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

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

Jacksonville Pension Reform Vote Delayed by Council

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

Video: Raimondo Talks Pension Settlement, Defends 2011 Reforms

In this interview, new Rhode Island Governor Gina Raimondo discusses the amount of fees the pension system pays to Wall Street managers and defends her pension reforms (2:00 mark); she also talks about a possible settlement with the retirees suing the state over those reforms (3:20 mark).

Photo by By Jim Jones (Own work) [CC BY-SA 3.0]

Lawyers Meet With Judge As Jury Trial in Rhode Island Pension Lawsuit Nears

The long-running lawsuit over Rhode Island’s 2011 pension reforms is set to begin on April 20.

Lawyers will eventually argue the law’s constitutionality in front of a jury. But on Tuesday, the lawyers met with the judge presiding over the case to hammer out scheduling matters as the pretrial process continues.

From WPRI:

Lawyers on both sides of the high-stakes lawsuit challenging Rhode Island’s landmark 2011 state pension overhaul met with the judge behind closed doors Tuesday morning as the pretrial process continued.

John Tarantino, a lawyer representing the state, told WPRI.com the jury trial is still on track to begin April 20, as ordered by R.I. Superior Court Judge Sarah Taft-Carter last month.

[…]

Tarantino said Taft-Carter scheduled four pretrial hearings in the suit during Tuesday’s status conference: for Feb. 6, on motions by various municipalities to be removed as defendants; for Feb. 20, on motions to consolidate; for March 6, for advance rulings about the trial; and for March 27, on dispositive motions.

At Tuesday’s status conference, more than two dozen lawyers involved in the case spent about forty minutes meeting with Taft-Carter in a closed courtroom to work through scheduling matters. Taft-Carter made no rulings in the case on Tuesday. She previously said the process for discovery of evidence will end on March 15.

Taft-Carter had previously set a Sept. 15 trial date for the suit but scrapped it as the sides got tied up in pretrial matters.

It’s highly likely the outcome in Superior Court will be appealed to the R.I. Supreme Court no matter which side wins. However, state and union leaders say there is also growing momentum in favor of making another attempt to end the suit with an out-of-court settlement. Raimondo has said she is still open to settling but does not want to change the terms of the settlement agreement that failed last year.

The lawsuit was originally filed in June of 2012 by hundreds of retirees and union members who argue that the state’s reforms aren’t constitutional.

Photo credit: “Flag-map of Rhode Island” by Darwinek – self-made using Image:Flag of Rhode Island.svg and Image:USA Rhode Island location map.svg. Licensed under CC BY-SA 3.0 via Wikimedia Commons

City Council Shakeup Could Affect Jacksonville Pension Reform

Jacksonville Councilman Johnny Gaffney is stepping down from his post next month.

Gaffney was likely to vote in favor of the city’s pension reform measure. But with his departure, the chances of the measure passing become murkier.

There are 19 seats on the Council, and the measure needs 10 votes to pass.

From the Florida Union-Tribune:

Because Gaffney ran for the Legislature — unsuccessfully, as it turned out — he must step down from the council next month, making Feb. 10 his last City Council meeting.

There’s no guarantee that the council will be ready by then to cast votes on pension reform, so Gaffney might be off the council before the final decision.

Gaffney’s impending departure is just one of the moving pieces Brown faces as he strives to secure 10 votes on the 19-member council. Some City Council members have already said a counter-offer made last week by the Police and Fire Pension Fund is dead on arrival.

[…]

The pension legislation approved 16-3 by the City Council last month would let City Council impose further benefit cuts on current police and firefighters in three years.

The pension fund’s counter-offer would prevent the council from unilaterally imposing further benefit cuts for 10 years. The pension fund called that a big concession because it shortens the existing agreement running through 2030.

City Councilman Bill Gulliford said that, in his view, three years is the maximum term for benefits allowed by state law, so it’s a non-starter for him to approve a 10-year provision.

