Dispute Over Closed-Door Pension Meetings Could Go to Florida Supreme Court

palm tree

Did pension officials violate Florida’s Sunshine Law when they held negotiations with unions behind closed doors?

Yes, according to the 1st District Court of Appeal. But the Florida Supreme Court may soon get its chance to weigh in.

From the Jacksonville Daily Record:

A Jacksonville municipal pension fund has asked the Florida Supreme Court to take up a dispute about whether officials violated the state’s Sunshine Law by holding closed-door mediation sessions to negotiate changes in the pension system.

The 1st District Court of Appeal in October ruled in favor of Florida Times-Union Editor Frank Denton, who contended in a lawsuit that the mediation sessions amounted to collective-bargaining meetings, which were required to be open to the public.

But the Jacksonville Police and Fire Pension Fund Board of Trustees filed a brief asking the Supreme Court to review the case.

The brief argues that issues related to collective bargaining should be determined by the Florida Public Employees Relations Commission, rather than going to circuit court.

The appeals court ruling upheld a decision by Circuit Judge Waddell Wallace.

The case stemmed from mediation sessions that were held after Randall Wyse, chief negotiator for the Jacksonville Association of Firefighters Local 122, and other plaintiffs filed a lawsuit in federal court against the city and the Jacksonville Police and Fire Pension Fund Board of Trustees, according to the ruling.

The mediation sessions led to a tentative agreement about changes in the pension system.

 

Photo by  pshab via Flickr CC License

State Lawyers File Arguments in Illinois Pension Lawsuit

Illinois

Illinois Attorney General Lisa Madigan filed the state’s argument in favor of the sweeping pension law on Monday. Illinois is arguing that pension protections are not absolute, and the law doesn’t violate the state’s constitution.

From the Chicago Tribune:

Lawyers for the state argued that the government’s so-called emergency police powers — the ability to take action to ensure the functions of government — trump the protections of the pension clause.

State lawyers said the ability to fund necessary government services, as well as to continue paying out pensions, has been severely hampered by paying an increasing amount of the state’s checking account to fund the pension systems.

“According to the circuit court’s holding, for example, faced with an epidemic requiring the state to purchase and distribute vaccines or other costly medication, the state could not even temporarily reduce pension benefits to cover those costs,” lawyers for the state argued.

“Nor, in a period of prolonged deflation … could the state reduce pension benefits even if the corresponding rise in benefits caused by 3 percent annually compounded COLAs caused every dollar of state revenue to be spent on pension benefits,” the state filing said.

Meanwhile, business leaders and legal experts who support Illinois’ pension reform law also filed briefs with the Supreme Court Monday arguing in favor of the constitutionality of the law.

Nine briefs were filed in total in support of the state, including one from the city of Chicago.

More from Reuters:

Illinois is getting support from its biggest city, business leaders and legal experts in its quest to defend the constitutionality of a 2013 law aimed at easing the state’s huge public pension burden.

The city of Chicago, social service providers and professors specializing in constitutional and contract law were among the parties that filed nine so-called amicus briefs with the Illinois Supreme Court by a Monday deadline.

The briefs backed the state’s appeal of a Nov. 21 court ruling that found the 2013 law violated a provision in the Illinois Constitution preventing retirement benefits for public workers from being impaired or diminished.

[…]

Illinois says it is required to maintain its sovereignty by the U.S. Constitution and that its police powers allow it to reduce retirement benefits to deal with the state’s fiscal emergency. Those arguments were echoed in briefs filed on Monday by legal experts and business group the Civic Committee of the Commercial Club of Chicago.

Chicago contended in its support brief that its efforts to rein in pension costs would be threatened if the court were to reject the state’s police powers argument.

The city, which is defending a 2014 law aimed at boosting funding for two of its four retirement systems from a union-backed constitutional challenge in Cook County Circuit Court, said it has a vital interest in the state’s case.

“Failure to achieve reform for the Chicago funds would have a devastating impact on Chicago’s economy and its delivery of essential services, as well as on the retirement security of current and former employees,” Chicago’s filing stated.

