Ted Ballantine | Pension360

A Former CalPERS CEO Is Finally Pleading Guilty to Conspiracy Charges, So Let’s Take Stock of the Damage He Did

For years, CalPERS—the largest public pension fund in the country— was a hotbed of backdoor scheming, shady dealings and outright fraud.

That was thanks to two long-time friends, Fred Buenrostro and Alfred J.R. Villalobos, who we now know (well, allegedly) profited greatly from greasing the wheels on billions of dollars of CalPERS investments from behind the scenes in 2007-2008, and probably years before.

Buenrostro was CalPERS’ CEO from 2002-2008, and Villalobos sat on the fund’s Board from 1993-1995.

The story starts in 2007 when Villalobos, acting as a placement agent, was hired by the investment firm Apollo Global Management to secure investment business from CalPERS.

And, with the help of Buenrostro, he would get it, although not by legal means:

The two men created a series of fake letters on CalPERS’ stationery to make sure Villalobos got paid millions in commissions by a Wall Street private equity firm that was investing the pension fund’s money.

Buenrostro created phony letters on the pension fund’s letterhead after another CalPERS official refused to sign the disclosure documents. After receiving the letters, Apollo was able to obtain $3 billion in CalPERS investments between August 2007 and April 2008.

Villalobos, by the way, earned around $50 million worth of commission from those deals, according to CalPERS reports.

But Buenrostro made out well, too: after he retired from CalPERS in 2008, he was allegedly gifted a free Tahoe condo and a cushy job at Villalobos’ investment firm.

Thankfully, it didn’t take long for their scheme to unravel:

In March 2013, former California Public Employee Retirement System CEO Fred Buenrostro was indicted by a San Francisco grand jury and charged with conspiracy in connection with a scheme involving fraudulent documents related to a $3 billion investment by the retirement system in funds managed by Apollo Global Management.

Now, over a year after charges were filed against the two men, it seems one of them has finally admitted to himself that the gig is up—Buenrostro’s lawyer told a judge Monday that he plans to enter a guilty plea and cooperate with authorities. That includes assisting the government with its case against Villalobos.

Buenrostro’s plea bargain isn’t yet final, so it isn’t clear how much jail-time he is now looking at.

The True Cost?

This isn’t nearly the first time corruption and fraud has made its way in the public pension system, and it won’t be the last. That’s why its important to assign some numbers to these news stories—if only so we can appreciate the tangible costs that this type of cronyism incurs to the system, its members and taxpayers on the whole.

CalPERS had been putting money in Apollo funds for years—at least as far back as 2002. But the alleged misconduct supposedly happened between 2007 and 2008, when CalPERS put quite a lot of money in the hands of Apollo.

Those investments included at least six Apollo funds: Apollo Investments FD III LP; Apollo Group Inc Cl A; Apollo investment Fund VII LP; Apollo Global Management LLC; Apollo Real Estate Investment Fund; and Apollo Euro Principal Finance.

CalPERS still has all of those funds on the books as of 2013 except for two: Real Estate Investment and Europe Principal Finance. The system offloaded those two in 2012 with mixed results—Real Estate Investment Fund had lost $19 million of its book value, a 32% loss. Meanwhile, Europe Principal Finance had fared well, and saw its value increase 23% by the time CalPERS got out.

Of the four funds still on CalPERS’ books, three of them are now worth significantly less than their book value: Investment FD III LP is down 43%; Group Inc Cl A is down 57%; and Global Management LLC was down over 8%. All in all, those funds lost about $56 million of their book value. (These are all 2013 numbers—the most recent CalPERS provides.)

However, CalPERS got bailed out by one Apollo fund which did so well it erased all those losses and then some: the Investment Fund VII LP, whose market value in 2013 stood 47% higher than its book value. If CalPERS got out today, they would come out with over $200 million.