“I’m not going to vote to codify something that most people feel is illegal,” he said. “Some really bright legal minds feel it’s illegal. Every other jurisdiction in the state operates under the three-year directive. What’s so special about our folks? Why do they have to be 10?”

City Council members Bill Bishop, Lori Boyer, John Crescimbeni, and Matt Schellenberg also said they have a real problem with any term longer than three years for pension benefits. Along with Gulliford, they voted in December for the council-approved version of pension reform.

If the reform measure isn’t passed, the city may decide to go directly to unions to negotiate pension changes.

Photo by pshab via Flickr CC License

Stakeholders Listening for Hints on Pension Reform in Chris Christie’s Annual Address

Chris Christie will deliver New Jersey’s “State of the State” address on Tuesday. The question on the minds of lawmakers, labor leaders and public workers is: how much will he reveal about his plans for reforming the state’s pension system?

Christie indicated over the summer that a new round of pension reforms are necessary, and they would likely involve benefit cuts.

But new details have been scarce, and the state’s Pension and Benefit Study Commission hasn’t released its recommendations.

From NJ.com:

When Gov. Chris Christie delivers his 2015 State of the State address Tuesday, lawmakers and public workers will no doubt be listening for remarks on pension reform.

On the eve of that speech, and months after a commission’s report on recommendations for the ailing pension system was expected to be released, legislators, union leaders and lobbyists say they are expecting to hear from the governor on one of the biggest issues facing Trenton. Christie’s office has not yet provided any details about his annual address to the state Legislature.

The governor made mention of the ailing public employee pension system nine times in his 2014 address, proposing to crack down on pension fraud and engage on pension reform.

“If we do not choose to reduce our soaring pension and debt service costs, we will miss the opportunity to improve the lives of every New Jersey citizen, not just a select few,” he said at this time last year.

The debate over pensions heated up again last spring when a budget gap suddenly erupted and Christie cut back on payments that were promised in a highly touted pension reform law he signed in his first term.

Since late summer, recommending ideas about overhauling public worker pensions has been the job of a bipartisan commission Christie designated. The commission issued a report in September laying out the severity of the state’s unfunded pension and health benefit liabilities, but has not released a final report with recommendations. The commission’s chairman Thomas J. Healey did not return calls for comment.

The state is shouldering $83 billion in pension liabilities, as measured by new GASB accounting rules.

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

Video: State and Local Pension Reform – Can We Cut Costs and Improve Retirement Security?

This panel discussion, held by the Urban Institute, talks about pension reform at the state and local level. What do they mean for retirement security? And is there a way to cut costs for government without jeopardizing retirement security?

Panelists include researchers from the Brookings Institution, the Center for Retirement Research and the Urban Institute.

Cover photo by Matthias Ripp via Flickr CC License

Raimondo Seeks Pension Settlement, But Has “No Interest” In Negotiating Changes to Reforms

Rhode Island Gov. Gina Raimondo said during an interview Wednesday that she is still hoping for a settlement with public workers in the lawsuit over the state’s 2011 pension reforms.

But while she is willing to settle, she has “no interest” in re-opening negotiations on the reforms.

From NBC 10:

She said during a taping of “10 News Conference” that she is pushing to have pension reform settled, but she is not calling for negotiations.

Raimondo and other state leaders have said they would like to see the pension reform lawsuit settled out of court, and a deal was negotiated that was approved by a majority of the unions involved. But one unit rejected it, scuttling the deal.

The incoming governor says that deal is the best that she will agree to. When the agreement was announced nearly a year ago, she said it preserved the bulk of savings for taxpayers. And as far as she is concerned, while she would prefer to have all sides agree to those terms, she is not willing to offer unions and retirees anything better.

“I have no interest in changing the terms of that,” Raimondo said. “Otherwise, we can go forward with the litigation. The state has a very strong case. But it’s in everyone’s interest to have some finality.”

Raimondo said she will reach out to all the parties to try to reach agreement, but admits it may not be possible. But it’s something she’d like to get finalized soon.

The state’s 2011 pension reforms were especially controversial because they applied to all workers and retirees, not just new hires.