The Chicago Public Schools, the nation’s third largest school system, also backed the state’s position, as did Chicago’s transit authority and park district.

Illinois is shouldering over $100 billion of unfunded pension liabilities. The state has the worst credit rating of any state in the country.

Alfred Villalobos, Central Figure in the CalPERS Bribery Scandal, Has Died

court room

On Tuesday, the lawyer of Alfred Villalobos said his client was too sick to attend the trial stemming from his alleged bribery of a top CalPERS official.

On Wednesday, the lawyer said that Villalobos, 71, had passed away.

Villalobos, a former placement agent, was on trial for allegedly bribing a former CalPERS Chief Executive to direct money toward certain investment firms.

More from the Sacramento Bee:

Alfred Villalobos, the Nevada businessman at the center of a corruption scandal that gripped CalPERS, has died, one of his lawyers said Wednesday. Cindy Diamond, one of Villalobos’ defense attorneys, said Villalobos died Tuesday. She declined further comment.

Villalobos’ lawyers, as it happens, were prepared to ask a federal judge Wednesday to delay Villalobos’ trial on bribery charges because of their client’s ill health. In a court filing earlier this week, attorney Bruce Funk said “Mr. Villalobos is not physically or mentally able to participate in his defense, or to even sit through a trial.”

The trial was supposed to begin Feb. 23.

The 71-year-old Villalobos has been in poor health for the past three years, according to his lawyers, with his maladies including a heart condition and neurological problems. When he appeared in U.S. District Court in San Francisco last summer on a pre-trial matter, he walked slowly with the aid of two canes and his breathing was difficult.

[…]

In a statement, CalPERS spokesman Brad Pacheco said, “We remain focused on supporting enforcement authorities as they pursue bringing to justice those who broke the law and violated the trust placed in them by the public employees of California.”

Villalobos had pled not guilty and was facing 30 years in prison.

The death will not change the situation of Fred Buenrostro, the former CalPERS executive who is cooperating with prosecutors in exchange for a reduced sentence.

 

Photo by  Lee Haywood via Flickr CC License

Video: Chris Christie Talks Pensions in “State of the State” Address

Chris Christie gave his “State of the State” address on Tuesday, and some observers thought he would use the platform to reveal specifics about the series of pension changes he is considering.

He didn’t, but he did speak generally about pensions for about 4 minutes. Watch the video above to hear the section of his speech dealing with pensions.

Thanks to John Bury of Bury Pensions for capturing the remarks.

 

Feature photo credit: Bob Jagendorf from Manalapan, NJ, USA (NJ Governor Chris Christie) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

Five Councilmen Withdraw Support For Bill to Boost Disability Pension of NYC Cops

NYPD

Last week, Pension360 reported on the re-emergence of a New York City Council resolution that would boost police disability benefits.

At the time, a majority of councilmembers were on board with the resolution.

But between last week and now, things have changed: this week, five councilmembers withdrew their support for the measure.

A few of them said they changed their mind after they were asked to reconsider their stance by Council Speaker Melissa Mark-Viverito.

Details from Capital New York:

Five members of the City Council are withdrawing their support for a resolution that would boost disability pension benefits for New York City police officers and firefighters.

The five offered varying reasons for removing their names from the resolution, which is a priority for the Patrolmen’s Benevolent Association, the union that’s been at odds with Mayor Bill de Blasio and Council Speaker Melissa Mark-Viverito.

Several Council members said they changed their minds after Mark-Viverito and her staff asked them to reconsider. Eric Koch, a spokesman for Mark-Viverito, denied the Speaker made any such calls, but did not dispute that her staff had reached out to members.

The list of council members who changed their minds:

Councilman Vincent Gentile of Brooklyn had signed onto the proposal last week, but withdrew his support over a “procedural issue,” his spokesman said.

[…]

The other members who backed away from the resolution are: Danny Dromm of Queens and Robert Cornegy of Brooklyn, both of whom did not respond to repeated requests for comment; Donovan Richards of Queens, who declined comment; and Daneek Miller of Queens.