With great risk comes great reward. And Fund VII was certainly a risk—it was invested heavily in distressed companies:

In Fund VII, 57 percent of Apollo’s deals involved buying debt of distressed companies or buying distressed companies outright, while only 28 percent were straightforward acquisitions of companies not in distress. Corporate carve-outs of divisions accounted for 15 percent.

It paid off for CalPERS, as Fund VII has been one of the best-performing private equity funds in the world since 2008.

Still, four out of those six funds lost value. If CalPERS had invested that money in other funds, would they have fared better? We’ll never have any idea.

But the point is, these investment decisions were not made on the merit of the investments themselves, but instead on the basis of friendship and monetary gain for the dealmakers involved.

Oh, and the corruption (that we know about) goes back even further than 2007:

In late May 2004, Alfred Villalobos hosted a meeting at his home in Nevada, a few miles from Lake Tahoe and the California border. Villalobos was joined by David Snow, the Chairman and Chief Executive Officer of Medco Health Solutions, one of the nation’s largest pharmacy benefit management (“PBM”) companies, and Fred Buenrostro, who was the Chief Executive Officer of CalPERS at the time.

Soon after the May 2004 meeting at the Villalobos home, Medco agreed to retain Villalobos as a consultant and pay him $4 million.

Buenrostro was married in 2004, while serving as CEO, and allowed Villalobos to not only host the wedding at his home in Nevada, but reportedly also allowed Villalobos to pay for the event as well as lodging nearby for Buenrostro’s guests who attended the ceremony.

In October 2005, the year after Buenrostro got married on Snow’s consultant’s dime, Medco got the CalPERS contract.

That contract was worth $48 million dollars, and you can bet Villalobos got a hefty finders fee for that, too.

One thing’s for sure: he’ll be able to afford a lot of cigarettes in prison.

Litigating for the Future of Public Pensions in the United States

Author: Paul M. Secunda, Marquette University – Law School

ABSTRACT: It is nearly impossible in the United States today to go long without reading a headline about some aspect of the American public pension crisis or about some State undertaking public pension reform. Public pensions are horribly unfunded, millions of public employees are being forced to make greater contributions to their pensions, retirees are being forced to take benefit cuts, retirement ages and service requirements are being increased, and the list goes on and on.
These headlines involve all level of American government, from the recent move to require new federal employees to contribute more to their pensions, to the significant underfunding of state and local public pension funds across the country, to the sad spectacle of the Detroit municipal bankruptcy where the plight of public pensions plays a leading role in that drama. The underfunding of public pension plans has led not only to a number of bankruptcy proceedings, but has also led various states to reduce promised pension payouts to retired plan members or to increase pension contribution requirements for active employees.
As a result, government officials, employees, and retirees are in the midst of litigating for the future of American public pensions. This article focuses on all three levels of American government (federal, state, and local), and reviews the current status of pension litigation at each level.

Get the entire article at:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2443147

Photo by AtomicJeep via Flickr CC License

CHART: New Jersey Was Always Bad At Making Pension Contributions, But It Was Getting Better. Until Now.

This is the first in a series of charts designed to illustrate the context and consequences of New Jersey Gov. Chris Christie’s plan to cut the state’s pension contributions by $2.4 billion over the next two years.

As you’ll see in the chart below, beginning in 2010 New Jersey was slowly paying higher percentages of it’s required annual contributions into the pension system. Its 2014 payment was set to be the biggest yet–but that will no longer be the case.

Stay tuned for more charts on a weekly basis, including New Jersey’s contributions to other systems, what those contributions look like side-by-side with unfunded liabilities, and how Christie’s cuts will affect system liabilities and state contributions going forward.

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California Passed A New Budget—Here’s What It Means For Pensions

California is a state known for its positive vibes, but those vibes have not historically extended to its financial condition. That’s changed just a bit in the last week, due to a string of financially sound (and therefore surprising) budget decisions on the pension front.

