Illinois’ State Universities Retirement System shows the many reasons for increases in its unfunded liabilities.

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This graph released by the Illinois State Universities Retirement System (SURS) demonstrates a host of reasons that its unfunded liabilities have increased significantly since 1995.  Note especially that most of the underfunding is failure to pay the Actuarial Required Contributions (ARC) in green, like our legislature has failed to pay PERA .  Note also the relative unimportance of investment performance.  Assume they use some version of smoothing that would tamp this down but so does PERA. PERA would have a large component of actuarial changes for 2010 when they reduced our annual increases, changed the rate of investment assumption and went to a 100% funding target within 30 years. It would take lots of work to get the specific data from PERA needed to produce a similar graph for Colorado and then integrate it into a similar spreadsheet/graph.

Note: the Illinois Supreme Court has declared unconstitutional the Illinois Legislature’s retrospective reduction of benefits last year for all pre-2011 employees and retirees. The apparent difference was that Illinois has clear language in its constitution about not doing that! Read more at http://www.surs.com/news-article/052915/state-supreme-court-finds-pension-reform-law-unconstitutional

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24 Responses to Illinois’ State Universities Retirement System shows the many reasons for increases in its unfunded liabilities.

  1. Stan Brown says:

    Joshua Sharf made a recent appearance on The Devil’s Advocate show hosted by Jon Caldara of the Independence institute. Some interesting talking points including some reform suggestions of raising retirement age and switching over to a defined contribution plan.

    Joshua Sharf talks PERA reform

    • saveperacola says:

      This is an interesting “info-mercial” by two Independence Institute employees. PERA is one of the II’s smaller government initiatives which they promote. It was interesting that in the last two minutes Caldara basically affirms that promises to PERA retirees must be kept.

      • Stan Brown says:

        PENSION REFORM AND THE FAIRNESS ARGUMENT

        PERSUASION vs. INTIMIDATION – WHATEVER WORKS

        Persuasion … Sharf pointed out that DC plans offer an “asset”, whereas, with a DB plan you receive a “promise”. The point being what’s better, ownership of an asset or reliance on a promise that can be broken. Case in point: SB10-1

        Intimidation … Sharf also made a point that although states are sovereign and have no legal or constitutional mechanism to enter into bankruptcy protection, they can still “default” on debt. Kind of a circular argument – states are sovereign, so they can do what they want. In the case of Colorado, the state supreme court has demonstrated they will go along with the legislature. Indeed, during SB10-1 oral arguments one of the justices considered it inappropriate for the court to step into what he considered legislative prerogative.

        In regards to fairness and pension reform, if persuasion does not work, perhaps a dose of intimidation may do the trick. If the terms of a defined benefit for public employees is perceived as “unfair”, does it become morally acceptable to “default” on pension obligations, or ask the courts to redefine what’s contractual? Just some food for thought as we approach the 2016 political season.

