public employee pensions by state and local governments.

2013-01-01: FxCo: Fairfax County Employees' Retirement System Handbook
The Fairfax County Employees’ Retirement System was established to help provide you with financial security at retirement. This booklet summarizes your Retirement System ("System") as in effect on January 1, 2013.

2012-05-14: Harvard: Latest studies show growing pension peril
Recent studies and data compilation by the U.S. Census Bureau and other institutions detail the continued deterioration and ultimate long-term chance of failure of public pension systems within the overall local and state government fiscal crisis.

2012-01-xx: Fairfax County Post-Retirement Benefits Review
Fairfax County engaged Aon Hewitt in November 2010 to undertake a comprehensive review of the County Government's postretirement income and health benefits. Included were benefits for general County Employees, Police Officers, and Uniformed Services.

1998-04-xx: FERS: Federal Employees Retirement System (Overview of Benefits)
The Federal government long ago converted from the old Civil Service Retirement System (CSRS) to FERS, preempting a federal retirement crisis that now grips state and local retirement plans. FERS could serve as a guideline for state and local governments, who are having to deal with unsustainable retirement plans.