It happened last Tuesday, when Gov. Jerry Brown signed into law a section of the state’s new budget that addressed CALSTRS’ $74 billion shortfall by raising contributions rates from teachers, school districts and the state. The budget also addressed CalPERS’ underfunding by increasing the state’s 2014-15 contribution by a pretty sizeable amount.

An important note: it took Moody’s less than 24 hours to upgrade California’s credit rating after seeing this budget—from A1 to Aa3—and predictably, those pension provisions were a big reason why. That’s important, because states need all the positive reinforcement they can get when it comes to making these politically tough decisions.

And they were politically tough (albeit economically obvious) decisions—the California Teachers Association donated $290,000 to state politicians during the last election cycle, and put $4.7 million in Gov. Brown’s coffers to help elect him in 2010.

Okay, now the details of the budget.

The portion of the budget summary that addresses the state’s pension systems, which you can read here, leads with this line:

In its 101‑year history, contributions to CalSTRS have rarely aligned with investment income to meet the promises owed to retired teachers, community college instructors, and school administrators.

Indeed. That’s refreshingly honest, even if those issues only represent a fraction of California’s larger pension problems.

To be fair, the state’s recent pension reform law addressed some of these issues in 2012 by raising retirement ages and reducing benefits. But it wasn’t enough, and the budget says as much:

Even with those changes, and despite recent investment success, the viability of CalSTRS ultimately requires significant new money on an annual basis.

My god, the state budget has become self-aware! And it doesn’t matter if lawmakers are playing the part of Captain Obvious here. It’s still a positive sign to see this stuff, in writing, in the document that’ll be determining the state’s expenditures for the next fiscal year.

Onto the numbers: The budget directs an additional $276 million in contributions from teachers, schools and the state to the CALSTRS system in fiscal year 2014-15. That will be accomplished by:

Increasing teacher contribution rates from 8 percent of pay to 10.25 percent of pay, to be phased in over the next three years.

Increasing school contribution rates from 8.25 percent of payroll to 19.1 percent of payroll, to be phased in over the next seven years.

Increasing the state’s contribution rate from 3 percent of payroll to 6.3 percent of payroll over the next three years.

The budget gives the CALSTRS Board the authority to increase school and state contributions if they see fit. On the other hand, the Board gets the authority to reduce them, too.

CalPERS is also set to receive a big contribution from the state, which is good news because California was consistently lagging behind in that department before modestly increasing its contribution last year. But 2014 represents a big step forward, as the state increases its contribution by 20 percent.

This coming fiscal year (2014-15) will also represent the 7^th straight year California has increased its contribution to CalSTRS. All told, the plan is to fully fund CALSTRS in 30 years.

Of course, that projection is contingent on CalSTRS meeting its investment return assumptions, which currently sit at 7.5% annually. How likely is it to meet that target over the next 30 years?

“Highly unlikely,” said Gov. Brown at a press conference back in May.

He’s right. And it’s important to maintain perspective.

This is but a small step on the road to responsibly managing the state’s pension funds. Declaring victory now is like buying a house on a 30-year mortgage, making the first payment without a hitch and then proclaiming, “We did it!”

All the same, it is a step forward, and you need to crawl before you can walk. Let’s hope California learns how to run sooner than later.

Photo by Steve Rhodes via Flickr CC License

In New Jersey, the Pension Tension Is Rising

By now, you know the story: New Jersey Gov. Chris Christie’s plan to cut pension funding by $2.4 billion over two years has been met with controversy, outrage, a string of lawsuits and numerous legal questions.

The answers to some of those legal questions may come as soon as Wednesday, when Christie’s plan will see its first day in court.

But outside the courtroom, a new bill is gaining steam among state lawmakers—a bill that finally puts a tangible, short-term solution on the table. And even if it doesn’t come without its kinks, it’s the first plan that has been offered up to counteract Christie’s measure. (More on the bill below).