The measure would boost police disability pensions by altering the tier system that dictates benefits. Crain’s explains:

[The measure] would increase disability pensions for police hired after July 2009. It has been introduced annually in response to Mr. Paterson’s veto of a bill to move newly hired officers to the more generous Tier II pension from Tier III.

Members of Tier III work for 22 years, instead of 20, to collect full-service pensions. Their disability benefits are 44% of their last three years of salary with an offset for Social Security benefits, instead of 75% of the final year’s salary with no offset.

Mayor Bill de Blasio has come out against the measure, and Council Speaker Melissa Mark-Viverito is undecided.

 

Photo by  www.GlynLowe.com via Flickr CC License

Dutch Pension Turns $56 Million Profit From Hedge Fund Exit

Netherlands

The Netherlands’ second-largest pension fund, PFZW, decided late in 2014 to completely exit its $2 billion hedge fund portfolio.

Two months later, after a rapid-fire wind down, the pension fund has exited all hedge funds – and it made a $56 million profit in the process.

From ai-cio.com:

Dutch healthcare sector pension PFZW netted a $56 million profit in two months as it exited hedge funds last year.

PGGM— which manages assets on behalf of PFZW—completed the majority of the liquidation in November and December. PFZW announced last week that it had closed its allocation to the asset class, citing complexity, costs, and sustainability issues.

Ruulke Bagijn, CIO for private markets at PGGM, said her company had raised $2.44 billion from the sale of the hedge fund holdings.

“The successful liquidation process of PFZW’s capital was driven by skilful use of the unique operational infrastructure PGGM has in place, as well as accommodating market circumstances,” she said.

[…]

PFZW’s hedge fund holdings performed in line with expectations and “contributed to diversification of the portfolio”, Bagijn said, but the pension had “a less strong belief in the positive contribution of hedge funds” in the future.

However, Bagijn emphasised that the decision was made by PFZW and would not affect PGGM’s other clients. This is despite Jan Soerensen, PGGM’s head of hedge funds, leaving the group last year.

PFZW manages $185 billion in assets for the country’s health care workers.

CalPERS Funding Ratio Jumps to 77 Percent On Back of Investment Gains

Calpers

CalPERS revealed on Tuesday that its funding situation had improved in 2014; the system is now 77 percent funded, an increase of 7 percentage points from fiscal year 2012-13.

CalPERS attributed the funding increase to investment performance – the fund saw their investments return 18.4 percent last fiscal year.

More from the Sacramento Bee:

CalPERS said Tuesday its financial health improved significantly in the latest fiscal year, thanks to a strong investment gain, although the nation’s largest public pension system remains underfunded.

In its annual financial report, the California Public Employees’ Retirement System said it was 77 percent funded at the end of the fiscal year June 30. That represents a 7 percentage-point increase from a year earlier.

[…]

As for the recent jump in funding levels, “it’s safe to say it’s the investments,” said CalPERS spokesman Brad Pacheco. CalPERS earned 18.4 percent in the latest fiscal year, well above its official forecast of 7.5 percent.

Despite the improvement in finances, public pension critic Dan Pellissier said CalPERS is still struggling to deliver what he called “unsustainable benefits.”

He said CalPERS hasn’t been able to fully right itself even as investment performance strengthens, and a 77 percent funding ratio isn’t sufficient to safeguard benefits for future retirees. Without benefit cuts, taxpayers are going to have spend more, he said.

“That 23 percent that’s still unfunded represents billions of dollars that will be paid by future taxpayers,” said Pellissier, president of California Pension Reform.

As it is, CalPERS has been raising contribution rates from taxpayers in recent years, in part to help overcome the disastrous investment losses suffered during the 2008 market crash. Its most recent rate hike, approved by its governing board last April, is designed to compensate for longer life expectancies for retirees. The rate hike means the state’s annual contribution will gradually grow from $3.8 billion to $5 billion. Local governments and school districts’ rates will go up, too.

CalPERS is the largest public pension system in the United States and manages $295 billion in assets.