  2. Richard Allen says:

    The State Auditor’s study of pension alternatives is out. You can download the study from their site. The study was done by GRS, a major actuarial firm. Not surprisingly, it echoes the assertions by PERA and its actuarial firm and the other actuarial firm that audits the first firm, that a PERA-like plan is the most efficient way to provide retirement income. I am not surprised because I never assumed that PERA and its actuaries were cooking the books to come up with the answer they desired. Others may have thought so but I didn’t. The problem, rather, lies in the actuarial way of looking at the world and the disconnect between that world view and reality. It is a complicated study and I will have more to say later but I wanted to offer some first impressions.
    GRS focuses on “new hires” only. This causes some difference between their perspective and that of us “old hires”. Given the scope of their study, I think they are correct to do so since that is the pool of eligible people for a new system. They also assume that there is no COLA for new hires based on provisions of SB1 that we did not focus on (perspective again). Thus they focus on retirement income at the point of retirement. They also focus on various types of defined benefit and defined contribution plans alone or in contribution but they do not note that PERA has in effect become a gratuity plan. They also focus on the “normal costs” of the various plans rather than the total costs (normal plus UAAL) on the grounds that the UAAL remains the responsibility of the employers if PERA is replaced. This is fair because the employer or its agent (PERA) cause the UAAL to exist via failure to pay the ADC, shortfalls in investment performance or other actuarial estimate errors. But it leads to several tricky things in the analysis.
    The assumption that the promised PERA benefits will actually be paid is a key issue. SB1 established the negative without a doubt, transforming PERA into a gratuity plan. In the case of the other options, the benefits (contributions) will be paid, defined benefits are backed up by Federal insurance or are so widely applicable (Social Security) that retroactive benefit cuts are very difficult. The partial elimination of the COLA is only one retroactive benefit cut that can be made. Since the study assumes no COLA, I will ignore the complete elimination of the COLA. However, claw backs of COLAs voluntarily granted, negative COLAs or elimination of ancillary benefits like PERACare or disability would be possible under SB1 legal theory. The assessment that the employer bears investment risks in PERA was proven false by SB1. The retirees ate the investment risk in that one. What will happen the next time there is a market meltdown or when the employers continue to fail to pay the ADC?
    Another key issue is the assignment of the UAAL to the employer in the analysis and its addition as a transitions cost to the normal costs of the alternative plans. While this is “fair” and in keeping with actuarial standards, it misses something too. These are not applied separately to PERA because PERA is assumed to be a perpetual entity and those costs are covered in future employer contributions. From a total compensation perspective though, employer costs are just funds that the employer doesn’t have to compensate employees, the same as if such UAAL costs are taken off the top in the state budget. The UAAL is what it is and must be eliminated. A better analysis would be to strip the UAAL payments out of PERA and talk about different financing schemes to deal with them. In effect, this is what PERA attempted with their bond proposal. There is no reason that something like that couldn’t be assumed for the other plans as well. And Social Security as a pay-as-you-go plan is essentially all unfunded liability. Some correction for this is necessary as well.
    The issue of COLAs needs to be better addressed as well. For the plans that include Social Security, the entire Social Security contribution is used. However, Social Security does have an actual uncapped COLA. Social Security funding structure makes it impossible to disaggregate the amount but it is there and needs to be dealt with in the comparison. One might for the purpose of the comparison, make some assumptions about the costs of the Social Security COLA or alternatively, add such COLA and associated costs to the non-Social Security plans. Otherwise you get the problems of apples and oranges that GRS went to so much other effort to avoid. A long-term retirement plan needs to deal with the possibility of a return to Nixon-Carter levels of inflation. Social Security does this. Other plans don’t.

    A fourth issue regards investment performance. GRS notes the commonly cited gap between the performance of big institutional investors like PERA and individual investors. Since most individual investors use a big institutional investor to manage their accounts, the gap is largely caused by asset allocation. In turn, the non-optimal asset allocation is caused by the common practice of letting individuals specify asset class. There is no reason to assume that one big institutional investor will perform differently than another big institutional investor in the long-run. In fact, you could let PERA manage the investments in a DC plan. This entire gap is simply a product of a set of assumptions that don’t have to be made that way. It is not like PERA members under the current plan have any choice as to investments. The other advantage that PERA has in this regard, is the ability to operate in a time horizon (infinite) that is not available to an individual due to the fact that we are all mortal. PERA could take the contributions, invest the money, and guarantee a long-term return (by explicit contract), like they do for the DC plan.

  3. Stan Brown says:

    SUMMER 2015 – BALLOON SEASON, INCLUDING POLITICAL TRIAL BALLOONS.

    Today, Joshua Sharf, Watchdog.org contributor and public pension skeptic, released a trial balloon which has added some more gist to his narrative on pension reform. Sharf uses reason rather than vitriol in making his argument, so I have coined the term “reasoned reform” to describe his approach to reform. His latest twist is that Colorado taxpayers are already more in debt, at least when comparisons are made by certain select measures, than most other states:

    “Even with sound long-term debt ratios, any additional debt might still burden the state more than expected. As reported earlier by Watchdog, Colorado ranks among the states devoting the highest percentage of its own tax revenue (not including federal transfers) to debt service. The Boston Fed ranked Colorado 6th in that category (p. 37) at the state level, and 4th in the country when local debt service is included.”

    Pensions Ailing Colorado’s Fiscal Health
    http://watchdog.org/228969/pensions-ailing-colorados-fiscal-health/

    However, what Sharf maintains his silence on the fact that the state has failed to make it’s full actuarial contributions into the trust fund for over 12 years. Also, for purposes of political expediency, the PERA Board of Trustees agreed to small, incremental multi-year increases of employer contributions which has also exacerbated the unfunded pension liabilities. Other states were much more aggressive in order to take advantage of recovering markets.

    I find the summer balloon fests in Albuquerque and Steamboat Springs much more enjoyable to watch than the political trial balloons released to a distracted public this time of year. I guess I’m an incurable politico.

