Pension Issues
2023-01-27: Fx Times: Fairfax pension funds exposed to crypto collapse, by Richard Hronik
Two of Fairfax County's three employee pension funds were exposed to the bankruptcy of a cryptocurrency firm on Jan. 19. These risky crypto investment strategies were hidden from the public -- hardly reassuring for stakeholders, such as taxpayers and pensioners.
2019-07-16: AP: Virginia Pension Plan shortfall bad news for taxpayers
Virginia state and local governments may have to pay more each year to cover public employees' retirement costs. The Virginia Retirement System could lower its expected rate of investment returns from 7% to 6.75% or 6.5%. The fund said it earned a 6.5% last fiscal year.
2019-03-21: AP: Virginia pension fund in trouble if market meltdown hits, by Alan Suderman
Virginia's pension fund is in a worse position to handle a market meltdown than it was before the Great Recession more than a decade ago, according to a recent state report. That's despite a 10-year bull market and pension reform efforts by lawmakers to make the fund more resilient.
2018-12-04: Fx News: Fairfax board adopts two proposed pension changes, by Truman Lewis
The Fairfax County Board of Supervisors today approved minor changes to the county's retirement system -- 1) abolish the pre-Social Security supplement; and 2) not automatically increasing the retirement annuity by 3% annually. The Board rejected 1) increasing the Minimum Retirement Age from 55 to 60; 2) increasing the Rule of 85 to the Rule of 90; and 3) increasing the Salary Averaging Period from 3 years to 5 years.
2018-12-04: FxCo: Fairfax BOS Takes [Baby] Step in Addressing Pension Reform, by Pat Herrity
"Today the Board took another step in reforming the County's unsustainable pension cost by eliminating the pre-social security supplement for new employees. Unfortunately, the Board did not pass three of the other reforms proposed by County staff."
2018-12-02: Bacon's Rebellion: Fairfax Supervisors Face County's Monster Pension Crunch
Way back in the year 2000, Fairfax County's general-employee pension plan was amply funded at 109% of projected needs. But the funding ratio dropped severely during the last recession and has been hovering around 70% in recent years. Taxpayer groups are sounding the alarm and, astonishingly, the Board of Supervisors is actually studying proposals to address the shortfall.
2018-11-29: Sun Gazette: Fairfax employees, taxpayer advocates spar over pension proposals
Supervisors heard from more than 40 people at a three-hour-long Nov. 20 public hearing on the pension issue. County employee representatives claimed the crisis is contrived, while critics like FCTA' Arthur Purves warned the county's pension obligations are unsustainable in the long run. County supervisors will decide how to deal with the presented options on Dec. 4.
2018-11-20: FCTA: Pension Reform for Fairfax County Employees, testimony by Tom Cranmer
Testimony to the Board of Supervisors, plus suggested retirement age requirement changes to the Virginia code.
2018-11-20: FCTA: Fairfax County Pension Reform Testimony to BOS, by Charles McAndrew
2018-11-18: FCTA: Fairfax County pension eligibility changes explained, by Louise Epstein
2018-10-16: Fx News: Fairfax supervisors: hearing Nov 20 on pension reforms, by Truman Lewis
The Fairfax County Board of Supervisors today inched closer to making changes in its pension plans for new county hires, acting on a longtime argument by Supervisor Pat Herrity that Fairfax pension benefits are too generous. There will be a public hearing on November 20, 2018 to consider proposed amendments to the ordinances for the County's three retirement systems.
2018-10-05: Bacon's Rebellion: A Thoughtful Reminder of Another Pension Landmine
According to FCTA, the Fairfax County pension liability is now $5.6 billion. There are 400,000 homes in Fairfax County, so the liability amounts to $14,000 per household. The liability and the real estate tax will increase unless the retirement age is increased to 65 or 70 years of age -- as compared to the current 55 to 60.
2018-07-25: Fairfax Democrats refuse to address Pension Reform, by Supervisor Pat Herrity
The pension discussion took an unfortunate turn at our committee meeting on June 26, 2018, when the County's public employee unions presented petitions signed by all but one of the Democrat State Delegates and State Senators. The petitions asked that any changes to the pension plan be rejected and resorted to name calling and personal attacks on Chairwoman Bulova and me.
2018-06-06: Connection: Potential for Progress on Pension Reform, by Supervisor Pat Herrity
The Fairfax County Board of Supervisors finally appears poised to make additional changes to the county's unsustainable pension plan. After delaying action for the last three years, a number of options have been put on the table for the board to consider at its June 26 Personnel Committee meeting. (Read also: Fx Co's Pension Conundrum), by Pat Herrity
2018-04-13: Bacon's Rebellion: State Pension Problems Still Getting Worse
State pensions are in bad shape, and they're getting worse. Virginia is no exception to the broader trend. If there's any consolation, several other states are likely to hit the wall before we are. A pension crisis looks almost unavoidable for Kentucky, New Jersey, and Illinois -- and by "crisis", I mean a default on its pension obligations.
2018-04-03: FxCo: Retirement Workgroup Final Items for Consideration
General principles: 1) Reaffirm commitment to defined benefit plan; 2) New plan will apply to employees hired January 1, 2019 and beyond; 3) New plan must be sustainable over the long-run. (No fundamental changes to the Fairfax County retirement system; just some tweaks to numbers here and there.)
2018-01-26: Lux Libertas: Connecticut's S.O.S. - rising retirement costs
Connecticut mayors grappling with rising retirement costs and sinking economies this week issued a distress signal to lawmakers in Hartford: Save us from our public unions. Waterbury mayor Neil O'Leary, a Democrat, said his town's health care and pension costs make up 30% of its budget.
2017-10-03: Connection: Steps for Fx Co to Limit Unsustainable Pensions, by David Pritchett
Fairfax County can limit its unsustainable pension liabilities if it seeks serious policy options. But it has not. Four of five systems -- not the Virginia Retirement system -- are unduly generous. Here are six steps the County must undertake to correct this problem. ...
2017-07-xx: NVRBF: Fairfax County's Pension Conundrum, by Pat Herrity
Fairfax County is using an outdated and fiscally unsustainable compensation model that no longer meets the county's needs.
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-xx: AMAC: Our Plan to Fix Social Security
AMAC's proposal has three Prime Directives: 1)Guarantee an increase benefits for those with lower earnings, 2)Guarantee achieving solvency and ensure benefits continue, 3)Provide a means for all earners to have more income available at retirement through a complementary or supplemental Social Security Plus account (similar to the Chilean model).
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: McLeanCitizens.org: 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: McLeanCitizens.org: 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: Watchdog.org: 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.