TEXPERS rejects Texas Public Policy Foundation’s call for radical departure from existing pension policies

Max Patterson, executive director of the Texas Association of Public Employee Retirement Systems (TEXPERS), today rejected the Texas Public Policy Foundation’s (TPPF) call for transition from defined benefit plans to defined contribution models for state and local public employees. Patterson issued his remarks after the TPPF distributed a paper that purports to “reform” Texas’ state and local pensions.

“The TPPF is incredibly out of touch with the economic conditions of Texas,” Patterson said. “Their assessment of the Pension Review Board’s unfunded liabilities reports took two snapshots in time and found there was an 8 percent decrease in the funded status of all Texas state and local pension systems from early to late 2014. Unfortunately, that type of fluctuation can occur very quickly in today’s global debt and equity markets and is not indicative of anything meaningful, other than the market volatility which all systems encounter. Thus the TPPF’s call for transition to defined contribution plans for new employees is incredibly short-sighted.”

“In the interest of developing good public policy, TPPF might first consider asking Texas cities how difficult it has been to recruit new able-bodied employees to police, fire fighting, and strenuous municipal jobs given the incredible competition with the shale-oil boom around the state,” Patterson said. “Moreover, the hiring crisis in many cities is causing an increase in overtime for senior employees, which is rippling through municipal finances and their pension outlays. The TPPF doesn’t even consider these dynamics,” Patterson said.

Patterson noted the recent appointment of Senator Kirk Watson to the Senate Finance Committee and applauded his stated goal of protecting the pension of state employees and teachers. Patterson said Watson and others recognize the need for changes to the Employee Retirement System in this legislative session.  

“The state of Texas needs to set the right example for local pensions by providing the necessary funds to retirement systems they established. If the Texas Public Policy Foundation were interested in developing good public policy, they might first look at how much of the downturn in funded status has occurred because of government entities taking contribution holidays. That is the true source of the larger problem of funded status shortfalls, not short term indicators that fluctuate with market conditions.”

TEXPERS’ Max Patterson saluted as ‘Champion’ of pension security

TEXPERS yesterday distributed a press release which acknowledged that CORPaTH recognized Max Patterson as a "Champion" of pension security.

You can see the complete press release here.

You can also see the video that CORPaTH produced featuring Patterson for its award ceremony in December by clicking on the image below.

IAFF video worth the watch for those concerned about retirement security

Short documentary films have earned their place as great communications tool for complex subjects. 

As such, we recommend your viewing a 13-minute educational piece on public employee pensions, their history, the retirement crisis facing the American worker, and the threats to a retirement instrument that is actually working for public sector employees. The video was created by the International Association of Firefighters and provides comments from David Crow, the president of the Arlington Fire Fighters Local 1329 and Diane Oakley, the executive of the National Institute on Retirement Security, among others.

http://youtu.be/Xtl7ZfiYrxc

Laura and John Arnold Foundation lose $1 million in Phoenix campaign, but they have plenty more to spend

So far, the Laura and John Arnold Foundation has not actively participated in any election in Texas regarding public employee pension plans. At least not to our knowledge. But given their method of operation in other states, we’d bet it won’t be long before they enter the fray here. It’s just a matter of finding a local champion for their cause.

As example of what they are up to, consider the Reuters report Wednesday that the LJAF spent $1 million in Phoenix to pass Prop. 487, a measure to change the non-safety employees’ defined benefit pension system to a 401(k). Somehow the effort raised another $400,000 as well. 

Nonetheless, Phoenix voters rejected Prop. 487 by a large margin, 56.5 to 43.5%. The pension was noted as being 62% funded, which is not comparatively bad compared to some other pensions' funded status. As long as the funded ratio’s trend is in the right direction, with the city and employees working to make the ARC each year, the pension should be able to meet its obligations in the future.

The Phoenix venture was just one of many elections that the Arnold Foundation has participated in. They have been busy in Rhode Island, Florida, California, and Kentucky.

We mention this because we believe it’s only a matter of time that they enter an election in Texas. They are just looking for the right race horse to carry their message. – Max Patterson