Free Republic

The administration of Gov. Dannel Malloy, a Democrat who has been in office since 2011, projects a budget deficit of more than $5 billion over the next two years, thanks to generous pension benefits and the burden of servicing its big debt, plus falling tax revenue due to the exodus of large employers and residents reaching retirement age. Its budget woes, as well as concerns that they will be repeated year after year, helped lead General Electric in 2015 to consider moving its headquarters out of the state. Last year, it did exactly that. The state’s population is falling: Its...

Remember when the President set a target of reducing staffing at the EPA by thousands of people? It was one of his first initiatives upon taking office and while the process is taking some time it’s definitely moving forward. But I’m not sure he was anticipating the way these reductions are being rolled out. Government Executive reports this morning that there are indeed plans being put in place, but much of the work thus far seems to involve setting aside millions of dollars to fund early retirement plans and buyouts. The Environmental Protection Agency has set aside $12 million...

One of the most obnoxious trends in the nation, and one that is particularly acute in California, is the continued push to enshrine public employees as a special, privileged caste of Americans, exempt from the rules and obligations that apply to the rest of us. As I documented in my 2009 book, Plunder!, public employees often now receive the kind of pay, benefits, and protections more fitting for France, where civil service is the highest calling. In the United States, we traditionally valued entrepreneurship and freedom above pencil-pushing and bureaucracy. But times have changed. In California, a raft of public-employee...

The impact of ever-higher pension costs on California’s local governments, particularly cities, has been evident for years. Pension burdens contributed to the recent bankruptcies of three cities and more are feeling the pinch.

<p>Some American disasters come as bolts from the blue — the stock-market crash of October 1929, Pearl Harbor, the designated hitter, 9/11. Others are predictable because they arise from arithmetic that is neither hidden nor arcane. Now comes the tsunami of pension problems that will wash over many cities and states.</p>

In a 2010 gambit to reduce overall public school expenses, Michigan Gov. Jennifer Granholm proposed an early retirement incentive for the state’s highest-paid teachers. While the move would temporarily increase pension expenses, it would also reduce school payroll costs. Specifically, the bill that ultimately passed was projected to add $1 billion in new pension liabilities, which would be paid off within five years. That’s not what happened though. The state's Office of Retirement Services, which manages the school pension system, waited for three years to start making payments on the increased pension debt, greatly increasing the long-term burden. Then lawmakers...

Public schools around California are bracing for a crisis driven by skyrocketing worker pension costs that are expected to force districts to divert billions of dollars from classrooms into retirement accounts, education officials said. The depth of the funding gap became clear to district leaders when they returned from the holiday break: What they contribute to the California Public Employees’ Retirement System, known as CalPERS, will likely double within six years, according to state estimates. CalPERS, a public pension fund with $300 billion in assets that is the country’s largest, manages retirement benefits for 1.8 million current and former city,...

For months, if not years, we've warned that conflicted politicians and union bosses pursue a perverse set of goals in their management of pension funds, most of which have nothing to do with the application of sound financial principles. Here's how we summarized the situation back in the summer (see "An Unsolvable Math Problem: Public Pensions Are Underfunded By As Much As $8 Trillion"): Defined Benefit Pension Plans are, in many cases, a ponzi scheme.  Current assets are used to pay current claims in full in spite of insufficient funding to pay future liabilities... classic Ponzi.  But unlike wall...

Illinois state government has left the people of the Prairie State quite the stocking stuffer this holiday season: an $11 billion bill backlog that is expected to hit $14 billion by summer 2017. However, with money from a June stopgap funding agreement set to run out by the new year, nonprofit service providers and students receiving state grants may view it more as a lump of coal. Funding for service providers hasn’t been a priority for the General Assembly for quite some time. Service providers wait, on average, nearly a year to be paid. Illinois politicians have been delaying payment...

For the first time in its 85-year history, the California Public Employees Retirement System, CalPERS, is drastically cutting benefits for public retirees. Starting January 1st, four retired City of Loyalton public employees will have their pensions cut 60 percent. For 71-year-old Patsy Jardin, that means her pension will drop from about $49,000 a year to a little more than $19,000.

