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5 Points about new PRB Chair from Association of Public Employee Retirement Systems

  • February 14, 2016

  • Remember that the state’s Defined benefit pension funds are better than the average 401(k)
  • Remember that 401Ks take bigger risks to prevent the fear of under performing
  • It’s the private sector retirement benefit that need review, not the government pensions
  • The PRB should continue to use amortization periods as the yard stick to measure financial strength
  • The last 5 years of the 83 pensions under the PRB review have yielded the strongest performance

Statesman | Patterson: Texas public employee pensions remain healthy

5 Lessons from the U.S. Must Underfunded Pension

  • January 28, 2016

Kentucky, home to horses, is also home to the U.S.’s most underfunded pension. 

What has hampered the Kentucky Pension? Low investment returns, low contributions rates, the need to cash out investments & move investments to low risk, low reward bonds

What are the unfunded liabilities for Kentucky? $10 billion 

What has the Legislature done? IN 2013 reforms included:

  • creating a hybrid cash plan for new employees (pretty much a defind benefit plan with less risk for the state)
  • eliminating COLAs (cost of living adjustments)
  • required to the state to make its full actuarial payments immediately (which it hadn’t since 1990s)

Did that help? No. After the reforms, the plan suffered by:

  • losing 1/3 of its assets
  • only has 19% of the assets it needs to cover 30 years

Were there surprised post-pension reform legislation? Yes, how quickly the fund lost value

Governing | Kentucky’s Cautionary Tale About Underfunding Pensions

 

 

 

AG Opinion: Fantasy Sports Illegal Gaming. 4 Points to Know Now.

  • January 19, 2016

On Tuesday, 1.19.16, Attorney General issues opinion KP-0057 finding fantasy sports illegal gaming in Texas because it violates both the constitution and state statutes by:

  • Involving betting. Fantasy sports includes a bet, the fee fantasy sports participants pay
  • Being a game of chance. Those wagering have no control over how players perform.
  • There is a previous AG Opinion that Guides. LO-94-051 requires that to fall into the statutory exception to be a legal bet, there must be direct participation in the betting activity.
  • Your office pool is ok. As long as the house doesn’t retain funds, you’re A-OK.

 

 

One County Racks up $358M In Unpaid Tolls

  • January 10, 2016

Which Texas County has $358M in unpaid tolls? Harris

How much does $358M in unpaid tolls equal in toll lane miles? About the same as the cost of 15 miles of the Grand Avenue Parkway

How do these unpaid tolls break down by driver numbers?

  • 84,673 vehicle owe more than $1,000
  • 27 drivers who owe more than $20,000 each
  • One person owes $46,000

Express News | Harris County racks up $358M in unpaid tolls

3 Reasons 1 City Said NO to New Solar

  • January 3, 2016

Woodland in Northampton County, North Carolina, voted in a moratorium on new solar.

3 Reasons why:

  • aesthetics. solar farms are not pretty.
  • property values. neighboring proeprty owners believe solar farms lower their property values.
  • harm to agriculture. A crop science professor at NC State explains that solar farms  “may well be one of the most important agricultural issues of our generation.”

 

Governing | A Small Town’s Solar Ban Heard Around the World

New Kid on the Block: Oil Data Group Opens Houston Office

  • January 3, 2016

Austin-based DrillingInfo, an oil and gas exploration and production data and analytics company has opened a new office in downtown Houston.

Houston Business Journal | Exclusive: Oil and gas data company opens new Houston office

A Win for Pensions Over 401Ks Thanks to Intellectuals who Comb through Data

  • December 18, 2015

Boston College Center for Retirement Research released a report this week that showed higher returns on investments for pensions than 401Ks.

Two highlights:

  • “defined benefit plans outperformed 401(k)s by an average of 0.7 percent per year, even after controlling for plan size and asset allocation”
  • Most 401Ks rolled into IRAs which have even lower returns on investment

Governing | Tradition Wins in Retirement

 

Lege Trend: State Budget to Boost Data Security

  • December 4, 2015

Where? Virgina

What budget provisions are boosting data security? Governor McAuliffe says the state’s budget will include education investments for cybersecurity, including:

  • scholarships for students who agree to serve two years of public service in the cybersecurity workforce after graduation
  • increased cybersecurity training in high school including:
    • new virtual, secure platform to enhance student cyber skills
    • providing training on cyberattack detection and defense
    • developing cyber certifications
    • encouraging student collaboration within the industry, to conduct research
    • offering training for active duty military and veterans.
  • higher education fudning for institutions that meet national standards for cybersecurity training

Why the state focus on cybersecurity? “Cybersecurity education is a key component to building the new Virginia economy.”

