The Transition Cost Mirage: False Arguments Distract from Real Pension Reform Debates

By their own estimates, state governments have accrued more than three-quarters of a trillion dollars in pension debt. When combined with municipal pension debt, conservative estimates of the total state and local unfunded liability top $1 trillion. While the global financial crisis and the recession that followed are partially to blame for this huge run-up in debt, structural problems with the traditional defined benefit system and irresponsible policy decisions are also culprits.Annual pension payments were on the rise well before financial markets took a turn for the worse in the fall of 2008. In fact, pension costs have been increasing almost universally since the tech bubble burst in the early 2000s signaling the end of the historic run-up of equity prices that occurred through the 1990s.Given that pension systems rely on investment returns to fund the majority of promised worker benefits, pension costs rise when the economy underperforms. Thus, recent pension cost increases have coincided with sharp declines in tax revenues that followed the financial crisis. This has put immense stress not only on state and local budgets, but also on employee wages and benefits.In the wake of rising pension costs and stagnant or declining budgets, many policymakers have questioned the sustainability of the current system. The accumulated pension debt will take decades to pay off (most states spread debt payments across 30 or more years), increasing cost in the medium- to long-term and leaving plans and worker benefits vulnerable to another downturn. In light of this challenging fiscal situation, many jurisdictions have looked to reform their retirement savings systems. The majority have maintained the traditional defined benefit structure, cutting benefits primarily for new workers, but in some cases for current employees and retirees as well. While these efforts reduce the cost of benefits, they do not address the root of the problem because they maintain the core structure that allowed the pension debt to grow so precipitously in the first place. Other more ambitious jurisdictions have sought to engage in comprehensive reform that will not just cut cost, but will also definitively fix the system, protecting workers and taxpayers alike.As policymakers have considered reforms, many concerns have been raised about transitions to different retirement savings systems. Opponents of reform have sought to derail these efforts by, among other things, claiming that any transition from the status quo would result in significant, unforeseen costs. This paper will briefly describe the major "transition cost" arguments and will explain why those arguments do not survive careful analysis

Enrollment Trends in Northwest Arkansas Charter Schools

Northwest Arkansas is home to nine public charter schools, with plans to open a new charter school for the 2020-21 school year. These schools, which serve unique missions, are some of the most highly ranked schools in the State of Arkansas. While critics argue that public charter schools segregate based on race or academic ability, national evidence finds that these claims are highly context specific. What conclusions can we draw about northwest Arkansas charter schools based on enrollment trends in recent years

How pensions contribute to the premium paid to experienced public school teachers

Many argue that public school systems should stop linking teachers’ salaries so closely to their years of experience. However, the effect of deferred retirement compensation on the premium paid to experienced teachers has, to date, been underappreciated. To shed more light on this issue, we calculate the total compensation earned by teachers in New York City and Philadelphia from both salary and deferred retirement compensation under each system’s currently operating defined-benefit plan. Retirement compensation in both cities is back-loaded, which substantially increases the premium paid to highly experienced teachers. In late-career years, teachers often earn a larger compensation premium from the accrual of pension benefits than from salary. We show that cash-balance retirement plans, which are less back-loaded, would substantially reduce experience premiums without reducing the total compensation for the average entering teacher.http://sites.bu.edu/marcuswinters/files/2017/09/Pensions-and-Experience-Premium.pdfAccepted manuscrip