Two financial firms raked in billions of dollars of business from the New York State Common Retirement Fund, the $184-billion retirement fund serving many state employees, after their agents bribed one of the pension fund's employees with cash, watches, travel, bottle-service, cocaine, strippers, prostitutes, and Paul McCartney tickets, according to indictments announced today by Preet Bharara, United States Attorney for the Southern District of New York. The two indictments announced today only cover three people: Navnoor Kang, 38, the director of fixed income and security for the $185 billion New York State Common Retirement Fund; Gregg Schonhorn, 45, the vice...

When Detroit filed for bankruptcy in 2013, the city’s emergency-financial team said that high levels of retirement debt could prevent them from rescuing the Motor City’s finances. Detroit had been in economic decline for decades, and the pension problem—including billions of dollars in bonuses handed out while the city was hurtling toward insolvency—was just one part of the depressing financial picture. Dallas, by contrast, has been one of the fastest-growing American cities in recent years. Becoming a magnet for investment and opportunity, however, hasn’t protected the Texas city from experiencing its own Detroit-style financial crisis. Dallas’s retirement system for cops...

The Dallas Police and Fire Pension System's Board of Trustees suspended lump-sum withdrawals from the pension fund Thursday, staving off a possible restraining order and stopping $154 million in withdrawal requests. The system was set to pay out the weekly requests Friday. Pension officials said allowing the withdrawals would leave them without the liquid reserves required to sustain the $2.1 billion fund. "Our situation is currently critical, and we took action," board chairman Sam Friar said. Pension officials and many police and firefighters have blamed Dallas Mayor Mike Rawlings for forcing the latest run on the bank. Dozens of retirees...

The Dallas Police and Fire Pension System's Board of Trustees suspended lump-sum withdrawals from the pension fund Thursday, staving off a possible restraining order and stopping $154 million in withdrawal requests

The highest court in Massachusetts is set to hear arguments in a long-running legal battle over whether former House speaker Thomas Finneran should be able to collect his $34,000 annual pension despite his conviction on an obstruction of justice charge. Finneran’s fall from grace began in 2003 when he lied about his role in a legislative redistricting plan. …

Complain if you will about the fat pension plans which state and federal government workers receive, but after a lifetime of dedicated service it’s a great way to ensure your security in your golden years. Such was the case for Martin Petschauer, an auditor for New York State who put in a long career toiling away for the state and then retired, collecting his pension benefits until October of last year. This was actually quite the feat, particularly when you consider that Martin had passed away before Barack Obama was elected President. (Fox News) A Florida man has been...

Earlier today the Kersten Institute for Governance and Public Policy highlighted an updated pension study, released by the Stanford Institute for Economic Policy Research, which revealed some fairly startling realities about California's public pension underfunding levels. After averaging $77,700 per household in 2014, the amount of public pension underfunding for the state of California jumped to a staggering $92,748 per household in 2015. But don't worry, we're sure pension managers can grow their way out of the problem...hedge fund returns have been stellar recently, right? Stanford University’s pension tracker database pegs the market value of California’s total pension debt at...

Jacksonville’s unfunded pension obligations have blown a hole in the city’s finances and straddled residents of Florida’s most populous city with billions of dollars in debt and no ready way to pay it. Two years ago, Jacksonville city officials reported no pension debt on the city’s annual financial statements. A year later, the Governmental Accounting Standards Board required cities and states to report the bulk of their pension obligations on their balance sheets. With no material change in Jacksonville’s retirement system, $2.5 billion of debt appeared on its new list of liabilities. A new analysis by Truth in Accounting, a...

Back in the summer of 2012 the City of Los Angeles realized that they had a serious budget problem on their hands and the culprit, as in so many other cities, was the city’s extremely generous pension plan for municipal workers. Mayor Antonio Villaraigosa, backed by the city council, jumped into the fray and passed what was then described as sweeping pension reform and patted themselves on the back for a job well done. (LA Times, 2012) Despite a raucous protest and threats of a lawsuit from city labor unions, the Los Angeles City Council voted Tuesday to roll...

The company said the move is an alignment with industry trends in which fewer companies offer pensions. WILMINGTON, Del. -- The DuPont Company said it will eliminate its pension contribution for active employees. ... active employees will no longer accrue additional benefits, and employees under age 50 also will no longer receive dental, medical and life insurance benefits in retirement. ... Since 1998, nearly one-quarter of all Fortune 500 companies have stopped contributing to employees' primary pension plans, and 40 percent offer only a 401(k).