Tag Archives: pension

Lawmakers Approve Changes to State Retirement System

The House has approved and sent to the governor for his signature a bill that changes the pension system for state employees and teachers hired after July 1, 2014.
Drafted by state Treasurer David Lillard, SB1005 would create what is described as a “hybrid” between the present defined-benefits plan, which guarantees retirees a fixed pension based on years of service and earnings, and a defined-contribution plan, which has no guaranteed benefit level.
The bill passed the Senate 32-0 and won 71-16 approval in the House. All no votes came from Democrats.
Explaining his no vote, House Minority Leader Craig Fitzhugh praised the proposal as well designed, but said it is simply not needed in Tennessee because the state retirement system has adequate funding — unlike those in many other states.
But Lillard and sponsors of the bill — Sen. Randy McNally, R-Oak Ridge, and Steve McManus, R-Cordova — said long-range projections show the Tennessee Consolidated Retirement System could face problems and the legislation will head them off, without affecting current state workers and teachers.

Andrea Zelinski has details on the legislation:

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Convicted Judge Seeks Reinstatement of State Pension

Just before the anniversary of one of Knoxville’s most horrific crimes, the judge who threw the case into legal chaos is now appealing the state’s move to rescind his pension, reports The News Sentinel.
“It burns me up, especially this coming upon the anniversary” of the Jan. 7, 2007, torture-slayings of Channon Christian, 21, and Christopher Newsom, 23, said state Sena. Randy McNally, a Republican whose district includes parts of Knox County as well as Anderson, Loudon and Monroe counties.
Former Knox County Criminal Court Judge Richard Baumgartner lost his pension after a jury in U.S. District Court convicted him in October of felony charges of misprision of a felony for his role in covering up a prescription painkiller conspiracy of which his mistress was a part.
His pension had been spared when, in March 2011, he pleaded guilty to a state charge of official misconduct for buying pills from a felon on probation in his court. He was granted a diversionary sentence that kept the charge off his record.
The entire case against him stemmed from a Tennessee Bureau of Investigation probe that showed Baumgartner had been committing a slew of crimes, including doctor shopping and using a graduate of the Drug Court program he helped found as his mistress and pill supplier, while presiding over trials including those of the four defendants in the Christian/Newsom case.
Revelations of those allegations and additional ones unearthed by a News Sentinel probe ultimately led to the granting of new trials for those four defendants. One, Vanessa Coleman, has already been retried. A judge is set to decide later this month if the remaining three suspects should be afforded new trials.

With Cities Pulling Out of State Pension Plan, New Options Offered

The Tennessee Consolidated Retirement System bills itself as “one of the best-funded pension plans in the nation,” but some local governments have been pulling their new hires out of the plan, reports Hank Hayes.
The city of Kingsport did. So did Johnson City and Tri-Cities Regional Airport. The reason: These cash-strapped political entities have found their contributions into TCRS to be too costly.
“Fifty-four (governmental entities) were at or above 15 percent of payroll (with TCRS employer contributions). … Speaking as a former county commissioner, that tells me they are under a bit of funding pressure,” said Tennessee Treasurer David Lillard Jr., who oversees TCRS.
For instance, TCRA’s TCRS contribution expense is almost 18 percent of payroll. The airport decided to go with a different defined contribution plan that would have a maximum 9 percent of payroll cost.
Kingsport’s and Johnson City’s TCRS pullout, in particular, got Lillard’s attention.
“These are all issues of concern to us because these are significant-size local governments, and they are entities participating in the system for many, many years — some going back to 1948,” he noted.
So Lillard hit the road last fall and did listening sessions with more than 200 local government officials about their future with the state’s pension plan.
Proposals from those meetings resulted in legislation passed this year to create three less costly investment options.
TCRS says the bill, scheduled to go into effect on July 1, would not apply to current local government hires, state employees, K-12 teachers or higher education workers. No local governments are required to make any changes. The provisions are only effective if adopted by local governments, according to TCRS.

Pension Bills Delayed in Committee

By Lucas Johnson, Associated Press
NASHVILLE, Tenn. — Proposals to change the retirement system for public employees in Tennessee stalled Monday in the Legislature when a joint panel of lawmakers decided they need more study of the issue.
One measure before the Joint Council on Pensions and Insurance expands the statute denying retirement benefits to state employees and officials who are convicted of a felony while in office. Under the proposal, benefits would end if there’s a guilty plea.
The state treasurer’s office had some concerns with the legislation. It said the measure could be unconstitutional on the grounds that there’s no language in the proposal to address restoration of benefits if a court later finds a person is innocent.
Senate sponsor Randy McNally, an Oak Ridge Republican and chairman of the joint committee, delayed the proposal for two weeks to address the concerns.