A Pivotal Moment: Assessing Houston's Plan for Pension Reform

The Laura and John Arnold Foundation (LJAF) released "A Pivotal Moment: Assessing Houston's Plan for Pension Reform," a report that provides an in-depth analysis of the City of Houston's pension reform proposal currently pending in the Texas Legislature. The report finds that the proposal includes important changes that would help protect workers and taxpayers. The reform plan was developed following discussions between Mayor Sylvester Turner and the Houston Police Officers' Pension System, the Houston Municipal Employees Pension System, and the Houston Firefighters' Relief and Retirement Fund.LJAF Vice President Josh McGee and LJAF Sustainable Public Finance Analyst Paulina S. Diaz Aguirre co-authored the report after analyzing the city's proposal and conducting independent pension modeling. They say that it is incumbent on local leaders and state legislators to work together. "There are just a few weeks left in the 2017 session—and without the ability to make changes to the pension systems on its own—the city is running out of time," the report states. "Without changes, the debt could spiral into a full-scale financial crisis. The city cannot allow that to happen. Its financial future hangs in the balance and will be decided in large part in the next month."Houston currently owes $8.2 billion in pension debt—more than any other city in Texas. It does not have enough money to pay for nearly half of the retirement benefits workers have already earned. This unfunded liability threatens workers' retirement security and has a direct impact on city finances. During the past 10 years, the city has cut public safety positions even as spending on public safety has grown by hundreds of millions of dollars due to a 55 percent increase in pension costs.The proposal seeks to address critical flaws in the city's funding practices. Under the proposal, the city would lower its assumed rate of return on investments for all plans from 8 percent or more to 7 percent; reduce benefits for public workers; and implement a financial corridor provision that would cap the city's contributions to the pension plans.The financial corridor provision is a key element of the proposal. The provision would set a minimum and maximum city contribution rate for each plan. If the city were to hit or surpass the maximum, workers would be required to make additional benefit concessions to bring costs back under the cap. LJAF's analysis shows that this mechanism would provide substantial new protections for taxpayers but would also significantly increase workers' exposure to risk.The report states that the proposal's long-term impact on workers would depend on demographic trends and the plans' investment performance, two factors that would influence how often the city would hit the cap. For example, LJAF's modeling shows that there is a two in five (40 percent) chance that the city's contribution rate would hit the maximum for the police fund at least once by 2027. If the police plan were to earn less than 7 percent on its investments in the short or long term, contribution rates would hit the cap even sooner.If investment returns match the city's assumptions, there is roughly a one in three (33 percent) chance that contribution rates for members of the police plan would increase by five percentage points or more in the next decade. Given that members of the police plan—as well as members of the other plans—have already agreed to billions of dollars in concessions, McGee and Diaz Aguirre explain that the city has an obligation to uphold its end of the bargain. They state that the city should make payments on time and in full and should take steps—such as limiting investments in risky assets including real estate, private equity, and hedge funds—to protect workers.In addition, if the proposal is implemented, the report states that the city should also make good on its promise to provide a lump-sum payment to the two plans with the largest deficits—the police and municipal employees plans. The city has proposed issuing$1 billion in pension obligation bonds to cover the payments. To benefit financially, Houston would need to earn more in the market than it costs to borrow the money. Given the current market conditions, the spread between expected bond interest rates and expected returns is relatively small. Despite the fact that the bonds pose some risk, the report argues that they are a good-faith measure that reflects the city's commitment to upholding funding promises.The report concludes that, "In the short term, the proposal would place the pension plans—and the city—on firmer financial footing. The long-term impact would depend on how the changes are implemented." It also states that Houston should make further changes to establish a comprehensive, permanent solution to its pension problems. This would include creating retirement systems for new workers that are simpler and easier to manage such as a Defined Contribution plan or a Cash Balance plan

Geertgen tot Sint Jans\u27s Night Nativity: A Study in Female Spirituality Practices

The Night Nativity by Geertgen tot Sint Jans depicts the birth of Christ in a manner that emphasizes the role of the Virgin as mother and Christ as the enlightener of the world. In this paper, I will argue that the Night Nativity was directed primarily toward meeting the devotional needs and interests of the nuns of the Convent of Our Lady of the Visitation near Haarlem. This convent is of particular interest because it is associated with the Windesheim Congregation of the Modern Devotion, which was a religious movement that privileged certain forms of lay spirituality. In particular, the adherents of the Modern Devotion seemed to have preferred various forms of affective devotion often associated with “women’s spirituality.” Geertgen’s image, I believe, appealed to the women in the convent because it focuses on the role of the Virgin and, in doing so, activated well-known tropes of female spirituality

Interlibrary Loan of Media Materials— The Tennessee Tech Volpe Library Experience: A Model for Change

The sending of media materials via interlibrary loan is a practice in the library world that is fraught with controversy. On the one hand, the American Library Association’s Guidelines for the Interlibrary Loan of Audiovisual Formats makes a clear case for sharing audiovisual material in all formats. The reality, on the other hand, is more in line with the statement posted by the University of Oregon Libraries on their Interlibrary Loan webpage. In some instances libraries have adopted halfway reciprocal measures. They will loan only to those institutions that will also lend to them, or who are members of a regional or consortial system. While resources are being shared somewhat under these policies, they are still not in compliance with ALA Guidelines. An examination of several randomly selected libraries in the southeastern region revealed policies that ranged from generous to restrictive

RELIGIOUS BELIEFS AND BEHAVIORS AS PREDICTORS OF SUBSTANCE USE IN FIRST-YEAR COLLEGE STUDENTS: A LONGITUDINAL STUDY

Substance use is prevalent on college campuses (e.g., Douglas et al., 1997) and can create significant negative consequences (Kodjo & Klein, 2002; NIAAA, 2006). Research suggests that religious beliefs and religious behaviors interact to predict risky substance use in first-year undergraduate students, such that students with religious beliefs but no corresponding behaviors are at risk for significant alcohol use and related problems (Brechting et al., 2010; Cole et al., 2020). However, these studies have only been cross-sectional in nature. The current study assessed longitudinally if the interaction of religious beliefs/behaviors influenced first-year undergraduate student substance use across the early adjustment period to college. Additionally, the study explored if perceptions of parental religiosity and/or general parental support variables influenced student substance use and religiosity, given the influence of parental variables on student behaviors (e.g., Ewing et al., 2015). Undergraduate participants (N=157) at the University of Kentucky completed surveys at two time points during their first fall semester. Results indicated that students with higher religious beliefs but lower religious behaviors were the student religious grouping most at risk for substance use (p’s\u3c .01- .05). A direction of effect analysis indicated that substance use behaviors predicted a decline in religious behaviors over time (p’s\u3c .01-.05). Moreover, direction of effect analyses indicated that religious behaviors of mothers negatively predicted student alcohol-related problems over time (p\u3c .01), while fathers’ religious beliefs positively predicted student religious behaviors over time (p\u3c .01). Future interventions should consider these outcomes for helping first-semester college students reduce their risky substance use