Tag Archives: pensions

Armstrong’s state pension benefits uncertain

Former Rep. Joe Armstrong’s state pension would provide him with $28,744 annually under the application he has filed, but state officials have not decided whether he is entitled to receive the benefits after a felony conviction for filing a false federal tax return.

Shelli King, spokeswoman for the Tennessee Consolidated Retirement System, said Armstrong’s application was received on Tuesday and officials are conferring with attorneys to decide whether it will be approved.

King said that Armstrong’s application opts for receiving maximum monthly benefits with no survivor benefits upon his death. If approved, she said in an email, “Rep. Armstrong will receive $2,395.34 per month based on 27 years, 10 months of service in the General Assembly” – or $28,744.08 per year.

Those making the decision will include state Treasurer David Lillard, who oversees the pension system, TCRS Executive Director Jill Bachus and others, she said, and “not just a single person.” She estimated that the process of making a consensus decision – one that might generate political controversy — could take four to six weeks.

Under state law, a legislator forfeits his or her pension benefits when “convicted in any state or federal court of a felony arising out of that person’s official capacity, constituting malfeasance in office.”

That raises the question of whether Armstrong’s federal court conviction arises out of his “official capacity” as a state legislator. The filing of his tax return, of course, was not an official duty as a legislator.

But the conviction was based on a failure to pay federal income taxes on more than $300,000 profit Armstrong made by buying, through a tobacco wholesaler, Tennessee cigarette tax stamps at the rate prior to a 2007 increase in the state cigarette taxes – which he supported as a legislator – then selling them after the increase was approved. Continue reading

TCRS missing investment return goals

The Tennessee Consolidated Retirement System, which provides pensions for more than 370,000 people around the state, has now posted anemic returns and missed investment targets for two years in a row, reports The Tennessean, and this could impact its ability to meet obligations to state workers, teachers and retirees.

In 2015, the fund generated returns of 3.3 percent, falling short of its 7.5 percent target. In the most recent fiscal year, ending June 2016, the pension earned 2.8 percent.

Despite the two years of lackluster results, Tennessee Treasurer David Lillard says the state’s pension remains healthy and that the stronger returns in previous years help cushion the recent blows. In 2014 and in 2011, for example, the TCRS more than doubled expectations, reaping nearly 17 and nearly 20 percent returns.

“The liability horizon we invest for is a very long-term horizon,” Lillard said. “Unless you are an extremely badly funded pension, you have an ability to ride out any downturns that may occur.”

Across the nation, public pension funds have struggled as interest rates stay at record lows, people live longer and lower contributions from past years haunt current returns. Moody’s Investors Service estimates unfunded public pension liabilities totaled $1.3 trillion in 2014.

In fact, Lillard calls the pension’s strength “a point of pride for Tennesseans” and his confidence in the state’s pension is not unfounded. The state has a AAA bond rating from Standard & Poor’s, Fitch Ratings and Moody’s and TCRS is ranked as one of the top four funded pensions in the nation by the Pew Charitable Trusts. As of last year, Tennessee was 99 percent funded, according to Lillard’s office, compared to the national median of 59 percent funded, reported by Moody’s.

Even so, Tennessee’s investment returns over the past 10 years is 6 percent, failing to meet the 7.5 percent target.

“We are the best house in a bad neighborhood,” said Stephen Frohsin, a principal at Woodmont Investment Counsel in Nashville.

Democrats call for blocking Durham pension

NASHVILLE, Tenn. (AP) — House Democrats in Tennessee are calling for a special session to expel a Republican lawmaker accused of sexually harassing at least 22 women to block him from receiving a lifetime pension.

Democratic Caucus Chairman Mike Stewart said Wednesday that state Rep. Jeremy Durham of Franklin will automatically qualify for a pension starting at $300 per month in November, even if he loses his primary next month.

Durham suspended his re-election campaign earlier this month after a state attorney general’s office released a report alleging that he had sexually harassed at least 22 women.

The lawmaker has said nearly all of the allegations are either false or taken out of context, but stopped short of resigning his seat. Early voting is already underway, and Durham’s name remains on the ballot.