  4. Stan Brown says:

    “Converting the current pension plan for teachers and state employees to a defined contribution system could cost up to $15.9 billion over four decades, according to a new study.”

    Study: Pension system shift could be costly in more ways than one
    http://co.chalkbeat.org/2015/07/13/study-pension-system-shift-could-be-costly-in-more-ways-than-one/#.VaSEoV9Viko

    Here’s the 211 page study recently posted on state auditor’s website:
    http://www.leg.state.co.us/OSA/coauditor1.nsf/All/10A3590D2063592E87257E70004B7FBD/$FILE/1409P+-+Colorado+Public+Employees'+Retirement+Association+(PERA)+Hybrid+Defined+Benefit+Plan+Study.pdf

    • Richard Allen says:

      The major fallacy in the chalkbeat article is that retirees have a right to the benefits. SB1 put paid to that.

  5. Mark Dunn says:

    I seem to see a lot of differences of opinion here, or truths which are not clearly stated. One must be clear and concise or the people who the discussion affects will tune out, too much info, and the info is filled with static. Do you as a stakeholder know who you elected in the Colorado Legislature. Write them for details. We had a friend who was a state senator and said that if she received more than three letters/emails/conversations on any issue it was a revolution brewing. This is a paticapatory democracy which relies on the electorate knowing.

    • saveperacola says:

      Of course there are differences of opinion. Some retirees were really worried that PERA Trust Fund was tanking and that benefits could not be paid throughout their lives without big pension reform changes. Some believed that a contract meant that once fully vested, their benefits could not be cut—the Colorado Supreme Court put an end to that thought. Some believed that the legislature had over promised benefits that it could not pay and did not sufficiently fund. Some believe that public employees worked for less than the private sector would have paid them but that the PERA pension benefit would make up for that over their lifetimes. Some believe that PERA leadership only tells the truth to members and the public, without any shading. Some believe that the taxpayers are “on the hook” for any PERA Trust Fund shortages and that they pay most of our “lavish benefits” in taxes. Some believe that the unions fairly represented their retired members in the lobbying for Senate Bill 10-001. Some believe that the reasons for the Trust Fund’s shortfalls are poor investment returns, or the investment assumption rate, or the chronic underfunding of promised benefits through the legislative process. Some think the lawsuit we filed was a fool’s errand and wasted the Trust Fund’s (i.e. members’) money. Some believe there was a very questionable decision issued by the supreme court that declared there is no contract for any annual benefit increases (ABI) or COLA and that its previous on point settled cases (Bill and McPhail) were conveniently ignored.

      The issues and beliefs about them are many, but at this point the only thing that really matters concerning ABI/COLA is that PERA can ask the legislature to eliminate the 2% that is left and that the supreme court has said that would be entirely within their power to do so. So, you are quite right that we live in a participatory government. If retirees are hoping that PERA and the legislature will take care of them in the future, they probably will but not perhaps to our liking unless we are the squeaky wheel this time. Contact your senator and representative and let them know who you are through regular contacts and even donations. But don’t assume they know the PERA issues. Many are too involved with other issues to understand ours. They listen to their party leadership mostly.

  6. Stan Brown says:

    2016 LEGISLATIVE SESSION – 3-RING PERA CIRCUS?

    The upcoming 2016 legislative session may result in some landmark changes or reforms to the PERA benefit, affecting both members and retirees. Indeed, a 3-ring circus has been spotted on the horizon and is coming our way …
    > pension bonding;
    > pension envy, primal cries coming out in editorials by the likes of Mike Rosen and Vince Carroll;
    > pension fairness doctrines being developed by Joshua Sharf and others.

    Pension bonding can work if done properly and with fiscal discipline … Wisconsin is an example of bonding success. But, bonding is a bad idea for states with no discipline in making actuarial or statutory contributions … Illinois and Colorado being examples.

    Bonding can only be successful if the government entity continues to make the required contributions until the pensions are at least 80% funded.

    PERA detractors may support bonding if it results in an immediate reduction in employer contributions. Their thought is that the PERA membership should take on the additional risk rather than the tax payers. The PERA Board of Trustees will support bonding only if employer contributions are locked in at agreed upon levels, which max out in 2017, in order to enforce fiscal discipline and to minimize risk to all parties.