Meanwhile, more data is emerging on the true costs of Christie’s plan. Spoiler alert: the snowball effect is real, and it’s prohibitively expensive.

Cuts Bring Consequences, Now and in the Future

Every passing day brings a bit more clarity as to just how expensive Christie’s plan to cut pension funding by $2.4 billion would be. In a bond disclosure released by the state, the ramifications of the cuts are outlined in four points.

The proposed reduction in contributions…could have the effect of (1) delaying the phase-in of the State’s full actuarially required contribution, (2) increasing the amount of such contribution, (3) increasing the size of the UAAL and (4) decreasing the percentage of the Funded Ratio of the Pension Plans once the phase-in is completed.

Indeed, New Jersey can expect all four of those points to materialize, some sooner than others. And when you attach numbers to them, the urgency of New Jersey’s upcoming fiscal situation really starts to set in. If Christie goes through with his plan, here’s what New Jersey could be facing in fiscal year 2019:

The state’s actuarially required contribution would be $4.8 billion—for context, that sum would represent 26 percent of New Jersey’s general fund budget, based on 2012 expenditures.

The unfunded liabilities of the state’s pension plans would total $46 billion. Christie could decrease these liabilities by $4 billion if he scrapped his plan to cut contributions by $2.4 billion in 2015-16.

The funded ratio of state plans would drop to 48.25 percent. The funded ratio sat at 67.5 percent in 2011.

Rest assured, Christie has seen these numbers—they came from his own financial team.

A New Bill Emerges in the Legislature

On Monday, news broke that New Jersey state legislature had agreed on an alternate budget proposal that would raise enough revenue to cover the state’s full contribution to the pension system, a payment that Christie’s plan had drastically cut.

Sources inside the legislature told the Star-Ledger that Democrats in the state Senate and Assembly had reached a deal to raise more than $1.3 billion in revenue—money that would cover the state’s full annual contribution of $2.25 billion to the pension system. Christie’s plan had cut that payment down to just $681 million.

The revenue would come from tax increases on high-income earners and businesses, among other things. From the Star-Ledger:

Under the Democrats’ budget:

• The marginal tax rate on income above $1 million would rise from 8.97 percent to 10.75 percent, retroactive to January of this year, netting $667 million.

• The corporate business tax would rise from 9 percent to 10.35 percent, yielding $375 million.

• The Business Employment Incentive Program (BEIP) of tax abatements would be suspended for a year, freeing up $175 million.

• A tax hike on income between $500,000 and $1 million that Sweeney had proposed would be scrapped, as Prieto suggested.

In addition, some new taxes or fees Christie proposed would be folded into the Democrats’ budget, such as a penalty for making bad electronic payments ($25 million) and a move to subject all online retailers to the state sales tax ($25 million).

Taxes Christie proposed on electronic cigarettes and the Urban Enterprise Zone program would be cut out of the budget under the Democrats’ deal.

Of course, the deal doesn’t come without its hitches. Despite the bill’s focus on raising revenue, it actually earmarks more money toward several of the areas that Democrats lost out on in the last budget dealings: the new bill restores funding for the Earned Income Tax Credit, nursing homes, legal services for the poor, and women’s health care centers.

Those are all items that deserve funding, but their inclusion makes the bill much less politically palatable to lawmakers on the other side of the aisle. Of course, it was already unpalatable to politicians who, on principle, oppose tax increases.

Indeed, state Republicans are none too happy about the proposed measure.

“It would be suicidal to…New Jersey’s economy,” said Assemblyman Declan O’Scanlon (R-Monmouth) during a Monday morning press conference.

The Democrats would likely be able to overcome Republican opposition. They hold 48 seats (60 percent) in the General Assembly, and 24 seats (60 percent) in the Senate.

The Senate and General Assembly are holding hearings on the bill Tuesday, and the measure is expected pass by vote through the two houses by Thursday.