 

Photo by  rocor via Flickr CC License

Christie Mum on Pension Specifics During “State of the State” Address

Chris Christie

New Jersey Gov. Chris Christie announced this summer that another round of pension reforms would be coming to the state, and he all but promised that benefit cuts would be part of the deal.

But details have been sparse since then. It was thought Christie might use his “State of the State” speech to unveil a few more details about what’s coming down the pension reform pipeline.

But his address offered few specifics.

From NJ.com:

In his fifth State of the State address Tuesday, Gov. Chris Christie called the state’s struggling pension system “an insatiable beast.”

But despite rumors swirling the past week that he might use the platform to unveil a massive pension overhaul based on the recommendations from his pension commission, Christie offered little on how he intended to tame it.

The governor, who spoke at length about drug treatment and a Camden turnaround, dedicated roughly 10 percent of his remarks to the pension system without delivering any solutions.

“This is not just a New Jersey problem. This is a national problem,” he said. “A long-term solution and sustainable future for our pension and health benefit plans are difficult but worthy things to achieve.”

While crediting his 2011 reforms with saving the taxpayers more than $120 billion over the next three decades, Christie said pensions remain one of New Jersey’s “largest and most immediate” obligations.

“But the fact that is that while we have been making up ground, the pension fund is underfunded because of poor decisions by governors and legislatures of both parties over decades, not years,” he said. “These sins of the past have made the system unaffordable. But we do not have the luxury to ignore this problem.”

[…]

“Think of it this way, in order to close the current shortfall in just the pension system alone, every family in New Jersey would have to write a check for $12,000,” he said. “That is the nature of long-term entitlements which grow faster than the economy, and in that regard our problem here in New Jersey is not that different from Washington’s entitlement problem.”

Over the summer, Christie put together a panel to review the state’s pension system and offer recommendations for reform. But the committee has been silent for months, although Christie said they are “hard at work”.

 

Photo By Walter Burns [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

CalSTRS Buys $470 Million New York City Office Building

skyscraper

As part of a joint venture with MHP Real Estate Service, CalSTRS has bought a 1.2 million square foot office property at 180 Maiden Lane in downtown New York City.

The building is the former home of Goldman Sachs’ offices.

From Investments and Pensions Europe:

The US pension fund has invested $260m in the asset – around 55% of the deal – through a joint venture with New York City-based MHP Real Estate Service.

The deal was carried out via CalSTRS’s separate account real estate manager Clarion Partners.

The property is currently 66% vacant, with around 800,000sqft left empty by the departure of Goldman Sachs.

CalSTRS said it had a full-scale capital and leasing plan for the next five years that would result in an increase in capitalisation for the property.

The pension fund classified the 1.2m sqft asset, at 180 Maiden Lane, as value-added.

Gary Rufrano, director and a member of the acquisitions group at Clarion, said there would be “many tenants who will be looking for space” in the area.

“Rental rates in the sub-market are 25-35% less than in Manhattan,” he said.

“There also is the fact that, in the down-town area, new amenities like shops, restaurants and housing options have been added to the sub-market over the past couple of years.”

MHP, which will oversee the day-to-day operations of the property, will carry out a $28m refurbishment of the property’s lobby and amenities.

The redevelopment includes the addition of a cafeteria and fitness centre for tenants.

CalSTRS manages $190 billion in assets.

 

Photo by Sarath Kuchi via Flickr CC License

Jacksonville Pension Reform Vote Delayed by Council

video platformvideo managementvideo solutionsvideo player

The Jacksonville City Council has decided that “more time is needed” to review a newly-amended pension reform measure. A vote on the measure has been pushed back.

The Council originally passed the measure in December. It was then sent to the Police and Fire Pension board, who requested several changes. Now, the measure is in limbo once again.

Watch the video for more.

 

Feature photo by pshab via Flickr CC License


Deprecated: Function get_magic_quotes_gpc() is deprecated in /home/mhuddelson/public_html/pension360.org/wp-includes/formatting.php on line 3712