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From YouTube: Pension Plan Design Trends Across the 50 States
Description
Join us for an overview of the latest on market impacts to public pension fund investments, new research on
A
A
A
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A
Our
final
briefing
is
scheduled
for
next
wednesday
at
the
same
time,
and
it
features
a
state
budget
and
tax
update,
so
we'll
go
ahead
and
post
the
link
to
the
entire
schedule
in
the
chat
you
can
check
those
out.
I
also
want
to
take
a
moment
to
acknowledge
the
pew
charitable
trust
for
their
support
of
the
fiscal
series
and
for
their
ongoing
partnership
with
ncsl
on
state
policy
issues,
including
today's
topic
of
state
pensions
and
then
just
a
couple
final
notes
from
me
one.
A
As
I
mentioned
earlier,
we
are
recording
these
sessions,
so
this
will
be
recording
available
on
our
website
early
next
week
and
two
this
is
meant
to
be
interactive,
so
feel
free
to
ask
questions.
You
can
either
post
them
in
the
chat
or
you
can
raise
your
hand
if
you
want
to
ask
directly
and
then
we'll
also
have
time
for
questions
during
the
program,
and
so
with
that,
I'm
going
to
turn
the
zoom
over
to
my
colleague
anna
petrini,
who
will
lay
out
our
agenda
and
kick
us
off
today.
C
C
C
We're
also
very
happy
to
welcome
alina
obrether,
who
currently
oversees
the
pew
team's
50-state
research,
around
plan
design
and
retirement
security.
She
has
more
than
a
decade
of
experience
working
on
state
policy
issues.
I'd
also
like
to
welcome
elizabeth
wiley.
She
is
a
consulting
actuary
at
chiron
with
16
years
of
experience
working
with
public
pension
plans
as
chiron's
public
pension
coordinator.
She
manages
the
firm's
relationships
with
trade
associations,
research
organizations,
professional
bodies
and
government
entities,
and
she
holds
positions
at
several
actuarial
professional
associations
as
well.
C
We
are
delighted
to
hear
from
state
representative
ed
massey,
who
was
recently
elected
to
serve
the
66th
house
district
in
boone
county
kentucky
he
currently
serves
as
chair
of
the
judiciary,
committee
and
representative
massey
is
also
a
practicing
partner
in
the
law.
Firm
blankenship
massey
and
associates
he
was
a
member
of
the
boone
county
board
of
education
for
over
21
years
and
he
has
served
as
president
of
the
kentucky
school
boards
association
and
the
national
school
boards
association
as
well.
A
C
To
being
named
executive
director
of
the
new
jersey
senate
majority
office,
he
served
as
chief
of
staff
to
senate
president
steve
sweeney.
Kevin
has
extensive
experience
in
economic
policy
and
business.
He
was
a
regional
director
of
governmental
affairs
for
cable
vision
systems
corporation
and
prior
to
that
he
served
as
executive
director
of
the
new
jersey,
commerce,
commission.
C
D
D
She'll
also
be
touching
on
some
of
the
defining
and
measuring,
defining
and
measuring
the
success
for
public
pension
systems.
That
anna
mentioned
just
a
brief
moment
ago,
and
then
we'll
hear
from
elizabeth
wiley,
who
will
take
a
deeper
dive
into
the
hybrid
plan,
design
that
many
states
are
beginning
to
employ
to
build
resiliency
against
market
market
fluctuations
and
then,
finally,
we'll
we'll
all
be
participating
in
a
conversation
with
kevin,
dredden
and
representative
massey
on,
what's
going
on
specifically
in
their
states.
So
very
much
looking
forward
to
that.
D
So
a
lot
of
volatility
and
a
lot
of
good
news
for
fund
balance
sheets.
But
we
are
anticipating.
You
know
continued
volatility,
perhaps
not
this
dramatic,
but
the
market
is
inherently
volatile
and
we're
also
keeping
an
eye
on
an
uncertain
economic
situation
which
may
be
cause
for
concern
so
right
here
we
we
we've
illustrated
of
three
different
cbo
forecasts.
C
D
D
So,
as
I
said,
very
volatile-
and
we
expect
perhaps
not
this
level
of
volatility
going
forward.
Hopefully
this
is
kind
of
a
once
in
a
generation
run
up
that
we
see
since
the
end
of
march,
but
we
anticipate
volatility
and,
of
course,
continued
economic
uncertainty
as
we
as
we
recover
from
the
from
the
pandemic
itself.
D
D
It's
now
forecasted
to
be
less
than
four
percent
going
forward.
Core
bond
yields
two
and
a
half
percent,
which
is
pretty
significantly
lower
than
what
we
were
anticipating
before
the
pandemic,
and
total
pension
plan
returns.
Given
a
typical
portfolio
asset
allocation
are
now
forecasted
at
six
percent.
Instead
of
six
point
four
percent
that
we
were
forecasting
before
the
pandemic
hit.
E
E
Variable
db
plans
are
when
a
traditional
pension
plan
incorporates
a
risk
sharing
feature
typically
either
a
cola
or
employee
contribution
that
varies
based
on
investment
returns
or
plan
funding
level
and
then
finally,
a
side-by-side
hybrid
plan
combines
a
typically
a
smaller
pension,
with
an
individual
savings
account
and
our
next
panelist
elizabeth
wiley
will
discuss
hybrid
plans
in
more
detail
and
next
slide
slide.
Please.
E
E
The
cola
in
particular
stands
out
as
a
powerful
mechanism
for
reducing
employer
risk,
while
minimizing
the
impact
on
workers
and
retirees
so
for
fully
funded
to
close
to
fully
funded
plans.
Tying
the
variable
cola
to
funding
level
can
work
well,
for
example.
This
is
the
basis
for
south
dakota's
variable,
however,
for
plans
that
are
less
well-funded,
the
best
strategy
is
typically
to
tie
the
variable
cola
to
investment
returns,
typically
smoothed
over
a
set
number
of
years.
E
E
So,
of
course,
much
of
this
stable
cost
is
due
to
states
consistently
making
their
full
contributions
across
the
business
cycle,
but
we
have
also
found
that
risk
sharing
features
make
a
big
play,
a
big
role
in
keeping
these
costs
stable
next
slide,
please
so
to
measure
cost
predictability
going
forward.
We
use
a
different
metric,
normal
cost
sensitivity,
so
normal
cost
sensitivity
measures.