Note: Press release below. Continue reading

House debates denying pensions to teachers, legislators for minor sex crimes

A bill denying pension benefits to teachers convicted of misdemeanor sexual crimes has been revised on the House floor to apply to state legislators as well.

The change to the bill — SB1656 — was proposed by House Minority Leader Craig Fitzhugh, D-Ripley, and endorsed by the sponsor, Rep. William Lamberth, R-Cottontown, as a “friendly amendment.” Lamberth echoed Fitzhugh’s comments that “if we’re going to hold teachers accountable,” it is only fair that legislators face the same standard.

House Republican Caucus Chairman Glen Casada of Franklin, who normally rallies GOP opposition to Democrat-proposed amendments, commended the Democratic leader for his proposal, declaring Republicans “have long worked to address to sexual harassment.”

But the bipartisan show of support for the bill and the amendment was matched by a bipartisan voicing of misgivings during Thursday’s floor debate, perhaps most notably from Reps. Bill Dunn, R-Knoxville, and John DeBerry, D-Memphis.

Continue reading

No charges against Nashville DA in pension deal

NASHVILLE, Tenn. (AP) — Nashville District Attorney Glenn Funk will not face criminal prosecution for accepting a controversial part-time job that allowed him to get a good deal on the state’s pension plan and health insurance for him and his family.

Tennessee Attorney General Herbert Slatery told local media Tuesday that Funk broke the law but won’t be prosecuted since he has agreed to pay back the benefits he received.

Investigators say Funk violated the law by working as a part-time attorney for the Tennessee District Attorneys General Conference from June to August 2014, before he took office. Slatery says Funk received state benefits for doing “virtually no work.”

Funk says he was acting on the advice of others and didn’t know that taking the job was illegal.

Seven TN educators still receiving pensions after criminal convictions

Nashville television station WSMV reports finding seven Tennessee teachers and education administrators still collecting state pensions after conviction of crimes related to their jobs.

The offenses range from falsifying records to assault to sexual battery by an authority figure.

… “This is not a loophole,” said Shelli King, the spokesperson for the Department of Treasury. “We are following the letter of the law.

(State law bans pensions for persons convicted of felonies related to service in a public office, but it doesn’t apply to those “grandfathered” into pension systems before the conviction in some situations. And it doesn’t apply to misdemeanor convictions. Two of the cited cases were misdemeanors.)

…“They need to be held accountable,” said Senator Jim Tracy, R-Shelbyville.

Tracy said he is considering drafting legislation after reviewing the I-Team’s findings. Tracy, a former teacher, serves on the Senate Education Committee.

“I think teachers should be held to a high standard so the parents can have confidence in the system,” Tracy said. “If you betray this trust – if you betray the citizens’ trust – you don’t deserve those benefits.”

The I-Team reached out to all the former educators featured in this report. No one responded by deadline, but we did find Mary Ann Williams at home.

“What do you think the victims would say, the people who accused you of child abuse?” asked Autler. “Do you think they would agree that it’s OK you keep receiving pension?”

“I don’t know,” Williams said.

The former Lewis County teacher said she believes she deserves her pension because she paid into the system.

Memphis city employees sue to stop pension reduction

Five city of Memphis employee unions frustrated over benefits cuts sued the city Thursday to stop a reduction in the pension benefits for some employees from taking effect, according to the Commercial Appeal.

In front of the Shelby County Courthouse, flanked by statues of “Authority” and “Justice,” union leaders said the Memphis City Council’s Dec. 16, 2014 vote to cut benefits for employees hired since Jan. 1, 2009 violated the state constitution, the city’s pension ordinance and the city’s duty to pensioners.

Thomas Malone, president of the Memphis Fire Fighters Association, said the lawsuit “strikes an important blow” for employees, who are leaving the city en masse for other jobs because of the cuts. In the last four years, close to 300 firefighters left because of the cuts, union leaders said.

“We think once this lawsuit is settled, that we’ll be able to recruit and retain our employees because they’re getting what the deserve, what they signed on for,” he said. “This is something that has been taken away from them, and we say it’s illegal. That’s why we’re filing, and we’ll have our day in court.”

