The Securities and Exchange Commission said the action was its first ever against a state, and only its second against any government over the handling of a public pension fund. The first was the city of San Diego. More may be in store; the agency announced in January that it had a special unit looking into public pension disclosures. The S.E.C. has been trying to assume more authority over municipal securities.

(Webmaster:  This is an interesting and alarming article about New Jersey.  It is worth viewing.  Read the comments section as well.)

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The year 2008 may be fading in our collective memories, but its effects on public pension plans linger, and retirement systems and their plan sponsors continue to assess and respond to its consequences. These responses generally revolve around efforts to address higher pension costs needed to amortize higher unfunded liabilities resulting from the market decline. However, other factors are driving the need for changes at many plans, especially a) chronic failure by some plan sponsors to make required contributions, and b) approval of benefit levels that plan sponsors either would not or could not pay for.

The New York Times has been running a series of article dealing with the financial challenges facing local and state governments. They make for interesting reading as they point out some of dangers facing us. Fortunately, Washington State’s pension system remains in good health.  See the full article for reviews of this series and links to the articles.

On May 7th Matt Smith, the Washington State Actuary presented a review of the status of the LEOFF 1 Pension Plan at the the Washington State LEOFF 1 Education Association Conference. We were disappointed beause our schedule did not permit us to remain for the last day of this conference and Matt's presentation.  It turns out we did not miss much.

This is a general article about pension funding that was produced by Boston College.  It really does not apply to LEOFF 1, at least not specifically but the article does provide a good deal of in-depth pension funding information for those who are interested in following the issue.

The Government Accounting Office (GAO) on March 2, 2010 published an updated report to Congress titled State and Local Governments' Fiscal Outlook. In summary it states: Fiscal sustainability presents a national challenge shared by all levels of government. Since 2007, GAO has published longterm fiscal simulations for the state and local government sector. These simulations show that, like the federal government, the state and local government sector faces persistent and long-term fiscal pressures. Using the Bureau of Economic Analysis's National Income and Product Accounts (NIPA) as the primary data source, GAO's model projects the level of receipts and expenditures for the sector until 2060 based on current and historical spending and revenue patterns.

Since 2007, investment losses and the weakness of state and local government revenues have produced extraordinary stress for public retirement funds in the United States. This stress magnified the funding issues retirement funds encountered because of the recession at the turn of the century.

The vast financial losses and uncertainty during the last year have forced all generations to reassess the funding, timing, and purpose of retirement. At this pivotal moment, Age Wave launched Retirement at the Tipping Point: The Year That Changed Everything™, a landmark national study conducted by leading research firm Harris Interactive.

The Public Fund Survey is an online compendium of key characteristics of the nation's largest public retirement systems and is sponsored by the National Association of State Retirement Administrators and the National Council on Teacher Retirement for the purpose of increasing knowledge and understanding of the public pension community.

NASRA Releases Results from National Survey of Public Pension

Public pension funding levels have declined according to this year’s Public Fund Survey, an annual overview of public pension plan financing, membership and design. This year's summary is the first following the sharp drop in global investment markets that occurred in 2008. The survey is an online compendium of key characteristics of the nation's largest public retirement systems and is sponsored by the National Association of State Retirement Administrators (NASRA) and the National Council on Teacher Retirement.

According to the report, the 2008 fall in pension asset values has caused aggregate public pension funding levels to move downward from 86.7 percent in FY 2007 to 85.3 percent in FY 2008. Because public pension actuarial methods are designed to temper the effect of market volatility, public pensions will recognize the investment losses incurred in 2008 over several years. During this recognition period, funding levels are expected to decline, although losses may be partially offset with investment gains.

The author anticipates that future funding levels will also be influenced to the extent sponsoring state and local governments consider adjustments to benefit levels and financing arrangements, such as reduced benefits for future hires, reduced future accruals, and/or higher contributions for both employers and employees.

View the entire report by clicking here.