The
expected
volatility
of
employer
costs
for
future
benefits
shown
as
a
percent
percent
of
payroll
under
a
low
return
scenario.
E
So,
as
you
can
see
in
this
slide,
the
three
states
at
the
bottom,
south
dakota,
wisconsin
and
tennessee-
see
zero
or
small
changes
in
their
employer
costs.
So
the
little
black
bars
represent
the
cost
under
the
expected
return,
and
then
the
yellow
bars
represent
the
range
of
costs
under
a
low
return
scenario,
which
we
use.
A
five
percent
return,
so
wisconsin,
south
dakota
and
tennessee
are
either
totally
stable
or
have
a
relatively
small
range,
where
the
three
states
at
the
top
new
york,
washington
and
north
carolina
show
much
more
volatility
under
a
low
return
scenario.
E
E
Next
slide,
please
replacement
income
helps
capture
how
well
career
workers
are
set
up
for
retirement,
finding
that
in
most
cases,
workers
with
a
long
tenure
can
expect
their
retirement
benefit
will
match
their
final
take-home
day.
Okay,
so
this
graphic
walks,
through
our
several
step
process
for
calculating
retirement
income
using
a
sample
db
plan
and
and
finds
a
full
replacement
rate
for
the
typical
career
worker
once
we've
adjusted
for
inflation,
included
social
security
and
adjusted
for
take-home
pay
next
slide.
Please.
E
E
So
on
this
graph,
the
blue
bar
shows
the
level
of
employee
contributions
that
workers
have
access
to
x,
separation
and
the
orange
bar
shows
the
level
of
employer
contributions
they
have
access
to.
So,
as
you
can
see,
nearly
all
of
the
high
performing
states
provide
access
to
both
employee
and
employer
contributions
at
separation-
and
I
know
it's
hard
to
see,
but
our
three
kind
of
example
states
are
are
both
have
some
of
the
highest
savings
rates.
Wisconsin,
tennessee
and
south
dakota
are
all
clustered
on
one
side.
E
However,
we
find
that
when
traditional
defined
benefit
plans
offer
workers
assets
access
to
employer
contributions,
the
workers
are
much
more
likely
to
have
a
sufficient
savings
rate
next
slide,
please,
finally,
I'll
touch
on
a
few
takeaways.
So,
as
susan
discussed,
the
kobe
19
pandemic
exposed
already
underfunded,
state
pension
plans
to
investment
volatility,
and
despite
recent
strong
and
best
strong
market
performance,
the
long
term
forecasts
suggest
lower
market
returns
and
a
high
degree
of
uncertainty
going
forward.
E
The
the
handful
of
high
performing
states
that
we
touch
on
have
demonstrated
that
public
employees
can
be
provided
a
secure
retirement
in
an
affordable
and
sustainable
manner.
And
finally,
while
there
is
no
one-size-fits-all
risk
sharing
features,
specifically
a
variable
cola,
combined
with
variable
employee
contributions,
can
help
systems
meet
objectives
around
stable
costs
and
retirement
security.
B
Frequently
hybrid
plans
are
mentioned
as
if
they
represent
a
single
concept,
but
the
plans
that
are
hybrids
are
actually
very
diverse
and
understanding
this
range
and
the
features
of
them
can
be
very
important
for
addressing.
So
I'm
going
to
briefly
talk
about
this,
as
well
as
a
recent
paper
that
I
was
one
of
the
co-authors
of
they
could
be
useful.
So
this
is
a
report
that
we
I
co-authored
with
the
national
institute
on
retirement
security
as
well
as
chiron
who's,
my
employer.
B
B
So
this
first
figure
is
from
the
report,
and
this
is
actually
something
that
I
designed
trying
to
demonstrate
the
various
structures
that
are
in
use
in
the
public
sector,
because
they
can
be
pretty
complicated
and
so
wanting
to
get
some
clarity
as
to
what
these
are.
So
if
we
start
at
the
top,
it
starts
with
the
traditional
db
defined
benefit
in
dc
to
find
contribution
plans
in
a
traditional
dc
plan.
B
The
amount
of
the
contributions
that
are
made
to
a
member's
balance
are
defined,
and
then
they
have
this
balance
to
spend
during
their
retirement,
and
this
type
of
structure
is
shown
in
green
in
this
graphic
and
then
in
a
traditional
defined
benefit
plan.
The
benefit
that
is
paid
over
a
person's
retirement
is
defined
based
on
formulas.
In
the
plan
in
the
public
sector,
these
are
almost
always
related
to
their
salary,
and
this
type
of
structure
is
shown
in
blue.
Now
that
we've
established
these
two
traditional
or
old
versions,
we
can
get
into
the
hybrid
types.
B
B
B
So
it's
a
little
bit
more
blue
than
green,
but
both
of
these
are
single
plans
that
members
are
in,
that
have
both
db
and
dc
elements
so
truly
are
hybrid,
and
this
is
where
that
word
hybrid
came
from,
and
I
know
many
times,
people
think
of
hybrids
as
this
new
thing
that
have
come
around.
But
one
thing
to
be
aware
is
that
cash
balances
have
existed
in
the
public
sector
since
at
least
1945,
so
they
aren't
necessarily
new.
B
B
Above
that,
then,
there's
horizontal
hybrid
plans
which
operate
in
parallel
and
with
those
you
apply
both
a
db
and
a
dc
plan
to
all
salary
of
the
members
and
the
levels
of
these
plans
are
typically
going
to
be
lower
than
if
they
were
stand
alone.
Since
the
members
are
participating
in
both
and
then
the
third
type
is
what
we
label
as
choice
plans,
and
this
is
where
members
elect
to
participate
in
either
a
db
or
a
dc
plan,
and
that's
in
contrast
to
the
vertical
and
horizontal
plans
where
the
members
may
be
participating
in
both.
B
The
second
part
of
the
paper
that
I'm
going
to
highlight
today
is
this
framework
that
we
included
in
the
paper
for
designing
a
plan.
Change
in
reality
is
actually
more
likely.
Considering
reforms
to
an
exist
existing
plan,
because
there
aren't
that
many
new
public
pension
plans
coming
into
existence,
there
are
some
but
the
majority
of
the
time.
It's
looking
at
an
existing
plan
and
going
what
sort
of
changes
can
we
make
going
forward
to
better
align
with
our
goals?
B
And
while
there
is
no
perfect
structure,
that's
going
to
work
for
all
plans.