The lawsuit asks for an injunction to stop the city from moving newer employees from a defined benefit plan to a hybrid defined benefit and defined contribution plan July 1.

The lawsuit is the latest broadside in the unions’ attempts to stop Memphis Mayor A C Wharton’s administration from reducing benefits to help make up a $54 million gap between the $20 million the city was paying per year into its pension fund and the amount it needs to fully fund pensions — $73.9 million in the fiscal year that ends June 30, 2016.

The state gave the city until 2020 to make up the annual funding gap, which the council narrowed to $27.4 million when it approved a $46.5 million contribution for the fiscal year that ends June 30, 2016.

City officials estimate the pension changes would free up $5 million to $6 million that could help fill the funding gap.

Auditors: Claiborne County ignored mandated employee retirement benefits

News release from state comptroller’s office
Dozens of Claiborne County employees were not participating in the Tennessee Consolidated Retirement System (TCRS) according to an audit just released by the Tennessee Comptroller’s Division of Local Government Audit.

Comptroller auditors found that 52 full-time employees of Claiborne County and six full-time employees of the Highway Department were eligible for participation, but were not included in TCRS. Claiborne County did not comply with the mandatory TCRS membership requirements, which are established by state statute (Title 8, Chapters 34-37, Tennessee Code Annotated). This resulted in a finding of material noncompliance.

County officials informed auditors that employees had been given the option to participate in the pension plan, and they were unaware that participation was mandatory.

Due to this issue, auditors were unable to determine if Claiborne County’s pension liability was recorded correctly. This resulted in qualified opinions on the county’s financial statements.

Auditors also wrote two findings that were repeated from last year’s audit report. These findings are related to employees’ accrued leave balances exceeding the maximum provided by the county’s personnel policy, and an inadequate separation of financial duties in four county offices.

“County leaders and Highway officials must ensure their adherence to state law,” Comptroller Justin P. Wilson said. “I encourage Claiborne County officials to contact the TCRS to create a plan to correct this situation.”

To view the audit online, go to: http://www.comptroller.tn.gov/la/

TSEA bashes Haslam bill on state employee retirement

News release from Tennessee State Employees Association:
NASHVILLE – Recent legislation filed by Governor Haslam’s administration, if passed, would significantly reduce benefits for future state employees. When combined with other recent benefit reductions filed by the administration, two different classes of state employees will exist.

House Bill 648 eliminates all state-funded health insurance plan options for retiree eligible state employees hired on or after July 1, 2015. Currently, the state pays 80% of the premium for retirees with 30 or more years of service, 70% for retirees with 20-29 years of service; and 60% for retirees with 10-19 years of service.

“If the Governor’s latest bill passes, a retiree health insurance plan will no longer be available from the state for future state employees,” said TSEA President Bryan Merritt. “By continuing to reduce benefits for future employees, the state is essentially creating a second-class of state employees. Seemingly, this administration tries to avoid legislative opposition by drafting legislation which strips benefits from future state employees who have no way to object. If it is bad for current employees, it is bad for future employees.”

Future retirees would also no longer be eligible for the state’s Medicare supplement plan, which equates to a loss of $25-$50 in monthly premium support from the state. In addition, under the bill the state may deny coverage to a state employee’s spouse who is eligible for similar group health insurance through the spouses’ employer.
Continue reading

Nashville DA to reimburse state for part-time job earnings

NASHVILLE, Tenn. (AP) — Nashville District Attorney Glenn Funk says he will reimburse the state of Tennessee for a controversial part-time job he was given before becoming D.A. that allowed him to get a good deal on the state’s pension plan and health insurance for him and his family.

Funk has come under fire for the last few weeks over the deal. Ten Metro Nashville Council members have asked the governor and the state attorney general to appoint a special prosecutor to investigate Funk, and state lawmakers have demanded that he explain the pension deal.

WTVF-TV (http://bit.ly/1MNSK1J ) reports that Funk wrote a letter to state Sen. Brian Kelsey saying he would reimburse the state and go under the new pension system. Funk has always maintained that he did not do anything wrong.