NBC 29 WVIR| Gov. McAuliffe Says Budget Would Boost Cybersecurity Industry

Interim: 5 Points to Know: Pensions. Private Equity Firms. Transparency in Fees.

  • November 24, 2015

  • Pension systems have failed to disclose, or ask, how much private equity firms keep in performance fees
  • When performance fees paid by pensions is revealed, the rulemaking/agency protocol/legislative solutions are 3 fold:
    • tougher scrutiny of private-equity investments
    • cut back a pension’s private equity holdings
    • negotiate lower fees
  • Examples of performance fees paid around the country by state pension systems:
    • CALPERS Billions over 17 years above what was disclosed
    • New Mexico $6.3 million in performance fees
    • South Carolina $35.3million in performance fees
    • Kentucky $34.1 million
    • New Jersey $91.3 Million in performance fees
  • Pension funds avoid disclosing performance fees because:
    • accounting rules didn’t require public reporting
    • returns were high enough to mitigate any cost concerns
  • The issue of performance fees paid came to light nationwide after an activist blog publicly asked a CALPERS official for the amount the pension system paid to private equity firms
    • When CALPERS investigated, it was determined that the private equity firms did not know th e answer.

Hello to House Pension Committee Interim Charge #5

Wall Street Journal | Pensions’ Private-Equity Mystery: The Full Cost

Texas is #10 Most Competitive Business State. 3 Points to Know.

  • November 18, 2015

  • The Top 10 States:
    • 1. Wyoming
    • 2. South Dakota
    • 3. Alaska
    • 4. Florida
    • 5. Nevada
    • 6. Montana
    • 7. New Hampshire
    • 8. Indiana
    • 9. Utah
    • 10. Texas 
  • The break down for all of Texas businesses tax rankings for 2016
    • #41 corporate tax rank
    • #6 individual income tax rank
    • #37 sales tax rank
    • #15 unemployment insurance tax rank
    • #34 property tax rank
  • Why is Texas #6 on individual income tax rank? Because Texas applies the gross receipts taxes to limited liability corporations (LLCs) and S corporations 

Tax Foundation | 2016 State Business Tax Climate Index 

5 Points about new PRB Chair from Association of Public Employee Retirement Systems

  • February 14, 2016

  • Remember that the state’s Defined benefit pension funds are better than the average 401(k)
  • Remember that 401Ks take bigger risks to prevent the fear of under performing
  • It’s the private sector retirement benefit that need review, not the government pensions
  • The PRB should continue to use amortization periods as the yard stick to measure financial strength
  • The last 5 years of the 83 pensions under the PRB review have yielded the strongest performance

Statesman | Patterson: Texas public employee pensions remain healthy

5 Lessons from the U.S. Must Underfunded Pension

  • January 28, 2016

Kentucky, home to horses, is also home to the U.S.’s most underfunded pension. 

What has hampered the Kentucky Pension? Low investment returns, low contributions rates, the need to cash out investments & move investments to low risk, low reward bonds

What are the unfunded liabilities for Kentucky? $10 billion 

What has the Legislature done? IN 2013 reforms included:

  • creating a hybrid cash plan for new employees (pretty much a defind benefit plan with less risk for the state)
  • eliminating COLAs (cost of living adjustments)
  • required to the state to make its full actuarial payments immediately (which it hadn’t since 1990s)

Did that help? No. After the reforms, the plan suffered by:

  • losing 1/3 of its assets
  • only has 19% of the assets it needs to cover 30 years

Were there surprised post-pension reform legislation? Yes, how quickly the fund lost value

Governing | Kentucky’s Cautionary Tale About Underfunding Pensions

 

 

 

AG Opinion: Fantasy Sports Illegal Gaming. 4 Points to Know Now.

  • January 19, 2016

On Tuesday, 1.19.16, Attorney General issues opinion KP-0057 finding fantasy sports illegal gaming in Texas because it violates both the constitution and state statutes by:

  • Involving betting. Fantasy sports includes a bet, the fee fantasy sports participants pay
  • Being a game of chance. Those wagering have no control over how players perform.
  • There is a previous AG Opinion that Guides. LO-94-051 requires that to fall into the statutory exception to be a legal bet, there must be direct participation in the betting activity.
  • Your office pool is ok. As long as the house doesn’t retain funds, you’re A-OK.