We
suggest
that
there
is
a
universal
process
that
can
be
followed
in
determining
the
appropriate
structure
for
a
particular
plan
in
the
paper.
We
go
into
detail
in
each
of
these
steps,
but
today's
I'm
just
going
to
talk
about
the
high
level
steps
of
the
process.
B
B
Then
it's
important
to
consider
any
limitations
on
the
types
of
the
features
of
the
plan
that
are
going
to
be
offered,
and
these
are
going
to
be
specific
to
each
plan
and
sponsor
and
then
once
you've
done
those
two
things.
The
next
step
of
the
process
is
to
consider
the
risks
that
are
faced
when
you
offer
a
retirement
plan
and
consciously
determine
how
those
risks
are
going
to
be
allocated.
B
B
I
do
want
to
note
that
this
table
in
the
report
and
shown
here
is
done
based
on
a
typical
plan
of
each
type.
So
it's
very
important
to
be
aware
that
specific
plans
of
a
type
might
achieve
these
goals
differently,
based
on
the
provisions
of
that
plan
and
the
objectives
that
are
featured
here
all
relate
to
workforce
management,
which
is
essentially
using
the
pension
plan
to
support
the
desired
three
r's
recruitment,
retention
and
retirement
of
the
workforce
by
the
sponsor,
as
well
as
retirement
security
and
then
cost
considerations.
B
And
we
believe
that
this
table
is
useful
not
just
for
the
general
considerations
about
the
type
of
plan
for
getting
an
idea
of
what
approach
you
might
be
taking.
But
you
can
also
take
this
structure
and
idea
and
use
it
as
a
way
to
consider
the
specific
structure
that
you're
considering
implementing,
because
in
that
first
column,
all
of
the
kind
of
features
are
things
that
would
argue
are
important
to
keep
in
mind
as
you're
contemplating
any
plan
design
changes
or
features.
B
So
the
full
paper,
as
well
as
a
webinar
that
we
gave
talking
through
the
research
and
things,
are
available
on
the
nearest
website,
which
is
nearsonline.org
and
I'll,
drop
the
link
in
the
chat
as
well.
But
we
really
hope
that
this
is
a
useful
resource
for
legislators
who
are
considering
plan
reform,
and
I
appreciate
the
opportunity
to
share
this
paper
with
you
and
if
there
are
any
particular
questions
or
things,
I'd
be
happy
to
answer
them.
Thanks.
D
Thank
you,
elizabeth
and
thank
you
elena
anna.
Does
it
make
sense
to
roll
right
into
our
conversation
with
our
panelists
fantastic,
so
I
will
serve
as
moderator
for
a
discussion
with
kevin
durant
and
representative
massey.
Kevin,
as
anna
said,
is
from
the
state
of
kentucky,
and
he
excuse
me.
I
mixed
it
up.
New
jersey,
kevin
is
from
new
jersey
and
he's
the
executive
director
of
of
the
senate.
D
I
believe
majority
leader's
office
or
senate
majority
I'll
just
say,
and
of
course,
representative
massey
is
from
the
great
state
of
kentucky
and
was
a
a
driver
of
recent
reforms
in
that
state
to
bolster
the
fiscal
health
of
their
of
their
public
pension
plans.
So
thank
you
both
for
joining
us
and
I
guess
what
I'd
like
to
do
is
just
start
off
by
asking
you
both
what
your
major
concerns
were
as
we
entered
the
pandemic
and
and
realized.
D
F
So
when
I
came
into
the
house
in
2019,
I
came
in
with
a
background
of
having
served
on
the
board
of
education
for
22
years
and
had
a
lot
of
familiarity
with
all
of
the
people
that
represented
the
point
groups.
If
you
will,
that
would
affect
the
pensions,
the
superintendents,
the
teachers,
association,
the
jefferson
county
teachers,
association,
the
school
boards
etc.
F
So
before
the
pandemic
setup
happened,
we
had
actually
made
a
commitment
that
we
would
try
to
do
something
with
the
pension.
So,
in
the
midst
of
the
pandemic,
we
were
having
regular
monthly
meetings
with
all
of
these
stakeholders
and
we
started
with
what
could
we
agree
upon?
What
do
we
have
an
appetite
for?
What
do
we
not
have
an
appetite
for,
and
so
we
came
up
with
the
plan
that
was
ultimately
approved.
However,
I
will
say
that
in
kentucky
it
should
be
noted
that
teachers
do
not
pay
into
social
security.
F
The
beauty
of
this
program
is
that
there's
a
trigger
mechanism
that
if
it
ever
falls
below
90
percent
funding,
there
is
a
mandate
from
the
legislature
that
the
retirement
board
has
to
take
action
in
order
to
bring
it
up
to
the
full
level
of
funding.
So
it
won't
be
back
into
the
situation
that
we
presently
find
ourselves
in
with
an
underfunded
unfunded
legacy,
deficit
of
14
to
15
billion
dollars.
A
lot
of
the
ideas
that
were
generated
in
that
conversation
were
not
just
the
legislative
ideas.
F
They
came
from
the
educators
themselves,
who
realized
that
several
years
ago,
when
kentucky
moved
their
retirement
age
down
to
27
years,
that
was
a
mistake,
so
we
actually
moved
up
and
we
did
if
you
can
retire
with
with
30
years
of
service.
You
know
at
age,
at
age
55,
you
could
still
participate
in
this
plan
at
age,
65,
it's
with
10
years
of
service
at
age
65
with
five
years
of
service.
F
So
we
made
those
adjustments
and
we
got
buy-in
from
all
of
the
supporting
groups,
the
only
group
that
did
not
endorse
it.
They
didn't
oppose
it
either,
but
that
was
the
kentucky
education
association
and
I
think
that
was
based
on
a
lot
of
mistrust
that
it
developed
in
the
prior
interactions
that
occurred
back
in
2018.
F
The
potential
for
kentucky
is
that
over
a
30-year
assessment
period,
this
will
save
kentucky
3.5
billion
dollars.
There's
also
projected
surplus,
which
will
be
able
to
pour
over
to
the
underfunded
unfunded
legacy
deficit
that
currently
exists.
I
guess
the
real
concern
for
us
as
legislators
is
that
we're
waiting
on
an
experiential
study
to
come
out
here
shortly,
and
the
conservative
estimate
is
to
pay
towards
that
underfunded
deficit.