Still, the chances that the bill becomes law in its current form, or at all, are slim. That’s because the buck stops with Gov. Christie, who has line-item veto power and has repeatedly states he will oppose any tax hikes on wealthy individuals or businesses.

Lawmakers have until July 1 to pass a new budget.

Photo by Jim Bowen and Marissa Babin via Flickr Creative Commons License

Reaction Roundup: Christie Draws Flack for Pension Put-Off

Facing a $1 billion budget deficit, New Jersey Gov. Chris Christie made the bold decision last week to reverse course on his previous pension reform efforts and divert the state’s upcoming pension contributions into the general budget to help cover its budget shortfall. All told, Christie will take $2.45 billion out of his state’s pension system over the next two years.

Journalists, politicians and commentators had much to say on the matter. Here’s a roundup of the most important reactions from around the country:

Wendell Steinhauer–President of the New Jersey Education Association:

“This much should be abundantly clear to every New Jersey resident: Gov. Christie is much better at making pension promises than keeping them. As a candidate, he pledged to educators that ‘nothing about your pension is going to change when I am governor.’ He broke that promise in 2011 when he signed a law that reduced pension benefits even for current retirees. In signing that law, he made a new promise that the state would slowly return to responsible pension funding practices by phasing in its contributions at a rate of 1/7 per year. Now he says he intends to break that promise, too. Gov. Christie’s illegal, irresponsible and reckless proposal to further delay a return to sound pension funding practices will irreparably harm New Jersey and cannot be allowed.” Click to read more.

Bob and Barbara Dreyfuss–The Nation:

“When Christie announced in May that he was unilaterally canceling more than $2.4 billion in state contributions to the public employee pension fund, he tore up his signature legislative achievement, a pension reform plan that he had hoped would be the basis for his run at the White House. On the one hand, that law was supposed to show his ability to work across the aisle to enact hard budget choices, since the legislation—which slashed benefits, hiked employee payments and raised the retirement age—had been rammed through with the help of a few Democratic party bosses allied to Christie. But it was also supposed to show Christie’s ability at sound economic stewardship by putting the state pension system on a sound footing. It might have done that, by 2018—had not Christie decided to take the money to balance the state budget, rather than raising taxes. (Raising taxes is poisonous for the chances for any GOP standard-bearer, in today’s toxic Republican party climate.) But shredding his great legislative achievement may now have also doomed his chances at being president.” Click to read more.

Barry Chalofsky–Times of Trenton:

“For four years, most of New Jersey’s economic problems were blamed on former Gov. Corzine. Now we are starting to see the governor blame public retirees’ pension and health benefits as the cause for the unfunded liability in the pension system. In 2011, when the pension reform act was passed, the governor took credit for restoring the pension plan. Now, only three years later, these reforms “are not enough.” The governor has made a lot of claims about the “New Jersey comeback,” but the reality is that we have one of the highest unemployment rates in the country (38th out of the 50 states, according to the U.S. Department of Labor) and have created far fewer jobs – only about half the jobs lost in the recession. Our overall economic growth, the engine that drives prosperity, is nowhere near as powerful as that of other states. Why? Because the governor has refused to see reality and finds more comfort in blaming others. But maybe there is more to the pension liability than the governor is admitting to.” Click to read more.

Charles Lane–The Washington Post:

“The conventional wisdom about New Jersey Gov. Chris Christie’s political fortunes is that he still has a shot at the 2016 Republican presidential nomination — if he can just get past Bridgegate, the scandal over his aides’ allegedly politically motivated partial closure of the George Washington Bridge last year. In that regard, Christie’s fortunes have arguably improved since the memorable January news conference in which he condemned his aides but denied advance knowledge of their wrongdoing. No one has yet produced a “smoking gun” to disprove his version; polls still put him in the top tier of GOP contenders; and he’s resumed fund-raising for Republican candidates in 2014, with an itinerary that includes Iowa, New Hampshire and South Carolina. Alas for Christie, his problems go deeper than Bridgegate: Specifically, he’s governor of a state that may not actually be governable.” Click to read more.