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Kelsey Has a New Pension Plan

(NASHVILLE, TN) December 22, 2011 – State Senator Brian Kelsey (R-Germantown) announced today he has introduced legislation that would reform the way pensions are calculated for new state employees.
The plan would be offered for new state employees but not for local government employees or for education workers. Kelsey said the proposal would establish a privately managed cash-balance plan to eventually replace the Tennessee Consolidated Retirement System defined benefits plan, participation in which would continue to remain available for current employees.

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Legislators Move Against Drugged Judge’s Pension

Two state legislators say former Knox County Criminal Court Judge Richard Baumgartner exploited a loophole in state law to collect a $58,800 annual pension and they want to close it.
Sen. Randy McNally and Rep. Bill Dunn have also asked officials for investigations into whether Baumgartner should face further charges and into whether the payments he authorized for defense attorneys in the 2007 Channon Christian-Christopher Newsom murder trials are valid.

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TVA Workers Don’t Like Pension Plan

TVA employees, already under a federal wage freeze, may be required to contribute to their pension for the first time in the plan’s 72-year history if Congress accepts a deficit-cutting measure proposed by President Barack Obama, reports the Chattanooga TFP.
Beginning next year, the U.S. Office of Management and Budget wants TVA workers to pay 1.2 percent of their salary into the retirement system over three years as part of a plan to cut the federal deficit by $21 billion over the next decade.
“The president believes we all must pitch in to get our economy moving again,” OMB spokeswoman Moira Mack said.
But TVA employee unions claim the proposal amounts to an unfair $12 million pay cut that won’t affect the federal deficit because TVA is a self-funding, independent federal agency.
“TVA’s operations today do not and cannot contribute to the federal deficit, and no reason has been advanced to justify sweeping TVA employees into the deficit reduction plan,” said Steve Stutts, president of the Trades and Labor Council for annual employees of TVA.

City Official Collects Retirement Despite Sexual Harassment

The city of Chattanooga will pay its former General Services Director, Paul Page, nearly $12,000 a year for the rest of his life even though he retired after a federal finding that he sexually harassed one employee and was disciplined for harassing another, according to the Chattanooga TFP.
Page worked for the city for six years and was vested in its General Pension Fund automatically after five years. He’s eligible for $11,549 annually, or $962 a month, based on his highest three earnings years. Those were 2008-10.
Even if Page had been fired, his benefits would not have been affected, said Doug Kelley, the city’s personnel records specialist.
“That has no effect on your general pension or your eligibility for benefits,” Kelley said.

TN Pension Plan Deemed in Good Shape Despite Stock Market Turmoil

By Lucas Johnson, Associated Press
NASHVILLE, Tenn. — Tennessee financial officials say they’re confident the state’s pension plan is in good long-term shape despite the recent Wall Street sell-off and the likelihood of continued stock market volatility.
The financial storm is causing uneasiness among many state fund managers still trying to recover from steep losses during the recession. California’s main public employee pension fund, the nation’s largest, has lost at least $18 billion in its stock portfolio since July 1.
Some state officials are concerned taxpayers may have to foot the bill for billions in unfunded liabilities for government retirees.
But Steve Curry, assistant to the Tennessee treasurer, said Friday the state is faring better than most because of its conservative portfolio, which is made up of about 42 percent bonds.

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Lillard: TN Pension Plan in Far Better Shape Than Some Claim

While state Treasurer David Lillard says the $32 billion Tennessee Consolidated Retirement System ranks among the best pension plans in the nation, there’s also some bad news.
From Richard Locker:
The plan has been fully funded since its creation in 1972, but two years of bear-market losses in its investment portfolio — minus-1.2 percent in 2008 and minus-15.3 percent in 2009 — left it with a $2.7 billion unfunded liability on paper that the state will amortize over 20 years.
That number could be reduced if investment earnings average better than the projected 7.5 percent. (Earnings rebounded to 10 percent in fiscal 2010 and 13 percent the first half of fiscal 2011.)
The $2.7 billion is far less than a $30.5 billion shortfall attributed to the Tennessee plan by the conservative American Enterprise Institute and $23.2 billion claimed by a pair of Northwestern University economists whose analysis Lillard said was flawed. Both claims have been used by a coalition of “free market” groups campaigning to end pensions for public workers.
Lillard, a Republican and former Memphis tax attorney, said the TCRS has a “conservative benefit structure that does not produce pension abuse found in several other states. We don’t have, as California does, any fire chiefs who have retired with $200,000-plus in pension benefits.”
…TCRS will pay out just over $1.5 billion to 112,133 retirees this year, an overall average of about $13,720 a year. Most covered retirees worked for the state for at least five years (the minimum to qualify) but less than 30, or retired years ago at lower benefit levels.