F
It's
going
to
cost
our
commonwealth
about
500
million
more
annually
to
pay
down
that
deficit,
so
what's
happening
is
with
all
of
those
those
pieces
is
that
so
much
money
is
going
to
pay
down
that
deficit
that
obviously
other
programs
go
on
without
financial
support.
So
we
are
very
happy
and
very
pleased
with
it.
It's
something
that
that
took
a
year
long
process
from
all
the
stakeholders.
In
the
midst
of
the
pandemic,
we
were
still
able
to
get
this
passed.
F
It
was
a
very
a
very
important
bill
for
us
because
it
keeps
us
from
having
to
deal
with
it
in
the
next
year's
section,
which
is
our
budget
session
and
at
least
we're
on
the
road
to
hopefully
stabilizing
our
pension
system,
and
then
the
recruitment
piece
is,
it
has
pieces
in
it.
That
will
be
very
beneficial
recruitment,
including
a
portability
factor.
F
So
if
a
teacher
is
in
the
system
in
the
first
five
years,
if
they
leave,
they
can
still
take
the
portion
with
them
that
they
invested,
but
after
five
years
they
can
actually
take
the
portion
they
invested
and
the
portion
that
the
state
invested
plus
interest.
So
that
is
very.
We
found
that
to
be
very
persuasive
among
millennials
as
we're
trying
to
recruit,
so
we
felt
like
it
was
a
good
fit
for
us
and
we
were
very
happy
to
get
it
through.
F
Works,
we
have
a
30-day
session
one
year
in
a
60-day
session
the
following
year.
What
the
pandemic
did
to
us
is
that
last
year,
since
the
pandemic
hit
us
in
the
middle
of
session,
what
normally
would
have
been
a
two-year
budget
became
a
one-year
budget.
So
in
our
30-day
session
this
year
we
had
to
deal
with
the
budget
process
again
as
well.
So
there's
just
been
a
caution.
You
know
cautiously
optimistic
outlook
with
regards
to
that,
because
of
the
way
it
hit
us
during
the
session.
D
Great
kevin,
can
I
ask
you
the
same
question?
How
and
I
know
just
for
everybody's
benefit.
We
chose
kevin
and
representative
massey
as
our
panelists
in
part,
because
their
states
are
among
those
that
were
vulnerable
before
before
all
the
economic
troubles
occurred
with
with
the
pandemic
and
so
in
new
jersey.
D
I
know
that
you
all,
like
in
kentucky,
have
had
an
eye
towards
what
to
do
with
your
pension
system
for
much
longer
than
the
last
18
months,
but
but
tell
us
what's
been
going
on
in
your
state
with
with
you
know,
both
before
and
during
the
pandemic
and
and
how
that's
changed
your
perspective
and
and
approach
to
fiscal
sustainability
of
pension
plans.
Sure.
G
We
will
get
to
about
seven
little
over
seven
billion
dollars
annually.
Is
our
pension
payment
going
forward
and
that
that'll
even
grow
slightly,
of
course,
looking
at
the
peer
report
at
a
six
percent
rate
of
a
return,
if
that
is
accurate,
that's
very
scary,
because
our
seven
billion
at
this
rate
is
based
on
a
seven
percent
annual
rate
of
return.
G
Certainly
we
we
were
very
anxious
going
into
the
pandemic
of
what
it
could
happen
to
the
market.
I
think
we
for
many
reasons,
we've
all
been
extremely
pleased
with
the
market
returns
and
and
how
they've
done.
Of
course,
it's
that
in
it
of
itself,
is
not
going
to
be
sustainable,
which
is
what
pew,
I
guess
is
indicating
in
their
lower
rate
of
returns
in
the
in
the
outward
years.
G
You
know
our
number
one
thing
as
far
as
it's
really
been
related
to
the
pension
was
we
had
a
lot
of
double
dippers.
We've
corrected
that
in
2011,
where
you
could
have
multiple
public
employee
positions,
collecting
multiple
salaries,
and
you
know
at
multiple
different
incomes
and
how
you
would
pay
into
it
and
that
got
corrected
back
under
governor
christie
with
senate
president
sweeney
who's
still
the
center
president
in
working
on
that
and
since
then,
and
what
we've
been
building
into
prior
to
the
pandemic
and
now
is
looking
at.
G
And
so
you
know
we're
still
analyzing
the
balance
of
that,
as
we
consider
any
changes
to
the
pension
system
and
with
the
we
have
a
non-forfeitable
right
in
new
jersey
for
our
public
employees
and
with
the
non-forfeitable
right
it's
hard
to
make
any
changes
to
existing
pension
plans,
which
means
that
we
would
have
to
do
it
for
all
newly
hired
employees.
Any
of
the
changes
that
we
do
make.
So
it
also
creates
a
much
slower
change
and
transition,
and
so
it
takes
us
decades,
basically
to
even
see
the
cost
savings.
G
Even
if
we
were
to
move
to
a
hybrid
plan,
so
we've
looked
at
two
other
ideas
related
to
how
we
can
build
assets
and
revenues
into
our
pension
plan
and
the
main
two
focuses.
We
have
we're
working
on
a
program
right
now
called
the
retirement
infrastructure,
collateralization
holdings
fund,
and
that
idea
is
to
take
a
look
at
what
state
assets.
We
have,
whether
it's
a
turnpike,
a
toll
road,
a
water
utility,
sewage
utility
and
looking
at
those
and
and
having
those
assets
that
potentially
we
can
build
revenue
ideas
off.
G
G
But
we've
been
working
with
folks
and
trying
to
get
congress
to
look
at
this,
but
is
what
we
would
call
a
piffia
which
is
the
pension
infrastructure,
finance
investment.
Whatever
you
know,
but
it's
built
off,
tiffia
and
wifia,
and
you
know,
and
with
that
you
know
it
would
be
a
similar
infrastructure
investment
plan,
of
which
you
would
have
to
create
some
revenues.
G
G
We
have
enough
costs
in
the
state
of
new
jersey
that
we're
not
funding
because
of
all
the
money
that
we're
putting
into
the
pension
system
that
that
two
billion
you
know,
would
open
up
the
door
to
fund
the
infrastructure
projects
and,
and
probably
some
other
much
needed
investment
that
we
have
throughout
the
state.
So
you
know
it's
it's.
Those
changes
are
all
whether
it's
a
hybrid,
the
piffia,
the
rich
plan.
