Worcester auditor says state pension reform law stymies good investments – Worcester Telegram & Gazette – telegram.com

WORCESTER —  City Auditor James A. DelSignore is raising red flags about the state’s pension reform law, claiming it has “stymied” the Worcester Retirement Board from being able to invest pension funds with companies it wants to do business with.

Mr. DelSignore, who also serves as chairman of the Worcester Retirement Board, contends the law, which was approved by the Legislature last year, could have significant ramifications on public pension systems statewide unless changes are made to it.

He said one of the biggest obstacles created by the pension reform law is that contractors cannot be granted indemnity by retirement boards to protect them from having to defend frivolous lawsuits.

Mr. DelSignore said that is making it difficult for the Retirement Board to hire companies it wants to invest its money with.

“We’ve got a real problem, and it’s a statewide problem,” Mr. DelSignore told the City Council Tuesday night. “”The law does not exclude contractors from gross negligence or fraud. We’re not looking to do that, and we wouldn’t want to do that.

“We’re having a difficult time making investment income now,” he added. “If something is not passed soon to change this law, we’re not going to be able to make any investments in private equities until the end of this year. It’s a big problem, and everyone ought to know about it.”

In the past, Mr. DelSignore said the Retirement Board was able to simply do investments with companies it wanted to do business with after a vetting process by the board.

But he said the pension reform law now requires retirement boards to go through a more rigorous search process when it wants to hire stock managers, bond managers, consultants, lawyers, actuaries or any “open-ended funds” it wants to invest in.

Also, retirement boards are not allowed to invest funds until they receive from the Public Employee Retirement Administration Commission acknowledgment that they complied with the guidelines of the selection process and other requirements.

“They (PERAC) haven’t approved any new investments that we’ve tried to make in the area of private equity,” Mr. DelSignore said. “We cannot hire anybody because of that.”

As a result, he said, the retirement board lost an opportunity to invest with a timber company.

He added that the law is also making it difficult for the board to continue its relationship with Harvest Investments, and there are similar concerns about when the board’s contract with Global Infrastructure comes up for renewal.

“We want to invest $8 million with them, but I’m pretty sure we’re not going to be able to do that,” Mr. DelSignore said. “We’re looking at companies that have been successful for us in the past, and we’re being stymied by our so-called oversight agency. It’s a real problem.

“We’re talking about this in Worcester because we’re coming up with some (investment contract) renewals before a lot of other places,” he added. “But this is going to impact every retirement board that doesn’t have their money with PRIT (Public Reserves Investment Trust fund).”

via Worcester auditor says state pension reform law stymies good investments – Worcester Telegram & Gazette – telegram.com.

Health care law survives _ with Roberts’ help – WTOP.com

WASHINGTON (AP) – In a momentous ruling touching virtually every American, the Supreme Court narrowly upheld President Barack Obama’s historic health care overhaul Thursday with the unlikely help of conservative Chief Justice John Roberts.

But the decision also gave Republicans unexpected ammunition to energize supporters in the battle for the White House and to fight “Obamacare” as a new tax on people who don’t obtain health insurance.

Roberts’ vote, along with those of the court’s four liberal justices, preserved the largest expansion of the nation’s social safety net in more than 45 years, including the hotly debated core requirement that nearly everyone have health insurance or pay a penalty. The aim is to extend coverage to more than 30 million people who now are uninsured

The 5-4 decision meant the huge overhaul, still taking effect, could proceed and pick up momentum over the next several years, with an impact on the way that countless Americans receive and pay for their personal medical care.

The ruling handed Obama a campaign-season victory in rejecting arguments that Congress went too far in approving the plan. However, Republicans quickly indicated they would try to use the decision against him.

At the White House, Obama declared, “Whatever the politics, today’s decision was a victory for people all over this country.” Blocks away, GOP presidential candidate Mitt Romney renewed his criticism of the overhaul, calling it “bad law” and promising to work to repeal it if elected in November.

Demonstrators for and against the law crowded the grounds outside the Supreme Court Building on Capitol Hill as Roberts, sitting at the center of the nine black-robed justices inside, announced the decision to a packed courtroom.

