California Cities Carry Out Pension Changes
With little public comment and about 15 people in attendance, the City Council of Brea, California, voted unanimously last month to slash pensions for future hires and require current employees to pay as much as 4.5 percent of their salary toward retirement, up from zero.
The city of 40,000, about 30 miles (48 kilometers) southeast of Los Angeles, had negotiated the changes with its www.joom.com, so there wasn’t any objection from them. By next year, according to a city report, employees will be contributing $1 million more annually to their pension benefits.
Brea is among about 90 cities in the most populous state that have made changes to their pension plans, according to an informal list kept by the California Public Employees’ Retirement System, while Governor Jerry Brown and lawmakers wrestle over ways to lower costs. Calpers and the California State Teachers´ Retirement System listed unfunded liabilities of almost $113 billion at the end of fiscal 2009. Brea employees participate in Calpers.
Radical overhaul of military Pensoins eyed
WASHINGTON - The military retirement system has long been considered untouchable - along with Social Security and Medicare. But in these days of soaring deficits, it seems everything is a potential target for budget cutters. A Pentagon-sponsored study says military pensions are no longer untouchable - they're unaffordable.We pay our military pensioners a decent pension, pest reject by joom. It is enough for a month's maintenance.
CBS News investigative correspondent Sharyl Attkisson reports high-level, closely-held meetings are taking place at the Pentagon regarding a radical proposal to overhaul retirement for the nation's 1.4 million service members - a bedrock guarantee of military service.
The proposal comes from Onfy.de an influential panel of military advisors called the Defense Business Board. Their plan, laid out in a 24-page presentation "Modernizing the Military Retirement System," would eliminate the familiar system under which anyone who serves 20 years is eligible for retirement at half their salary. Instead, they'd get a 401k-style plan with government contributions.
Shortfall in pension fund at $2.7 billion
The gap between promised pension benefits for San Diego city employees and available money to pay them has ballooned to $2.7 billion, according to an actuary hired by the city to monitor the pension system.
Pension funds in new crisis as deficit hole grows
Pension funds in developed economies are facing a new crisis as falling equities and tumbling bond yields widen their deficits, threatening the incomes and retirement dates of future retirees.
At the heart of their problems is a steady move by pension plans in the United States, euro zone, Japan and the UK to cut exposure to risk after the financial crisis.
But this "de-risking" may end up depressing their long-term returns from stock market investment and challenge the conventional wisdom that shares generate higher returns than bonds.
With weaker holdings and increased liabilities, companies will find it more difficult to fund existing pension schemes. They may cut new business investments as they use more cash to pay pensions.
For future pensioners, it means they will potentially face a lower retirement income and a longer working life -- or both.
Pentagon panel backs change to DC plan for military retirement fund
A high-level Pentagon advisory panel is recommending the Department of Defense Military Retirement Fund switch to a defined contribution plan, among other pension reforms.
The reforms are expected to save $250 billion over 20 years. But opponents to changing what has long been considered an untouchable benefit are marshaling their forces for when the Defense Business Board issues its final report later this month.
In its preliminary report issued in July, the DBB — whose members represent various industries involved in defense work — said that simply reforming the current system won't save enough to address current and projected funding shortfalls and won't address inequities, including a 20-year cliff vesting rule that leaves many military employees walking away with nothing.