Friday, March 17, 2017
Monday, March 13, 2017
TEXPERS renews accreditation for mandated trustee training program
The Texas Association of Public Employee Retirement Systems recently renewed as a Texas Pension Review Board’s Minimum Education and Training Program accredited sponsor of core content training and continuing education for trustees and administrators.
The Pension Review Board is an independent state agency that oversees and reviews state and local government retirement systems and accredits training programs for trustees and administrators of public retirement systems. The PRB announced TEXPERS as a renewed accredited sponsor of core and continuing education activities Feb. 27.
The PRB mandates that a new trustee or administrator of a public pension system must take seven hours of training during their first year of service. Topic areas include fiduciary matters, governance, ethics, investments, actuarial matters, benefits administration, and risk management.
During a trustee or administrator’s subsequent years of service, they are required to take an additional four hours of continuing education every two years. Education includes these core content areas or non-core areas: compliance, legal and regulatory matters, pension accounting, custodial issues, plan administration, Texas Open Meetings Act, and Texas Public Information Act.
TEXPERS developed its Basic Trustee Training class to fulfill the requirements of the PRB’s Minimum Education and Training Program, or MET. It is offered at least twice a year before TEXPERS’ conferences.
In addition to the basic training, the association periodically offers advanced trustee training to help them meet the PRB’s continuing education requirements. Click here to learn more.
Some say public officials serving time shouldn’t receive pensions
Texas government officials convicted on corruption charges are still eligible to collect public pensions, but not everyone thinks they should be able to benefit from their retirement. Sen. Van Taylor, R-Plano, authored Senate Bill 14 that includes a provision that would prohibit convicted criminal lawmakers from receiving their pension benefits.
Jackie Wang of The Texas Tribune found several “former elected officials with prior felony convictions who are potentially collecting retirement payouts.” In an email exchange with The Texas Tribune, Taylor said the idea that criminal politicians continue to receive government pensions while serving time is “appalling.”
Some people are questioning if the bill itself is ethical, however. Is it fair to limit a person’s retirement benefits if the crime was not related to the government official’s duties? Although a person cannot collect Social Security while in prison, other retirement benefits of private citizens are not revoked if they are convicted of a crime.
And consider this: A veteran receiving retired military pay while in prison also is able to collect federal pensions, but with some exceptions, according to Miltary.com. Veterans who are convicted of disloyalty to the United States such as espionage, treason, and sabotage can lose their benefits. In other words, the charges must be related to their service to be revoked.
Publication names TEXPERS associate member ‘Plaintiff Firm of the Year’
Law firm Bernstein Litowitz Berger and Grossmann, a TEXPERS associate member, recently was named “Plaintiff Firm of the Year” by Benchmark Litigation, publisher of financial news magazines.
The publication awarded BLB&G with the title during its 2017 Benchmark Litigation awards dinner Feb. 16. The ceremony recognizes the work of attorneys, law firms, and in-house counsels during the last year.
"This prestigious award is very gratifying to our firm,” said Tony Gelderman, counsel of BLB&G. “We are truly dedicated to providing the very best service and representation to our public fund clients, many of which are Texas funds."
BLB&G is the only plaintiff firm in the United States ranked Tier 1 by Benchmark for securities litigation. Max W. Berger is the managing partner of the firm, which advises public pension funds and institutional investors on securities litigation, corporate governance and shareholder rights issues. The firm has 21 partners, nine counsels and 24 lawyers with offices in New York, San Diego, Chicago and New Orleans.
Click here to read Benchmark’s full analysis of the firm.
BLB&G is the first securities litigation firm allowed to join TEXPERS. The firm has been a member of the association since 2004.
Accounting rules may be the thorn in the foot of pension systems
The new report argues that a perceived crisis in public pensions is mainly due to misguided accounting practices mandated by the Government Accounting Standards Board, a private group that sets standards for pension accounting.
According to the report’s author, Tom Sgouros, the accounting rules were designed for the private sector and do not hold up to public sector needs. The report centers on pension obligations and the ratio between the assets and the future liabilities, or funding ratio.
Essentially, Sgouros says the rules are meant to insure against risks that public pensions systems do not face and fail to protect against the risks public pension systems do come up against. That’s because governments do not operate in competitive investment markets and there is not much of a threat of liquidation. The rules, Sgouros wrote in the report’s abstract, “also encourage ‘reforms’ that frequently do not improve the financial situation of a given pension system.”
He suggests a new accounting system be adopted that would offer a better picture of a system’s financial health and reduce the waste of overfunding.
The Week’s Ryan Cooper reported that public pensions are in better shape than people think, and cited the Haas Institute’s report. You can read Cooper’s story here and access the full Haas Institute report by clicking here.
Friday, January 13, 2017
Congress’ Pension Protection Act of 2006 may have resulted in enrollment increases into defined contribution pension plans, but it provided little relief to the retirement crisis in Texas, or elsewhere in the United States, according to a recently released brief by the National Institute on Retirement Security.
The institute’s November 2016 report examines the impact of the Pension Protection Act 10 years since enacted. Trends in defined benefit and defined contribution retirement plans for private sector workers were analyzed. As Texas legislators and local public employee pension funds debate the merits and cost of various retirement plan structures, including adopting defined contribution plans, the report’s private sector findings could serve as a crystal ball of what could happen to Texas’s public workforce.
According to the institute’s report, the Pension Protection Act made employers less willing to continue offering defined benefit pension plans, which resulted in fewer Americans with pensions. The act lead to more workers covered by defined contribution plans that use automatic enrollment in 401(k) accounts; however, that wasn’t much of a good thing. In fact, the number of households with retirement plans still fell from 55 percent in 2007 to 51 percent in 2013.
Plus, according to the NIRS brief, automatic contributions to defined contribution accounts are too little to provide most middle-class workers with retirement savings. If Texas legislators and local government pension funds decide to adopt defined contribution plans, it could mean the state’s public sector employees may not accumulate enough funds to ensure an adequate retirement income.
Read the entire report online.
The graph depicts U.S. Department of Labor and U.S. Census Bureau data regarding private and public pension contribution levels from 2005-2013. Corporate pension contributions, the green line, was much more volatile compared to public pension plan contributions during the time period.