    If the economy continues to improve, or at least stabilizes, the cries of pension envy will fall to deaf ears. But, if there is a sizable correction in the months ahead, expect more editorials by Rosen and others, such as former politicians and think-tank contributors (Mark Hillman, John Andrews) and conservative academicians (Professor Barry Poulson).

    However, I do believe some PERA detractors are taking a more reasoned approach to pension reform, such as espousing a fairness doctrine. Joshua Sharf of Watchdog Wire – Colorado appears to be a leading proponent of reasoned reform. Not only will they examine fairness as it pertains to retirement age, but also the benefit structure will come under scrutiny. Some say the pension benefit earned per length of employment is not linear and therefore not fair. One outcome of this strategy is to create a divide within the active PERA membership … similar to the divide created by SB10-1 between active and retired members … as evidenced by the active (and passive) support of SB10-1 by employee groups such as Secure PERA and Colorado WINS. If the economy stays positive going forward into 2016, the fairness doctrine will definitely gain more credibility, especially over primal cries of envy.

    Parlays on Pension Bonds Might Bust Taxpayers – bankers are urging governments to borrow-and-bet away their pension problems.
    http://www.pressreader.com/usa/the-washington-post-sunday/20150712/282978218676817/TextView

    Rosen: The lies behind those PERA bucks
    http://www.denverpost.com/opinion/ci_28464507/lies-behind-those-pera-bucks

    Sharf: Fairness in retirement age can help save Colorado’s PERA
    http://www.greeleytribune.com/news/11507723-113/retirement-pera-age-security

    • saveperacola says:

      Stan wrote: “One outcome of this strategy is to create a divide within the active PERA membership … similar to the divide created by SB10-1 between active and retired members … as evidenced by the active (and passive) support of SB10-1 by employee groups such as Secure PERA and Colorado WINS.” Note that Secure PERA is funded indirectly by PERA through its retained law firm. (The PERA Ambassadors program is another of these pseudo-employee groups organized, trained and funded by PERA to do PERA’s bidding.) To think of these as “employee groups” is a bit of a stretch. WINS, Colorado Education Association, etc. as employee groups were co-opted early on in the SB-1 lobby onslaught to support their active members’ interests and not the retirees’.

    • Mark Dunn says:

      I particularly thank you for the press links, none of which I would have found. Also thank you for making me aware of Colorado Coalition For Retirement Security, which I will check out further today. Some lightweight observations from me. I started teaching in 1967, handy coincidence since that is when government started tracking inflation. I made $100 a week. multiply by inflation and you will find that beginning teachers make very close to the same today. In my first year class size was 18, the year I finished it was as many as the Fire Marshall would allow in a classroom, which usually ran in the high 30s to low 40s. Beyond the scheduled experience and degree raises, every raise i ever received basically came from increased class size.

      When I “retired” approximately twenty years ago it was the class size which did it as my elective enrollment kept rising like a tsunami. There is also the point that at thirty years, PERA I suspect in collusion with school districts dropped the percentage increase in retirement payouts from 3 to 1% for years of service over 30. It was very clear I was expensive to have around and school districts everywhere wanted to get rid of teachers high on the pay scale. An acquaintance at Metro had the option of going half time once he had thirty years in. I would have done that, but PERA didn’t make it worth the time and trouble.

      We moved to a different country, and are still there as on the 55% HAS we couldn’t continue to live in CO, probably because my wife never worked outside the home, instead making a home, founding a library where we lived, did two terms on the school board, etc. I have thought that the end all in American Culture if it exists is how little one can pay in taxes and the shell game around PERA is just another example of that. Again, thank you for your detailed observations. I hope my practical observations have added to the conversation.

  7. Stan Brown says:

    Colorado PERA continues to under perform the majority of public pension funds. The index that PERA uses to evaluate its performance … BNY Mellon … is self-serving, as BNY Mellon provides investment management and customized services in a variety of industry sectors including sovereign institutions such as states and nation. PERA’s 2014 return was 5.7% compared to BNY Mellon’s 6.2% and Bloomberg’s 6.8%. I assume BNY Mellon return was based on its own clients, whereas the Bloomberg return is based on a more comprehensive grouping of public pensions.

    PERA’s use of alternative investments have been dragging down its returns in recent years. Perhaps it’s time for PERA to re-think its use of alternatives.