Breaking with the other conservative justices, Roberts read the judgment that allows the law to go forward. He explained at length the court’s view of the insurance mandate as a valid exercise of Congress’ authority to “lay and collect taxes.” The administration estimates that roughly 4 million people will pay the penalty rather than buy insurance.

Congress called the payment a penalty, not a tax, but Roberts said the court would not get hung up on labels. Among other indications it is a tax, Roberts said, “the payment is collected solely by the IRS through the normal means of taxation.”

“Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness,” Roberts said.

Many Republicans oppose the law, arguing that it marks a government takeover of health care at the same time it curtails Medicare spending and raises taxes. They also point to studies that predict private employers will be forced to reduce or eliminate coverage and that the legislation will wind up costing far more than estimated, raising federal deficits as a result.

Stocks of hospital companies rose and some insurance companies fell after the ruling.

The decision should help hospitals by adding millions of people to the rolls of the insured, expanding the pool of health care consumers. But by the same reasoning, insurance companies will also gain millions of premium-paying customers.

The court found problems with the law’s expansion of Medicaid, but even there it said the expansion could proceed as long as the federal government does not threaten to withhold states’ entire Medicaid allotment if they don’t take part.

Justices Stephen Breyer, Ruth Bader Ginsburg, Elena Kagan and Sonia Sotomayor joined Roberts in the outcome.

Justices Samuel Alito, Anthony Kennedy, Antonin Scalia and Clarence Thomas dissented.

Kennedy summarized the dissent in the courtroom. “In our view, the act before us is invalid in its entirety,” he said.

The dissenters said in a joint statement that the law “exceeds federal power both in mandating the purchase of health insurance and in denying non-consenting states all Medicaid funding.”

The justices rejected two of the administration’s three arguments in support of the insurance requirement. Roberts agreed with his conservative colleagues that Congress lacks the power under the Constitution’s commerce clause to put the mandate in place.

“The federal government does not have the power to order people to buy health insurance,” he said in a part of his opinion that the liberal justices did not join. But his crucial bottom line was: “The federal government does have the power to impose a tax on those without health insurance.”

In all, the justices spelled out their views in six opinions totaling 187 pages. Roberts, Kennedy and Ginsburg spent 51 minutes summarizing their views in the courtroom.  read more…

via Health care law survives _ with Roberts’ help – WTOP.com.

Top court upholds healthcare law in Obama triumph | Reuters

(Reuters) – The U.S. Supreme Court upheld President Barack Obama’s healthcare law on Thursday in an election-year triumph for him and fellow Democrats and a setback for Republican opponents of the most sweeping overhaul since the 1960s of the unwieldy U.S. healthcare system.

In a 5-4 ruling based on the power of Congress to impose taxes, the nation’s highest court preserved the law’s “individual mandate” requiring that most Americans obtain health insurance by 2014 or pay a tax. The justices also preserved, with some changes, a provision of the law expanding the Medicaid health insurance program for the poor.

Obama and Mitt Romney, the Republican challenger in the November 6 presidential election, immediately responded, with the president calling the ruling “a victory for people all over this country whose lives will be more secure because of this law and the Supreme Court’s decision to uphold it.”

“We will continue to implement this law and we’ll work together to improve on it,” said Obama, speaking somberly in the White House East Room, the same setting he used to announce the 2011 death of al Qaeda leader Osama bin Laden.

“What we won’t do – what the country can’t afford to do – is re-fight the political battles of two years ago or go back to the way things were. With today’s announcement, it’s time for us to move forward,” Obama added.

Romney, who pushed through a similar healthcare overhaul at the state level in 2006 as governor of Massachusetts but opposed Obama’s law, called on voters to help him defeat the president in order to repeal the law critics derisively call “Obamacare.”

“If we’re going get rid of ‘Obamacare’ we’re going to have to replace President Obama. My mission is to make sure we do exactly that,” Romney said on the roof of a building overlooking the U.S. Capitol.

Conservative Chief Justice John Roberts was joined by the court’s four liberal members – Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan – in upholding the law’s pivotal “individual mandate” provision.

The four dissenters, all from the court’s conservative wing, Justices Antonin Scalia, Anthony Kennedy, Clarence Thomas and Samuel Alito, would have struck down the entire law.