Those
are
things
that
the
the
state
of
new
jersey
is
continuing
to
look
at.
G
The
senate
president
has
been
pushing
now
for
for
many
years
and
just
as
one
last
plug
on
on
why
we
look
at
all
this
and
why
I've
been
involved
from
my
position
and
where
the
senate
president
is
he's.
He
is
the
vice
president
of
national
international
iron
workers
and
he
runs
multiple
pension
plans.
So
his
expertise
is
in
in
pensions
and
so
he's
been
looking
at
this
problem
since
he
came
into
the
legislature
in
2002
and
we've
been,
we've
been
working
on
it
fairly
aggressively
since.
D
Yeah,
that's
that's
really
interesting
and
just
we've
really
enjoyed
working
with
the
senator's
office.
I
never
thought
we
would
work
in
new
jersey.
You
know
if
you'd
asked
me
five
years
ago
and
it's
been
it's
been
a
great
experience
and
to
kevin's
initial
point,
I
think
of
all
the
states
that
were
facing
kind
of
this
massive
uncertainty
at
the
very
beginning
of
the
pandemic.
D
I
think
new
jersey
had
just
committed
to
a
very
significant
ramp
up
in
their
contributions
and,
as
kevin
said,
you
know
made
their
first
actually
fun.
You
know
required
contribution
in
in
the
most
recent
past,
so
the
ability
to
do
that
in
a
global
pandemic
is
something
that
is
incredibly
laudable
and-
and
congratulations
on
that
in
particular
another
question
for
both
of
you
and
kevin.
I
think
you
alluded
to
this
also
at
the
beginning
of
your
remarks
when
talking
about
the
projected
six
percent.
G
Sure
I
mean
real
quick
on
that.
I
mean
it's.
You
know
the
the
balance
to
us
that
that
we're
now
addressing
is
as
we're
making
our
full
contribution
is
that
not
making
the
commitment
to
the
full
contribution
has
a
much
greater
cost
and
has-
and
we've
already
have
experienced
it-
that
by
by
making
any
other
decision,
then
not
to
fully
fund
it
is,
is
just
not
wise
and
will
never
be
fiscally
sustainable
for
the
state
new
jersey,
regardless
of
the
other
changes
that
we
may
or
may
not
make
to
the
system.
G
We
have
to
be
responsible
and
make
our
fully
contribution,
because
we
just
didn't
do
it
for
so
long
and
the
debt
is
is
almost
insurmountable
and
we
have
the
obligation
to
the
pensions
anyway.
So,
even
if
the
system
went
bankrupt,
we
would
still
have
the
obligations
to
pay
out
to
our
public
employees,
their
pensions
and
the
other
thing
that
we
we
did
and
again
another
thing
between
senate
president
sweeney
and
governor
christie.
G
Again,
you
know
bipartisan
approaches
we,
starting
on
a
on
a
quarterly
payment
for
the
for
the
state
which
I
know
only
a
few
handful
of
other
states
also
have,
and
we
didn't
have
previously.
So
what
would
happen
in
the
state
of
new
jersey
that
we
would
always
make
our
final
payment
on
the
last
day
of
the
budget
cycle,
and
then
we
only
made
as
much
as
we
could
with
the
money
that
we
had
left
at
that
at
that
time,
which
created
lots
and
lots
of
problems.
G
So,
for
the
last
five
six
years
now,
we've
been
making
quarterly
pension
payments
where
the
biggest
chunk
is
still
at
the
end
of
the
year,
but
we
make
pension
payments
along
the
way
and,
as
you
know,
you
collect
certainly
we're
start
earning
interest
right
and
better
interest
in
making
those
investments.
The
sooner
that
we
make
it.
So
that's
been
a
a
much
better
way.
F
The
problem
was:
is
that
the
cost
of
the
programming,
the
cost
of
the
coverage
kept
going
higher
and
higher,
and
so
that
deficit
continued
to
build,
and
this
has
happened
over
a
number
of
years,
so
we
put
our
committee
together.
One
thing
we
did
is:
not
only
did
we
go
to
all
of
those
heads
of
groups
like
I
talked
about,
but
we
also
encompassed
the
senate
and
the
house,
which
I
thought
was
very
beneficial
because
it
out
a
lot
of
times.
F
You
have
a
you
have
a
general
assembly,
but
you
have
the
chambers
pushing
against
one
another.
So
I
know
that
one
of
the
senators
that
was
on
that
committee
is
on
listening
on
the
call
today
senator
higdon,
and
he
has
been
in
the
in
the
senate
for
a
number
of
years,
and
this
has
been
something
near
and
dear
to
his
heart.
So
by
by
bringing
that
together,
we
were
able
to
basically
have
a
a
plan
together
ahead
of
the
session.
F
We
didn't
file
it
early
because
we
were
actually
making
changes
even
as
the
session
started,
but
what
we
were
looking
at
is
how
do
we
stop
the
bleeding
because,
with
the
cost
continuing
to
rise,
if
we
continue
to
add
more
and
more
teachers
in
our
case
to
this
pension
load,
then
it
was
just
going
to
continue
to
spiral
upwards
and
become
an
even
greater
deficit
than
we
already
had.
So
by
creating
this
new
tier
that
was
fully
funded,
we
are
no
longer
adding
to
that
load.
We
still
have
to
deal
with
that.
F
F
Some
people
believed
it
didn't
go
far
enough
as
far
as
trying
to
to
incorporate
this
this
hybrid
plan,
but
the
thing
is,
is
if
we
had
people
on
board
and
we
were
having
a
consensus
around
it,
so
we
were
able
to
take
what
we
could
get
for
right
now.
Knowing
that
there's
some
uncertainty,
that's
coming
down
the
road
with
regards
to
this
pandemic,
so
I
did
make
an
error.
My
earlier
statement
made
me
think
about
this.
F
We
initially
started
with
30
years
experience
at
age
55,
and
one
of
the
changes
they
made
is
raising
that
to
57,
and
they
did
that
because
they
wanted
to
bring
it
into
alignment
with
the
other
tiers
throughout
the
state.
So
one
of
the
things
you
really
are
trying
to
look
at
is
from
a
parody
perspective.
F
How
do
we
do
this
fairly
across
the
board
to
take
care
of
our
employees,
those
employees
that
we
need
that
are
integral
to
our
our
state's
success,
but
not
create
more
burden
going
into
the
future,
and
I
think
that's
the
biggest
concern
we
had.