Editorial Board–The Express Times:

“Faced with a $1 billion budget deficit, Christie decided to rob the pension-payment schedule of $2.43 billion over the next two years to meet current expenses and balance the budget. There’s little need to explain that New Jersey, like Pennsylvania, is rolling the dice in a game that threatens to impoverish future generations and diminish public services and jobs. As Christie announced his 180-degree turn on Tuesday, credit agencies warned of another downgrade in the state’s bond rating. On Wednesday, public unions followed through on a promise to sue to ensure the state makes its annual pension payments. Christie said the state can’t keep paying for “sins of the past” — and on that narrow point, he has a wholly defensible argument. But much of the current deficit — an $875 million shortfall in revenue — was caused by overly optimistic budgeting by the administration, coupled with a change in federal rules that reduced income tax projections.” Click to read more.

Photo Credit: Bob Jagendorf via Wikimedia Creative Commons

Finding Common Ground In Pension Reform: Lessons from the Washington State Pension System

“In the wake of the economic recession, public pension plans have emerged as an increasingly salient and contested public policy issue. The debate over public pensions is driven in large part by the fact that many public retirement systems are significantly under-funded. For example, numerous estimates peg the national shortfall in public pension assets relative to liabilities at several trillion dollars.

Given the pervasiveness of funding shortfalls, there have been proposals to shift public-sector pensions from defined benefit (DB) plans towards defined contribution (DC) plans which are, by definition, fully-funded. However, this approach is not without controversy, as it shifts the future risk associated with investment returns earned on pension assets away from taxpayers and towards employees and raises questions about employee preferences for different types of pension plans and how reform might affect retirement security and workforce composition. In addition, moving towards a DC-type pension system does nothing, by itself, to address existing shortfalls.” Read the complete report here.

Photo by Gates Foundation via Flickr CC License

After Detroit: How Will Illinois and Its Communities Respond?

Detroit’s fiscal struggles, particularly its bone-dry pension system, have been well documented over recent years. But the city’s problems aren’t unique–and Chicago is one city that is currently dealing with many of the same pension-related fiscal pressures as Detroit. To discuss these problems, the Civic Federation and the Federal Reserve Bank of Chicago held a forum on April 23, 2014, that brought together over 140 participants. Now, the Federal Reserve Bank of Chicago is giving us an inside look at that conference, and has released a detailed article about what was discussed.

To read the article, click here.

Photo by Bitsorf via Flickr CC License

In New York, an Important Pension Bill is Slipping Through the Cracks

Every year, around this time, we get to experience one of summer’s finest, most deeply rooted traditions.

No, I’m not talking about Fourth of July. I’m talking about the end of New York’s legislative session, which typically gives us as many fireworks as any Independence Day celebration, and twice the drama.

This year is no exception. So when the state’s legislative session ends on June 19^th, get ready for a flurry of activity and, likely, the rushed passage of a few bills that have been subject to very little scrutiny or debate, if any at all.

One particular bill is taking center stage in the days leading up to the 19^th. It was introduced quietly, its sponsors have been relatively hush-hush, and now several watchdog groups are concerned the bill could slip into law without much fanfare.

It’s officially called A9594/S7326, but often goes by the more colloquial “NYPD Pension Bill”.

We’ll dive into the details of the bill, but first some back-story is necessary. Back in 2009, then-New York City mayor Bloomberg passed a measure altering pension benefits for police officers hired after July 1, 2009; officers hired after that date were placed into a category called “Tier III”, the details of which are outlined here:

Tier III requires members to work for 22 years, instead of 20, to collect full-service pensions. Disability benefits are 44 percent of the final average of the last three years’ salary with an offset for Social Security benefits, instead of 75 percent of the final year’s salary with no offset.