    U.S. Public Pensions Return 6.8% in 2014 for Six Years of Gains

    http://www.bloomberg.com/news/articles/2015-02-09/u-s-public-pensions-return-6-8-in-2014-for-six-years-of-gains

    “While the Standard & Poor’s 500 Index of U.S. stocks returned 13.7 percent (2014), public pensions were dragged down by international investments. Stagnation in Europe and a strong dollar led to losses of almost 4 percent on foreign stocks, according to Wilshire.”

    https://www.bnymellon.com/us/en/what-we-do/solutions/who-we-serve.jsp#!filter/sovereign-institutions

    • Richard Allen says:

      They don’t need to worry about investment performance now. If it lags, they can just cut pensions again.

  8. Richard Allen says:

    I have now read the Arnold Foundation report that Stan Brown links above. It is most interesting. I am gratified that they did the leg work to tease out of the PERA financial reports the cause of the shortfall in finances for PERA. Pretty much confirms we and Algernon Moncrief have been saying all along. Which is that little of the shortfall can be attributed to investment shortfall and much to the persistent underfunding of the system contributions (i.e. failure to meet the ARC). The last time the ARC was met was in 2002. So for 13 years now PERA has acquiesced to this violation of actuarial responsibility. Those of you who saw the legislative juggernaut they put together to cut our benefits will be excused from wondering why they couldn’t have done the same to achieve sound funding levels.

    Much of the report is about investment risk. I have no particular expertise in this field so I am not going to comment except to say that someone other than PERA needs to worry about it. In testimony on SB1 we argued that the legislature needed to develop its own expertise on pension issues rather than relying on PERA to be an honest broker.

    Of course, the Arnold Foundation has an agenda (which is not front and center in this report) to replace DB plans with DC plans. What they and most people in Colorado don’t get is that Colorado no longer has a DB plan but has a gratuity plan where benefits are at the whim of the state. PERA and the Supreme Court did that with SB1 and the court decision but have not acknowledged it. But with the underfunding, benefits will be cut again the next time there is a market turndown.

    The other failing of the report is in terms of scope. The Arnold Foundation is primarily interested in education so focuses mainly on the School Division. That is fine but they mostly ignore the other school division-DPS. While DPS is in better overall shape than the school division, the ARC funding is significantly less. It is even worse now because of the reduction of the contribution rate which happened subsequent to the writing of this report.

  9. Stan Brown says:

    Interesting publication sponsored by the Arnold Foundation released this month:

    Risky Retirement: Colorado’s Uncertain Future and Opportunities for Reform

    http://coloradopensionproject.com/wp-content/uploads/2015/06/Risky-Retirement_June-2015.pdf

    Here’s an interesting footnote found on page 6:

    “Colorado’s accrual of pension debt stems from its failure to responsibly pay for its retirement obligations. In 2013, the state owed $1.4 billion to cover pension costs; yet, public employers only contributed 79 percent of this figure, falling short by more than $300 million. The failure of Colorado’s public employers to fully pay what they owe is not a new problem. In fact, it has been a trend in the state over the past decade. As shown in Figure 2, in every year since 2003, Colorado’s contributions have been significantly less than the Annual Required Contribution (ARC), or the annual payment needed to cover both the current and legacy costs of retirement benefits. It is important to note that employer payments build PERA’s assets. Therefore, inadequate payments have contributed to the divergence of retirement liabilities and plan assets. This gap between PERA’s assets and its liabilities represents the state’s pension debt, or unfunded liability, and it has increased dramatically since 2001 (Figure 3).”

    • Richard Allen says:

      They have a Colorado version of the chart that started this thread. I will upload here when I have read the entire report. Interesting that the portion of unfunded liability caused by failure to pay the ARC is 81%, neatly offset by plan changes of -72%. These plan changes are mostly SB1.

      • Stan Brown says:

        Too bad Governor Bill Owens vetoed Senate Bill 101 in 2003: “Concerning Stabilization of Employer Contributions to the Public Employees’ Retirement Association”. The unfunded liability of PERA would have been properly managed on an ongoing basis.

    • Mark Dunn says:

      I would suppose there is no way to force the legislature to enforce public entities to contribute their share of what is needed to keep PERA solvant in the long view?

  10. Stan Brown says:

    State pension lawsuits are finally finding resolution in state supreme courts, with mixed results. Some supreme courts are protecting public retiree pensions from retroactive claw back (Illinois, Oregon), while others are rendering decisions which support the retroactive reduction of benefits (Colorado, New Jersey).