You
know
the
lottery
system
in
kentucky's
little
different.
That
goes
to
our
keys
program,
which
is
a
educational
scholarship
initiative,
but
we're
trying
to
get
sports
betting
passed
with
the
idea
that
some
of
those
revenues
would
go
to
help
pay.
This
underfunded
legacy
deficit
that
currently
exists.
D
So
one
of
the
interesting
things
that
both
of
you
raised
and
have
in
common
is
this
concept
of
at
a
bare
minimum
holding
debt
constant,
as
opposed
to
letting
it
continue
to
grow
and
and
chipping
away
at
the
debt
over
time,
through
a
variety
of
different
measures
that
are
state-specific,
and
that
sounds
a
lot
like
one
of
the
concepts
or
definitions
of
success
that
we
at
pew
kind
of
talk
about.
You
know
how
do
you
manage
legacy
debt?
D
How
do
you
manage
fiscal
sustainability
given
like
legacy
debt
and
and
at
least
stop
the
stopping?
The
bleeding
is
an
obvious
answer
to
that
question
and
then,
obviously,
how
you
spend
down
that
debt
over
time
is
is
also
important,
but
beyond
managing
debt.
Can
I
ask
you
both
to
kind
of
weigh
in
a
little
bit
on
other
ways
that
you
define
success
as
you
deliberate
over
the
design
and
policies
for
for
your
pension
systems.
F
Well,
one
of
the
things
that
I
would
define
a
success
in
in
this
past
year
for
us
is
that
there
have
been
such
a
divide,
such
a
chasm
that
had
been
created
between
those
state
employees
and
the
general
assembly.
You
know
it
got
to
be
where
it
was
like
a
stalemate
that
you
know
no
matter
what
you
brought
forward
was
going
to
be
be
tossed
assad
or
raised
as
a
you
know,
a
barrier
to
kind
of
any
successful
negotiation,
and
so
we
knew
that
we
had
to
try
to
rebuild
some
of
those
relationships.
F
So
by
putting
this
group
together
we
did.
It
was
a
large
group,
but
by
putting
the
group
together-
and
we
didn't
do
it
as
a
task
force
or
an
ordained
work
group,
it's
just
a
group
of
folks.
That
said,
you
know
what
we
got
to
fix
this,
so
we
all
got
together
and
worked
on
it
together.
So
by
doing
that,
the
work
itself
was
done
out
of
the
public
eye,
but
when
it
came
together,
so
the
public
could
see
it
and
weigh
in
on
it.
F
We
already
had
this
plan
and
process
and
we
were
able
to
answer
those
questions
and
rebuild
some
of
this
trust
that
had
been
lost.
So
to
me
personally,
one
of
the
greatest
victories
was
trying
to
bring
the
groups
back
together
so
that
they
could
have
a
an
intelligent
conversation
about
how
we
solve
a
problem,
because
this
is
no
doubt
a
problem
not
just
in
kentucky
but
many
other
states
and
there's
a
lot
of
factors.
You
know
a
lot
of
in
the
past
a
lot
of
the
finger
pointing
was
back
and
forth.
F
Well,
it
was
the
legislature's
fault
because
they
didn't
fund
it
or
it
was.
It
was
the
teacher's
fault
because
they
wanted
too
much,
and
when
we
did
that
mistake
where
we
went
to
27
years,
they
should
have
spoke
up
then,
and
I've
tried
to
bring
it
to
the
point
of
look.
We
can't
undo
the
past,
but
we
need
to
take
the
problem
we
have
and
we
need
to
all
contribute
and
take
ownership
of
it
and
move
it
forward.
F
So,
with
every
one
of
those
groups
and
the
senate
and
the
house
taking
some
ownership
of
this
product,
I
think
we
had
some
successful
discussions
and
some
people
even
said
even
if
this
doesn't
pass
we've
already
made
some
had
some
success
because
we've
started
these
conversations,
passing
it
just
made
it
that
much
better,
because
we
know
that
there's
still
work
to
be
done.
But
now
we
have
the
mechanism
in
place
to
work
on
it.
D
G
G
You
know
anyway,
all
that
and
developing
the
hybrid
plan,
but
he
took
that
stuff
and
what
we
went
from
the
economic
physical
policy
group
to
what
we
call
the
path
to
progress
and
we
went
around
the
state
and
you
know,
talked
about
what
these
issues
are
and
we
held
town
halls
and
listen.
The
public
employees
came
out
and
in
droves
and
and
really
were
pushing
against
us
as
though
this
was
an
attack
on
them
and
which
it
was
not
right.
G
I
mean
this
is
just
an
area
of
major
concern
and
if
we're
spending
seven
billion
dollars
a
year
in
new
jersey,
only
on
pensions
out
of
a
42
billion
budget,
that's
a
significant
portion
of
our
budget
right
now,
that's
going
to
pensions
and
is
growing.
Had
we
not
even
done
the
changes
that
we
pushed
back,
it
would
be
even
greater
of
an
obligation
so
yeah
it's
hard
to
measure
success
other
than
you're
chipping
it
away.
But
I
I
agree
that
getting
it
out
there
and
having
the
public
understand.
G
You
know
what
what
we're
facing
and
what
this
means.
You
know
that's
the
most
important
part
and-
and
the
representative
said
it
well,
we
added
the
same
thing
in
new
jersey.
Is
it
it
was
everybody's
fault.
It
was
the
employee's
fault,
it
was
the
legislature's
fault,
it
was
the
governor's
fault,
it's
everybody's
fault,
but
guess
what
it's
all
of
our
problems
at
the
same
time.
So
right.
D
C
D
D
So,
on
the
horizon,
I
mean
both
you
and
kevin
mentioned.
You
know
that
you
know
the
process
is
not
over
and
it's
an
ongoing
one.
And
so
what
are
you
looking
at
for
the
future
now,
and
I
guess
I
would
also
add
somewhat
unrelatedly:
are
there
other
metrics
or
measures
or
information
that
you
think
the
general
public
or
policy
makers
themselves
require
to
make
that
process?
You
know
more
smooth
or
or
just
more
well
informed.
F
Well,
to
answer
that
candidly
kentucky's
had
a
lot
of
issues
that
we're
stealing
with
on
the
heels
of
this.
There
was
a
pretty
divisive
bill
regarding
what
they
called
educational
opportunity
accounts
and
whether
you
agree
with
that
or
disagree
with
that.