The measure was projected to save the City $31 billion over 30 years.

The new bill, A9594/S7326, attempts to undo these changes. And actually, the bill isn’t new at all. A bill with the same language was proposed in 2009 with the aim of doing away with “Tier III” altogether and restoring larger benefits for newer hires. That bill was vetoed by then-governor David Paterson.

But now it’s back. And, if passed, it would represent a major expense for the City. The cost:

With more than one-third of all police retirees, approximately 15,000 people, collecting disability pensions, the proposed changes would increase New York City’s costs by $35 million in fiscal year 2015. The actuarial value of contributions required by the City to fund the new benefit would be far greater: $266.4 million in fiscal year 2015, growing to $617.9 million in 2019.

Those aren’t particularly palatable numbers, which explains why many typically pro-union politicians are shying away from supporting the bill.

Among them is New York City Mayor Bill de Blasio, who avoided commenting on the bill for weeks before news broke this week that he won’t support it. As reported by Capital New York:

Mayor Bill de Blasio, generally a champion of unions, opposes a state Assembly bill that would boost disability pensions for New York City police officers because he believes it would put too big a dent in the city budget, Capital has learned.

In response to an inquiry, an administration official confirmed the mayor’s opposition to the legislation…The City Hall official, who would only speak on background, stressed that the mayor supports the NYPD but views the bill, as written, as cost-prohibitive.

A source in the Assembly confirmed to Capital that aides to the de Blasio phoned on Tuesday to state the mayor’s opposition.

“They’re not supportive of the bill at all. It’s based on the assumed cost of the legislation,” said one source within the State Assembly.

City Council Speaker Melissa Mark-Viverito, who typically votes pro-union, said she has not yet determined her position on the bill.

In fact, not even the bill’s sponsor, Marty Golden (R-Brooklyn) seems to want to discuss it.

“We are looking at it and trying to get it out,” Golden told the New York Post. “We’re discussing it, and I don’t want to go any further than that as to the purpose of the changes.”

Police disability pensions are an especially sensitive issue because of several recent events that have exposed disability fraud in New York City. In January, a state investigation revealed that as many as 1,000 public workers had been collecting fraudulent disability payments to the tune of $400 million.

The retired New York City police officers and firefighters showed up for their psychiatric exams disheveled and disoriented, most following a nearly identical script.

They had been coached on how to fail memory tests, feign panic attacks and, if they had worked during the Sept. 11, 2001, terrorist attacks, to talk about their fear of airplanes and entering skyscrapers, prosecutors said. And they were told to make it clear they could not leave the house, much less find a job.

But their Facebook pages told investigators a starkly different story, according to an indictment and other court papers.

Former police officers who had told government doctors they were too mentally scarred to leave home had posted photographs of themselves fishing, riding motorcycles, driving water scooters, flying helicopters and playing basketball.

More recently, a Journal News investigation revealed that 25 retired cops and firefighters in the Lower Hudson Valley were collecting disability pensions of over $100,000. Some of those retirees claimed disability stemming from incidents years before they retired, and were healthy enough to put in a large amount of overtime hours their last year on the job. That group of 25 retirees will collect $3.17 million in combined pension payments in 2014.

Photo by Giacomo Barbaro via Flickr CC License

Pension Choices and the Savings Patterns of Public School Teachers

The Center for Education Data and Research has released a new report analyzing the Washington state’s teacher pension system. The system is of particular interest because, since 1996, it has given every participant a choice: enroll in a traditional defined-benefit plan, or enroll in a hybrid plan that combines features of both defined-benefit and defined-contribution plans.

Pension systems around the country are increasingly giving participants a similar choice, and many more systems are thinking of turning to hybrid plans in an effort to curb future underfunding problems.

So, does a choice-based system work? What outcomes does it produce?

Find out: Read the full report here.

Photo by cybrarian77 via Flickr CC License

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