Monday, July 2, 2018

Illinois Legislators: Take a Look at North Carolina’s and Oregon’s Solvency Funds for Pension Unfunded Liabilities

“North Carolina has a new trust fund to help pay down unfunded liabilities for the pension system and health-care costs, thanks to a law signed Monday by Gov. Roy Cooper.

“The Unfunded Liability Solvency Reserve Act creates a reserve that will be funded through several sources, including General Assembly appropriations, overflows from the state's rainy day fund, or savings from refinancing of general obligation bonds. Between pension and health care, the state has $50 billion in unfunded liabilities, $35 billion in health care alone.

The solvency fund is believed to be the only one of its kind in the nation, according to state Treasurer Dale Folwell, who credited the General Assembly and the governor for their leadership. ‘Today, we begin to make a generational difference for all North Carolinians and lead the nation in addressing $50 billion in unfunded pension and health-care costs. Our office didn't create or discover these liabilities, but we have an obligation to fix them,’ Mr. Folwell, sole trustee of the $97.9 billion North Carolina Retirement Systems, Raleigh, said in a statement.”

“The Oregon Legislature passed a bill aimed at reducing the $74.6 billion Oregon Public Employees Retirement Fund's unfunded liability.

“The bill sets up two new funds, a side account for school districts to be invested alongside pension assets to reduce school district's pension contributions, and an incentive fund to match certain lump-sum employer contributions to the pension plan.

“Gov. Kate Brown, who helped champion the legislation, is expected to sign it in the next couple of weeks after the bill undergoes the typical legal review process, said Bryan Hockaday, press secretary for Ms. Brown, in an email.

Some of the revenues to be directed to the school district fund include some proceeds from debt collection, capital gains tax, estate tax, marijuana tax, alcohol taxes and lawsuit settlements, as well as lottery revenues.

“The incentive fund is designed to give employers an incentive to make an additional one-time contribution. Oregon would match the extra contribution 25 cents on the dollar.

“The bill also directs the state treasurer to study the feasibility and prudence of borrowing money in the Oregon Short Term Fund, a $15.7 billion short-term cash investment pool in which a number of local governments and state agencies participate, to be redeployed into investments. The state treasurer is to report the results of the study to the Legislative Assembly no later than Sept. 30, 2019.”

1 comment:

  1. -Revamp the flawed Pension Ramp.
    -Focus on why the State of Illinois cannot obtain more revenue.
    -Pass a graduated rate income tax like the majority of states in this country.
    -Expand the state’s tax base.
    -Increase taxation on the wealthy.
    -Eliminate the tax loophole for “Tax Increment Financing Districts.”
    -Eliminate “Edge Tax Credits” and other tax loopholes for large corporations in Illinois… (from May 12, 2015: What Should Illinois Legislators Do Now Since They Cannot Break a Constitutional Contract with Retirees and Public Employees?).