The
concern
was
is
that
we
are
funded
in
kentucky
under
a
seek
formula
and
so
and
what
that
means
is
seeking
excellent
education
in
kentucky.
For
those
that
don't
know,
kentucky's
entire
educational
system
was
declared
unconstitutional
in
1990,
and
so
we've
been
building
that
back
since
that
time,
around
equity
and
adequacy.
F
So
the
real
the
real
piece
to
deal
with
and
negotiate.
Is
it's
not
just
about
the
pension
piece?
It's
also
about
creating
environments
where
you
can
continue
to
get
people
that
want
to
come
to
your
state
and
work.
What
I
will
say
is
kentucky
has
been
blessed
with
a
lot
of
economic
development.
In
fact,
amazon
has
moved
into
my
neighborhood
and
we
have
the
second
largest
one-story
building
in
the
world.
Oh,
my
god,
and
amazon
prime
is
based
here
at
the
airport,
as
well
as
dhl,
which
is
a
courier
service.
F
It's
imperative
that
we
get
this,
not
only
the
pension
problem
under
control,
but
we
also
look
at
all
of
these
other
aspects
of
education
around
it
and
the
education
opportunity
accounts.
What
that
is
is
if
a
school.
If
a
student
is
not
getting
the
services
they
need
in
a
school,
then
they
will
be
able
to
get
essentially
a
credit
or
a
voucher
if
you
will
and
apply
that
towards
a
private
school
which
is
fine,
I'm
not
I'm
not
saying
that.
There's
not
some
some
validity
to
that.
F
F
So
I
think
part
of
the
challenge
for
the
legislature
is
to
try
to
work
all
of
this
together,
because
I
can
tell
you
in
the
chamber
when
we
called
the
bill,
the
pension
bill,
the
other
bill
that
was
called
right
on
the
heels
of
that
was
the
educational
opportunity
accounts.
So
part
of
the
issue
is
on
one
hand,
you're
asking
teachers
to
work
longer
and
pay
more
and,
on
the
other
hand,
foreseeably
you
could
be
taking
some
money
that
would
normally
go
into
your
education
system
and
redirecting
it
elsewhere,
which
might
have
a
purpose.
F
But
it's
just
the
balancing
and
the
public
perception
of
all.
Of
that
I
mean
the
goal
should
be
that
every
child
gets
an
appropriate
education
and
certainly
if
the
school
district
is
not
doing
that,
then
the
parent
or
the
taxpayer,
if
you
will,
should
be
able
to
to
intervene
in
those
circumstances.
But
how
do
you
do
that
in
a
sustainable
way
that
will
keep
your
public
schools
that
have
a
duty
to
provide
that
public
education
to
all
kids?
D
F
D
F
D
D
What
improvements
in
policy
and
practices
are
you
most
looking
for
going
forward
and,
as
a
somewhat
of
a
caveat
to
that
question,
do
you
feel,
like
you,
have
the
information
from
the
plan
and
and
and
so
on,
to
speak
to
that
process
adequately?
In
other
words,
are
there
other
measures
or
metrics
or
information
that
you
feel
would
be
useful
to
the
legislator,
a
legislature
or
the
public
writ
large?
You
know.
Is
information
adequate
for
that
process.
G
G
It
came
from
treasury.
It's
amazing
how
much
of
this
effort
has
really
been
driven
by
the
legislature
over
the
years
when
we
aren't
the
ones
with
the
with
the
information.
The
one
thing
we
do
know
is
the
amount
of
debt
that
is
out
there,
but
but
you
know
to
the
point
the
reason
why,
to
one
of
your,
I
think
earlier
questions
right
on
what
we're
looking
at
doing.
G
We
need
a
better
retirement
vehicle
for
them
that
we're
not
offering
now-
and
I
think,
that's
extremely
important
and
that's
what
we're
going
to
have
to
do
because
we
are
losing
and
you
know
we
continue
to
lose.
You
know
our
our
workforce.
Most
of
our
workforce
has
been
here
for
30
30
years
or
so
they're
all
retiring,
and
it's
been
very
hard
for
the
state
to
hire
people
and
it's
going
to
continue.
It's
been
hard
for
me
to
hire
people.
G
I
mean
our
salaries
have
gotten
better
competitively,
but
you
know
you
know
we
don't
offer
a
401k
and
a
401k
match,
and
and
sometimes
when
you
look
at
that-
and
I've
been
in
and
out
of
the
government
and
the
private
sector,
and
I,
like
my
public
pension
but
I'll,
tell
you,
I
would
have
taken
a
401k
and
a
heartbeat.
My
401ks
are
outperforming
my
you
know
my
pension
almost
every
day
of
the
week.
I
feel
so
it's
it's.
D
D
D
Did
the
state
perform
any
market
research
to
gather
data
about
exactly
what
potential
millennials
and
gen
z
employees
are
looking
for
and
how
did
that
shape
your
reforms?
If
so,
so,
let's
just
start
with
really
quick
answers
to
that
question,
and
then
there
was
a
follow-up
question
on
on
hybrids
which
I'd
love
to
get
to.
G
D
I
can't
remember
who
asked
this
question,
but
could
someone
speak
to
the
long
run
implications
of
hybrids
and
which
state
has
the
oldest
hybrid?
I'm
not
sure
if
they're
talking
about
the
long-run
implications
from
the
standpoint
of
the
government
or
the
retiree,
but
elizabeth,
maybe
you
could
start
us
off
with
an
answer
that
touches
on
both.
B
Okay,
so
the
oldest
hybrid
is
the
texas
municipal
retirement
system,
which
goes
back
to
the
40s
right
after
the
end
of
world
war
ii,
and
it
is
a
cash
balance
plan.
It
is
a
cash
balance
plan
that
has
some
very
interesting
features.
They
have
you
know
several
hundred
employers
and
each
employer
is
actually
able
to
pick
from
a
menu
of
provisions
which
include
both
the
employee
rate.
B
What
rate
the
member
matches
it
at
whether
or
not
they
have
a
cola
or
cost
of
living
adjustment,
and
they
actually
have
something
that
other
cash
balances
generally
don't,
which
is,
they
can
update
the
pay,
because
in
a
cash
balance,
it's
like
a
dc
and
you're
getting
it
paid
in
on
your
salary
over
the
course
of
your
career,
rather
than
your
final
average,
and
they
have
these
provisions
that
allow
it
to
update
it's
a
pretty
healthy,
well-run
system.