The healthcare law, known formally as the Patient Protection and Affordable Care Act, is the biggest overhaul of the $2.6 trillion healthcare system in about 50 years. It was signed by Obama in March 2010 and promptly put to the test in the courts by 26 of the 50 states and a trade group for small businesses.

The court’s decision largely vindicates Obama and Democratic lawmakers in their attempt to fix a system that, while representing 18 percent of the economy, leaves 16 percent of Americans uninsured, a fact that sets the United States apart in the industrialized world.  read more…

via Top court upholds healthcare law in Obama triumph | Reuters.

Duluth police lieutenant doesn’t make cut St. Cloud chief job | Duluth News Tribune | Duluth, Minnesota

Interim St. Cloud Police Chief Richard Wilson is one of three finalists for the position of police chief after interviews on Wednesday.

Wilson, William Blair Anderson, chief deputy with the Carver County Sheriff’s Office, and David Ebinger, chief of the Moorhead Police Department, will be interviewed by St. Cloud Mayor Dave Kleis, who will make the selection of his city’s next police chief.

Duluth police Lt. Leigh Wright and Chicago Police Department Lt. Maurice Richards were among the five officers interviewed on Wednesday but not chosen as finalists.

St. Cloud City Administrator Michael Williams said it hasn’t been determined when the new chief will be named.

via Duluth police lieutenant doesn’t make cut St. Cloud chief job | Duluth News Tribune | Duluth, Minnesota.

Supreme Court Rules against SEIU in Knox Case; Protects Liberty | National Legal and Policy Center

The U.S. Supreme Court once again has put the nation’s public-sector unions on notice: Fee-paying nonmember workers under contract can’t be forced to subsidize political causes they don’t like. Last Thursday, June 21, in its long-awaited decision in Knox et al. v. SEIU, the Court affirmed a longstanding principle. Ruling 7-2 on the merits of the case and 5-4 on the issue of First Amendment rights, the Court concluded that the Sacramento-based Service Employees International Union (SEIU) Local 1000, California’s largest public employee union, had deprived “agency shop” workers of the right to opt out of making monetary contributions toward union advocacy. The ruling may have long-term implications for state and local government fiscal reform, especially in jurisdictions where public-sector union power is leading to major budget cutbacks.

A union contract shouldn’t render unionized public-sector employees, any more than their compatriots in the private sector, hostage to the preferences of their leaders. The Supreme Court several times has said as much. In Abood v. Detroit Board of Education, 431 U.S. 209 (1977), the Court held that nonunion public employees have a First Amendment right to veto the portion of compulsory fees dedicated to contributions to political candidates or on “express[ions of] political views unrelated to [the union’s] duties as exclusive bargaining representatives.” Nine years later, in Chicago Teachers Union v. Hudson, 475 U.S. 292 (1986), the High Court unanimously affirmed this view, holding that due process requires that a public-sector union can collect agency fees from nonmembers only if it observes certain procedural safeguards. The Court ruled that unions provide nonmembers with a “fair opportunity” to assess the impact of paying for non-chargeable union activities. And in a Michigan case, Lehnert v. Ferris Faculty Association, 500 U.S. 507 (1991), the Court concluded that union activities, in order to be chargeable to nonmembers, must be both “germaine” to the collective process and do not “significantly add to the burdening of free speech that is inherent in allowance of an agency or union shop.”

These decisions have landmark parallels in the private sector. In Communications Workers v. Beck, 487 U.S. 735 (1988), which originated in Maryland among several dissenting AT&T employees, the Supreme Court held that fee-paying nonmembers can’t be forced to fund union activities beyond collective bargaining, contract administration or grievance hearings. The union had to provide the dissenters a refund of these non-business activities. Four years earlier, the High Court had ruled in Ellis v. Railway Clerks, 466 U.S. 435 (1984), that the Railway Act prohibits unions from coercing financial support from fee-paying workers on issues unrelated to collective bargaining and contract administration, and the parts of union publications reporting on non-chargeable activities. The court in the latter case also barred unions from using such funds for involuntary short-term loans – “interim assessments.” A union, the court opined, “cannot be allowed to commit dissenters’ funds to improper uses even temporarily” under which unions collect full payments, use part of them for non-chargeable purposes, and later refund that part.