    The New Jersey Supreme Court stated that the courts cannot compel the state to adequately fund the pensions of public employees … saying, in essence, that it is the perquisite or responsibility of “the people” through their elected officials. In the case of New Jersey, the buck stops at the desks of the legislators and governor. However, the Colorado legislature has lost its taxing authority due to TABOR, so unfunded pension obligations will continue to be a major problem … unless, of course, Colorado voters decide to boost contributions and or agree to bonding. Chances of this happening are slim to none. In Colorado, taxing authority rests with “the people” rather than with their representatives in the legislature.

    Although New Jersey courts recognize the contractual nature of vested public pensions, they have decided that adequate funding is not contractual and is subject to public sentiment and legislative whim.

    New Jersey Supreme Court Hands Christie Victory In Fight Over The State’s Pension Mess

    http://thinkprogress.org/election/2015/06/09/3667592/breaking-new-jersey-supreme-court-hands-christie-victory-fight-states-pension-mess/

    “New Jersey’s highest court on Tuesday ruled that Gov. Chris Christie’s (R) administration is not on the hook for $1.57 billion in pension payments that a lower court previously said were owed.”

    “This is not an occasion for us to act on the other branches’ behalf,” the court said, adding that it is the people’s responsibility to hold the elective branches of government responsible for their exercise of powers..”

  11. Mark Dunn says:

    I am confused. As a teacher the school district and myself paid into PERA for my pension. Are you saying that for state employees, the state is not paying their share into state employee’s PERA accounts? I would sincerely appreciate some clarity on this.

    • saveperacola says:

      Good question! The legislature sets into law the benefits structure by which your retirement benefit will be paid. For most of us it’s 2.5% times years of service credit times highest average salary. It also mandates that you pay a percent of your annual salary (currently 8% for most divisions) into PERA, and that your employer pay a matching amount that may or may not be greater than 8%. It varies widely by division. PERA invests all these contributions and over time earns additional monies for the trust fund. PERA reports annually to the legislature how much more it needs to achieve full funding (100%) of the trust fund–again over time and using the annual assumed investment rate of return. It is this number, the actuarial required contribution (ARC) for full funding that the legislature has historically been underfunding the past 15 years. The state division as well as all other divisions of PERA have been underfunded in varying amounts over the years. Employers have ALL been paying the statutory amounts required by the PERA law at the time. What has happened is that the PERA law has NOT required employers (or employees) to pay enough to fully fund the promises (i.e.contracts) that the benefits structure makes for and with every employee. While there are many scapegoats for this, such as selling service credit at low prices, poor investment returns in some years, the 401k matching program a decade ago, the fact remains that ultimately the State of Colorado, through PERA, is required to pay the benefits it has promised employees and which they have already earned through their work. In 2009, PERA decided to erase a large portion of those future liabilities which had been amassed. At the legislature’s direction, PERA commissioned a study that was directed to achieve full funding of the PERA Trust Fund within 30 years. They did so, presented it to the legislature and the leadership ran with it to produce Senate Bill 10-001. It was passed and signed into law February 26, 2010 in record time. It reduced the benefits structure for some current and all future PERA covered employees and reduced the promised annual benefits increase (ABI), better known as the 3.5% COLA for everyone, even those already retired. We sued and lost in the Colorado Supreme Court 5-0, which declared that there is no contract for the ABI. The Illinois decision went the other way.

      A simple analogy: Your parents resolutely promise you a $1 per week allowance when you turn age 12 until you leave home. From age 5, each week you must earn and put 8 cents into the “future allowance jar” while they put 18 cents into it. Your many siblings do the same using the same jar. Your parents invest the money and earn interest which also goes into the jar. At age 12 your parents start paying you $1 per week. Questions: Will this formula of 8 cents and 18 cents paid in over seven years be enough to pay all the allowances of all the kids while they live at home? Or will the allowance jar run out of money first? Since your parents required you to participate in the allowance scheme they designed and prevented you from saving in another plan (Social Security), are they not also required to fund the allowance scheme adequately to ensure paying every kid their allowance? That last part would be the “Actuarially Required Contribution” or ARC, which Colorado has NOT been mandating its employers pay for 15 years.

      • Mark Dunn says:

        So this underpayment is a result of districts, counties, etc. whining about not being able to afford their share and the Legislature caves in by lowering their percentage contribution? Thank you for helping me put this into a context I already realized. Kick the can down the road, then exclaim “How did we ever get here?”

  12. Michele Page says:

    Thank you for keeping us updated.

    Michele Page

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