Photo by By Jim Jones (Own work) [CC BY-SA 3.0]

Virginia Retirement System Director Steps Down After 10 Years

Robert P. Schultze, longtime director of the Virginia Retirement System, said Tuesday that he will be stepping down from the job to take a new position as the president and CEO of a national retirement company.

VRS will begin searching for a new director this week.

From DailyProgress.com:

Virginia is losing the leader of the retirement system it operates for more than 600,000 state and local government employees.

Schultze, 64, has led VRS since 2005, guiding it through an economic recession that slashed its financial assets by $16 billion and a series of political reforms that reshaped pension benefits for most newly hired state and local government employees, including teachers.

“Bob has been a strong hand at the tiller,” said R. Ronald Jordan, executive director of the Virginia Governmental Employees Association, representing more than 100,000 state workers and retirees. “State employees will miss him as a friend.”

The board of trustees of the $66 billion retirement system will begin a national search for a successor to Schultze this week. His annual salary is $175,709, and he is eligible for a $50,000 performance bonus, which would be paid into a deferred compensation plan.

[…]

Schultze will become president and chief executive officer of ICMA-Retirement Corp., which manages and administers more than 9,000 retirement plans, including the hybrid retirement plan that took effect Jan. 1, 2014, in Virginia as a result of sweeping pension system reforms in 2012.

VRS chose ICMA to manage the hybrid plan — combining traditional defined pension benefits and 401(k)-type contributions — and the system’s deferred compensation plan two years ago. A year later, the company’s president and CEO, Joan McCallen, announced her retirement, creating an opening that Schultze was chosen to fill.

“It’s kind of an opportunity that I thought would never come around for me,” Schultze said. “So when it landed in my lap, I decided I’d better pursue it.”

The Virginia Retirement System manages $66 billion in assets for 600,000 public employees.

Photo credit: “Flag of Virginia”. Licensed under Public Domain via Wikimedia Commons – http://commons.wikimedia.org/wiki/File:Flag_of_Virginia.svg#mediaviewer/File:Flag_of_Virginia.svg

Pension Board Changes Might Be “Deal Killer” For Jacksonville Reform

On Monday, the Jacksonville Police and Fire Pension board made several changes to the city’s pending pension reform measure and sent it back to city council for approval.

But the changes could be a “deal killer”, according to one council member.

One major change was the length of time the measure would be in effect. The council wanted three years, but the board changed it to ten.

Reported by the Jacksonville Daily Record:

“If it’s not at least 10 years, I’m not voting for any of it,” said Lt. Richard Tuten III, the firefighter’s representative on the board.

Police representative Chief Larry Schmitt and fifth member Nat Glover also were leaning that way — a majority.

That vote would mean the meat of council’s decisions had been undone, a move board Chair Walt Bussells said might doom reform and leave it for a judge to decide.

So, he asked members to reconsider the benefit components. The board did and approved rates that weren’t what council passed, but did eliminate fixed guarantees.

It didn’t budge on the length of the deal, though. And that could be a “deal killer,” said council member Lori Boyer.

“If that’s the case, then that’s a real big problem for me,” she said.

Boyer maintains state law says such deals can’t extend beyond three years. And like the police and firefighters who uphold the law on a daily basis, she says she took an oath to do the same.

“We can’t start putting politics above the law,” she said.

She said she possibly could handle changes to the benefits side, but without the three-year term it’s a non-issue.

Council member Bill Gulliford authored the amendments to those benefit changes on cost-of-living adjustments and DROP. He said if the only issue had been the former, he probably could have lived with it. But all the tweaks?

“I can’t buy the changes, I’m sorry,” he said.

After council passed what he thinks was the best offer, he said he thought the board’s decisions rendered the deal “dead.”

“I think council pretty much spoke,” he said, referring to the 16-3 vote in December that passed the deal the pension board weighed in recent weeks.

Both the council and the pension board must approve the measure before it is passed into law.

Photo by pshab via Flickr CC License

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