 

 

One County Racks up $358M In Unpaid Tolls

  • January 10, 2016

Which Texas County has $358M in unpaid tolls? Harris

How much does $358M in unpaid tolls equal in toll lane miles? About the same as the cost of 15 miles of the Grand Avenue Parkway

How do these unpaid tolls break down by driver numbers?

  • 84,673 vehicle owe more than $1,000
  • 27 drivers who owe more than $20,000 each
  • One person owes $46,000

Express News | Harris County racks up $358M in unpaid tolls

3 Reasons 1 City Said NO to New Solar

  • January 3, 2016

Woodland in Northampton County, North Carolina, voted in a moratorium on new solar.

3 Reasons why:

  • aesthetics. solar farms are not pretty.
  • property values. neighboring proeprty owners believe solar farms lower their property values.
  • harm to agriculture. A crop science professor at NC State explains that solar farms  “may well be one of the most important agricultural issues of our generation.”

 

Governing | A Small Town’s Solar Ban Heard Around the World

New Kid on the Block: Oil Data Group Opens Houston Office

  • January 3, 2016

Austin-based DrillingInfo, an oil and gas exploration and production data and analytics company has opened a new office in downtown Houston.

Houston Business Journal | Exclusive: Oil and gas data company opens new Houston office

A Win for Pensions Over 401Ks Thanks to Intellectuals who Comb through Data

  • December 18, 2015

Boston College Center for Retirement Research released a report this week that showed higher returns on investments for pensions than 401Ks.

Two highlights:

  • “defined benefit plans outperformed 401(k)s by an average of 0.7 percent per year, even after controlling for plan size and asset allocation”
  • Most 401Ks rolled into IRAs which have even lower returns on investment

Governing | Tradition Wins in Retirement

 

Lege Trend: State Budget to Boost Data Security

  • December 4, 2015

Where? Virgina

What budget provisions are boosting data security? Governor McAuliffe says the state’s budget will include education investments for cybersecurity, including:

  • scholarships for students who agree to serve two years of public service in the cybersecurity workforce after graduation
  • increased cybersecurity training in high school including:
    • new virtual, secure platform to enhance student cyber skills
    • providing training on cyberattack detection and defense
    • developing cyber certifications
    • encouraging student collaboration within the industry, to conduct research
    • offering training for active duty military and veterans.
  • higher education fudning for institutions that meet national standards for cybersecurity training

Why the state focus on cybersecurity? “Cybersecurity education is a key component to building the new Virginia economy.”

NBC 29 WVIR| Gov. McAuliffe Says Budget Would Boost Cybersecurity Industry

Interim: 5 Points to Know: Pensions. Private Equity Firms. Transparency in Fees.

  • November 24, 2015

  • Pension systems have failed to disclose, or ask, how much private equity firms keep in performance fees
  • When performance fees paid by pensions is revealed, the rulemaking/agency protocol/legislative solutions are 3 fold:
    • tougher scrutiny of private-equity investments
    • cut back a pension’s private equity holdings
    • negotiate lower fees
  • Examples of performance fees paid around the country by state pension systems:
    • CALPERS Billions over 17 years above what was disclosed
    • New Mexico $6.3 million in performance fees
    • South Carolina $35.3million in performance fees
    • Kentucky $34.1 million
    • New Jersey $91.3 Million in performance fees
  • Pension funds avoid disclosing performance fees because:
    • accounting rules didn’t require public reporting
    • returns were high enough to mitigate any cost concerns
  • The issue of performance fees paid came to light nationwide after an activist blog publicly asked a CALPERS official for the amount the pension system paid to private equity firms
    • When CALPERS investigated, it was determined that the private equity firms did not know th e answer.

Hello to House Pension Committee Interim Charge #5

Wall Street Journal | Pensions’ Private-Equity Mystery: The Full Cost

Texas is #10 Most Competitive Business State. 3 Points to Know.

  • November 18, 2015

  • The Top 10 States:
    • 1. Wyoming
    • 2. South Dakota
    • 3. Alaska
    • 4. Florida
    • 5. Nevada
    • 6. Montana
    • 7. New Hampshire
    • 8. Indiana
    • 9. Utah
    • 10. Texas 
  • The break down for all of Texas businesses tax rankings for 2016
    • #41 corporate tax rank
    • #6 individual income tax rank
    • #37 sales tax rank
    • #15 unemployment insurance tax rank
    • #34 property tax rank
  • Why is Texas #6 on individual income tax rank? Because Texas applies the gross receipts taxes to limited liability corporations (LLCs) and S corporations 

Tax Foundation | 2016 State Business Tax Climate Index