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BlackRock, Obama Campaign Donors Stand To Benefit From Cuts To Military Pensions By Matthew Cunningham-Cook Obama U.S. President Barack Obama delivers remarks at the Catholic Health Association conference in Washington June 9, 2015. Executives at the financial firm BlackRock helped support both of his election campaigns. Reuters/Jonathan Ernst Obama U.S. President Barack Obama delivers remarks at the Catholic Health Association conference in Washington June 9, 2015. Executives at the financial firm BlackRock helped support both of his election campaigns. Reuters/Jonathan Ernst Obama U.S. President Barack Obama delivers remarks at the Catholic Health Association conference in Washington June 9, 2015. Executives...

SCOTT DEPOT, W.Va. (AP) -- Busloads of United Mine Workers of America miners and retirees roared in protest outside Patriot Coal headquarters Monday, as the bankrupt company looks to nix a union contract that includes pension contributions and health benefits. From a makeshift stage on the bed of a tow truck, UMWA President Cecil Roberts bellowed out to a camouflage-clad crowd of 1,500 to 1,800 miners and led them in a march to nearby Patriot headquarters. UMWA packed twenty-two buses of miners from Kentucky, West Virginia, Pennsylvania and elsewhere, according to union spokesman Phil Smith.

More bad news for Chicago (and Illinois) taxpayers arrived Friday morning in a 35-page, double-sided packet. On one of the last pages: "The entire Act is void." Cook County Circuit Court Judge Rita Novak tossed out Chicago's pension reform law. City Hall had negotiated the pension changes for municipal and labor employees with many of the city's unions on board. But Novak, using the Illinois Supreme Court's May pension opinion as her sword, ruled that the city's plan violates the Illinois Constitution: A public worker's pension is a contract that cannot be "diminished or impaired." lRelated Revenge of the pension...

If you haven't taken it upon yourself to start saving for retirement, you could already be in trouble. Even worse, you could be part of a national crisis that's brewing under everyone's radars. In an earnings call Thursday, Blackstone president and COO Tony James articulated the problem and its origins. "I have the view that the hidden crisis in America that no one is talking about is what's going to happen with all of these 20, 30, 40-year-olds who no longer have corporate pension funds of defined benefit," he said. "So, they have got 401(k)s and they are making little...

Why Pensions Are A (Big) Black Swan – Chicago’s Unfunded Liabilities Are 10 Times Its Revenues, 50% Of Their Cash That Will Have Go To Pensions. [ Full title ]. ... When talk turns to what might derail today’s debt-driven “recovery,” the big names and easy stories get most of the attention: China with its soaring debt, volatile equities and heavy-handed intervention; Japan with its stratospheric debt and science fictiony demographics; Greece, which needs no explanation; the developing countries with their weak currencies and mountain of dollar-denominated debt. And of course America’s triple bubble of stocks, bonds and derivatives. Underfunded...

Last month, in "Cities, States Shun Moody's For Blowing The Whistle On Pension Liabilities," we highlighted a rift between Moody’s and some local governments over the return assumptions for public pension plans. To recap, when it comes to underfunded pension liabilities, one major concern is that in a world characterized by ZIRP and NIRP, it’s not entirely clear that public pension funds are using realistic investment return assumptions. The lower the return assumption, the larger the unfunded liability. After 2008, Moody’s stopped relying on the investment return assumptions of cities and states opting instead to use its own models....

When Jim Palermo was serving as a trustee of the village of La Grange, Ill., he noticed something peculiar about the local police officers and firefighters. They were not going to live as long as might be expected, at least according to pension tables. After Mr. Palermo dug into the numbers, he found that the actuary — the person who advises pension plan trustees about how much money to set aside — was using a mortality table from 1971 that showed La Grange’s roughly 100 police officers and firefighters were expected to die, on average, before reaching 75, compared with...

Fewer than half of Michigan teachers will end up qualifying for retirement benefits under the state’s public school pension system. That means the Michigan Public School Employees Retirement System, which carries a $26.5 billion unfunded liability, is not only a raw deal for taxpayers, it’s not a very good deal for most teachers either. According to one estimate, just 43.4 percent of teachers will stay in the system for the 10 years required to become fully vested. When teachers leave the system before that time — to move, switch jobs, stay home with children or for another reason — they...

Assuming "growth" will fund all promised pensions and entitlements is magical thinking.The core problem with pension plans is that the promises were issued without regard for the revenues needed to pay the promises. Lulled by 60 years of global growth since 1945, those in charge of entitlements and publicly funded pensions assumed that "growth"--of GDP, tax revenues, employment and everything else--would always rise faster than the costs of the promised pensions and entitlements.But due to demographics and a structurally stagnant economy, entitlements and pension costs are rising at a much faster rate than the revenues needed to pay the promised...