That
generally
shows
in
kind
of
the
good
lists
I
mean
in
terms
of
long-term
impact
of
hybrids.
B
D
E
I
mean
I,
I
think,
that
we,
what
we
see
about
hybrid
plans,
I
think
just
to
speak
to
the
question
of
kind
of
portability-
is
that
it's
just
it
becomes
this
nice
balance
right
of
providing
a
long-term,
a
good
benefit
for
long-term
career
employees,
while
also
a
good
benefit
for
workers
who
might
stay
10,
15
or
20
years
right
because
of
the
because,
depending
on
the
the
type
of
hybrid
right.
But
if
we're
thinking
about
a
side-by-side
hybrid
or
I
think
you
know
that
would
combine
a
pension
with
a
dc.
E
You
just
kind
of
get
a
little
bit
of
the
best
of
both
worlds
right
so
workers
who
are
going
to
stay
for
10
15
years
or
you
know
even
six
years-
they've
got
their
dc
or
401k
style
plan
and
then
workers
that
are
going
to
stay
the
lunk,
the
long
haul
have
kind
of
a
nice
blend
of
a
pension
while
also
having
the
401k
that
will
benefit
from
you
know.
The
high
market
returns
such.
B
Yeah-
and
I
think
south
dakota
is
often
one
that
we
talk
about
and
in
part
it's
not
because
their
provisions
are
right,
because
their
provisions
aren't
going
to
be
right
for
everyone,
but
what
they
did
in
terms
of
a
process
is,
they
said.
You
know
the
cost
that
we're
spending
is
kind
of
about
where
we
want
to
be
the
level
of
benefit,
but
our
benefits
we
haven't
updated
for
a
while.
We
think
that
they're,
not
necessarily
what
a
more
modern
workforce
and
things
is
looking
for,
and
so
they
went
through
and
they
systematically
ask
themselves.
B
Why
are
we
offering
it?
What
provisions
do
we
want
to
go
get
and
they
went
through
and
they
looked
at
every
provision
and
removed
some
and
added
some
and
they
ended
up
with
a
plan.
That's
about
the
same
costs,
but
everyone
is
generally
happier
with
it
and
one
of
the
things
that
they
have
is
for
those
shorter
term
employees
and
most
of
the
public
systems.
If
you
leave
after
a
short
period
of
time,
you
take
just
the
employee
contributions,
they
provide
a
portion
and
it's
whether
or
not
you're
vested.
B
But
you
know
some
portion
of
the
employer
contributions,
which
is
something
we
see
in
other
systems
like
colorado,
pera
or
you
can
get,
though
I
think
that
it's
often
the
one
that
I
point
to
when
someone
asks
you
know.
How
do
you
go
about
this
and
it's
not
even
that
they
got
it
perfect
or
right,
but
that
the
process
was
really
well
implemented.
B
E
B
Agreement
well,
the
the
the
pld
is
one
of
my
clients.
They
do
not
have
a
variable
benefit,
they
have
a
variable
contribution
and
they
also
went
through
a
process.
The
reason
why
I
speak
to
south
dakota
is
it's
larger,
that
it
was
only
the
local
but
the
changes
that
they
made.
They
also
went
through
and
they
eliminated
some
things
like
there
were
some
sick
leave
provisions
that
they
got
rid
of.
B
It
changed
some
other
outs,
but
it
is
the
contribution
that
is
now
variable
because
it
used
to
be
that
the
employees
paid
a
set
amount
and
then
the
employer
absorbed
everything
they
now
have
a
split.
That
is
a
58
to
the
employers,
42
and
then
there's
caps
on
it.
The
only
part
of
it
that's
a
variable
benefit.
Potentially
it
is
related
to
the
cola
and
it's
not
so
much
a
variable
benefit.
It's
just.
There
are
cola
freezes
possible
if
the
contributions
get
to
the
caps
in
terms
of
a
variable
benefit.
B
E
Yes,
no
right,
of
course
you
of
course
introduce
the
expert
a
little
bit.
I
think
just
kind
of
our
phrasing,
maybe
is
a
little
bit
confusing
there
and
that's
helpful,
but
one
question
to
ask
just
to
follow
about
mean:
have
they
have
they
reached
the
cap
in
the
last
couple
years?
Has
the
club
been
impacted?
No.
B
No
and
they're
not
near
it
right
now.
At
this
point
we
need
a
tail-end
event.
That's
three
standard
deviations
out
to
expect
to
be
hitting
that
cola
cap,
and
so
it
was
designed
that
way,
because
it
basically
was
an
order
of
who's
going
to
do
the
pain.
You
know,
employers
and
actives
can
do
it,
but
they
really
wanted
to
only
impact
the
retirees,
if
really
necessary,
because
they
have
the
least
capacity
to
absorb
yeah,
and
so
that
was
part
of
the
logic
there.
D
Interesting
well,
we
are
well
over
time
and
I
I
as
much
as
I
enjoy
a
deep
debate
about
the
best
way
to
implement,
hybrid
and,
and
there
are
just
thousands
of
variations,
I'm
sure.
I
think
this
is
a
good
breaking
point.
I
I
will
invite
participants
who
have
further
questions
to
either
contest
contact
us
directly
or
contact
anna
and
her
colleagues
to
pass
them
along
to
us
and
we'd
be
happy
to
continue
providing
information.
D
But
I
want
to
take
this
opportunity
to
thank
representative,
massey
and
kevin
in
his
absence,
as
well
as
elizabeth
and
elena
and,
of
course,
ncsl
for
agreeing
to
participate
in
the
session.
Thank
you
very
much.
It's
been
great
and
anna
I'll
turn
it
over
for
you
to
officially
close
us
out,
but
thank
you.
C
C
This
session
is
being
recorded,
so
you
can
access
it
after
the
fact,
please
do
submit
any
follow-up
questions
you
have
to
the
good
folks
at
pew
or
to
us
at
ncsl
and
finally,
our
last
session
in
the
spring
fiscal
briefing
series
is
going
to
be
next
wednesday
june
16th
at
2
p.m.
We're
going
to
be
looking
at
the
state
budget,
roller
coaster
throughout
the
pandemic,
so
I
hope
to
see
you
next
week.
Thank
you
all
so
much.
Thank
you.
Thank
you.