Not all Californians believe that drought is the greatest threat to their state’s future. Early this month, a bipartisan group of current and former local officials filed the “Voter Empowerment Act of 2016,” a statewide ballot measure aimed at reforming the politics of public pensions. Its passage would forbid politicians in California from lavishing expensive retirement benefits on workers without explicit voter approval. The effort is being led by Carl DeMaio, a Republican former member of the San Diego city council, and Chuck Reed, a Democrat and former mayor of San Jose. If they prevail, the effects will be felt...

WILKESBORO, N.C. — Each month, Wilkesboro’s Irene Triplett collects $73.13 from the U.S. Department of Veterans Affairs as a pension payment for her father’s military service — in the Civil War. Triplett, 84, is the last living person collecting a pension payment for service in the Civil War. Pvt. Mose Triplett was born in 1846 and lived to the age of 92. After his first wife’s death, he married Elida Hall, nearly 50 years his junior, in 1924. In 1930, Irene Triplett was born when her father was 84 and her mother was 34.

Instead of looking to policymakers and accountants for help with state pensions, reformers across the country realize they need to hire a few more lawyers. Illinois Gov. Bruce Rauner has to deal with serious pension problems after a unanimous state Supreme Court shot down the 2013 reforms of his predecessor. The Illinois Constitution does not allow cutting promised pension benefits, but Rauner seems willing to take the legal steps necessary to make the reforms stick this time around. Illinois is not alone. Reforms made by Oregon's state legislators in 2013 included a reduction in cost-of-living increases. But Oregon's Supreme Court...

The national pension system has been hacked, leading to 1.25 million cases of personal data being leaked, the Japan Pension Service announced Monday. In a scandal reminiscent of the nation’s botched handling of pension records about a decade ago, people’s pension IDs, names, addresses and birth dates have been stolen through illicit accesses to fund workers’ personal computers, fund officials said. The data were leaked when agency employees opened an attached file in their email containing a virus.

The United States government could start seizing 401(k) plans, says one economist who believes a recent Supreme Court ruling sets the stage for Washington to initiate any such plans. Economist Martin Armstrong published a blog post Monday that took a look at the recent Tibble v. Edison case. The court concluded that employers have an obligation to protect their workers’ 401(k) plans from mutual funds that provide deplorable returns. Armstrong thinks this could give the federal government the arsenal to begin seizing private funds and take companies to court if mutual funds perform poorly. This comes as the Obama administration...

Recently the bond rating company Moody’s Investor Service cut their ranking of Chicago to junk status. The move ticked off a lot of people in the Windy City who think Moody’s overstated the case. I agree that Moody’s is wrong… not because they went too far, but because they didn’t go far enough. Chicago is not close to bankrupt. It’s completely bankrupt. People are just afraid to say this out loud. The city’s pensions are underfunded by $20 billion. Moody’s gave a rating that reflects how the city is performing. City officials are just angry Moody’s called them out. The...

One of every four retired workers from the state of Illinois, the city of Chicago and the Chicago Public Schools is getting a pension of more than $60,000 a year. That’s 80,365 people in all. For 13,240 of them, those checks provide a yearly income of $100,000 or more, a Chicago Sun-Times/Better Government Association analysis of pension records has found. An additional 20,004 have pension incomes totaling between $80,000 and $100,000 a year. ... the root of the problem is that government officials kept promising lifetime benefits to workers — and, in many cases, to their surviving spouses should they...

TRENTON, N.J. (AP) — New Jersey's top court weighed the budget repercussions of ruling on a pension dispute between Gov. Chris Christie and public workers' unions on Wednesday while one justice wondered if the state had engaged in a "bait and switch." The state Supreme Court probed whether the state has a contractual obligation to pay what it agreed to in a 2011 pension overhaul law and tried to get lawyers from both sides to explore whether such a finding would represent an overstepping of the courts' role and put it in the middle of the state budget process every...

Chicago has a simple financial choice: Stay in frying pan or get in the fire. That in simple terms is what Moody's Investors Service said in a report today about the difficult options the Emanuel administration faces over the city's woefully underfunded pension funds. The city must cut spending and raise taxes now or the risks of becoming insolvent will grow, forcing even harsher decisions later. The credit rating agency offers a sobering reminder of what's at stake in the eight-page report, which focuses on the pensions problems. ... A CUT ABOVE JUNK. Moody's, typically the most conservative of the...

The Chicago Public Schools — already facing a federal criminal investigation of its CEO and a projected $1.1 billion budget deficit next school year — now must pay a price for those problems through higher interest rates on a new $300 million bond deal. The rates lured investors to buy the bonds, which CPS says it will use to pay off recently completed construction projects. But they also mean Chicago taxpayers will pay more over the life of the borrowing deal, financial analysts said Wednesday. The main bond issue — for $280 million to be repaid over 25 years —...

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