What we have here, then, is a clearly established court precedent, over decades and at the highest level: A union, whether representing public- or private-sector employees, can’t use dues or fees for non-business purposes, not even on a temporary basis, without the prior consent of affected workers. Service Employees Local 1000, however, isn’t the kind of union impressed with precedent, especially when their leaders are mobilized for political action. And back in 2005, it was mobilized. That’s what brought this case about.  read more…

via Supreme Court Rules against SEIU in Knox Case; Protects Liberty | National Legal and Policy Center.

OCERS hires famed pension reform advocate – OC Watchdog : The Orange County Register

Girard Miller,

 one of the loudest and most respected voices in the world of pension reform, has been effectively silenced — bad news for us at The Watchdog.

Miller has been hired as the chief investment officer of the Orange County Employees’ Retirement System — good news for the 39,000 public employees represented by that agency.

“It’s a huge, gigantic, triple-star coup to recruit Girard Miller. He’s an absolute genius,” raved Marcia Fritz, president of Californians for Fiscal Responsibility, an advocate for wrangling out-of-control pensions. “Society as a whole is losing an incredible talent.”

Miller has ended his column in “Governing” magazine, which was a must-read for those on either side of the pension debate. In a no-nonsense style, Miller brought his training as a strategist for retirement finance to the debate, often outing the hyperbole and rhetoric on both sides. He acknowledged those sincere on either side, as well as the “devils.”

In his farewell column — and in an email to the Watchdog – Miller said he will only speak publicly on investment issues and any interview must be pre-approved by OCERS. This was a man who fearlessly criticized clients of his old firm, the PFM Group.

“We lost an eloquent voice, but Orange County gained an outstanding professional,” said Orange County Supervisor John Moorlach, also one of the most well-known advocates of harnassing pensions in the country. “What a great way to muzzle a pension reform advocate, hire him.”

In his farewell, Miller writes that he now will be “working hands-on to improve a retirement system, while performing the labor I love the most — investing public funds.” He comes close to promising OCERS that its funding ratio will be improved over the next 10 years with him at the helm.

While his public voice is muted, it lives in the ”Governing” archives, where one can find pieces like “Pension Puffery: 12 myths that Deserve Debunking,” in which he calls bull on both sides of the debate. My favorite is the $100,000 Pension Club. Miller rightfully points out that the club is only 4 percent of the retirees, though growing rapidly. Yet the media, including yours truly, has latched onto these retirements as blog fodder.

“Does anybody care about a $100,000 pension for a 65-year-old judge or a 25-year urban police captain or fire chief who has personally protected hundreds of citizens … those folks are the true public servants and should be society’s heroes, not the scapegoats,” Miller wrote.

But in the same column, Miller suggested putting hard-dollar caps on pensions, which would help bring them under control.

Miller decries the $23,000 average retirement espoused by pension defenders (or more accurately lobbyists).

“I don’t understand why pension Pinnochios resort to flaky statistics when the real numbers would be far more credible,” he says, noting that educators get, on the average, $68,000.

Miller starts his OCERS job on Monday, ending a nationwide search by Houston-based Heidrick & Struggles.

“We look forward to having Girard Miller lead our investment team. His investment experience and thorough understanding of public pension plans and retirement-related issues will be of tremendous value to assist the board of retirement in managing OCERS’ increasingly diversified portfolio,” said Steve Delaney, chief executive of  the $9.2 billion retirement agency.

Miller was the president of Janus Mutual Funds and, prior to that, was the president of the ICMA Retirement Corporation for 10 years. He also headed Fidelity Investments public funds group.

This bit from his farewell column in Governing will give you an idea of who is coming on board:

I have done my best to “tell it like it is” to those looking for genuine ways to reform and improve pension systems. I’ve tried to be fair in my work and my writings, defending the interests of taxpayers first while recognizing the value of public service and the contributions of many who devote their working lives to that cause. Sadly, many public sector retirement systems today are so under-funded and mal-structured as to present a serious financial threat to state and local governments and their citizens. As my companion column on the voters’ mood this week explains, I believe the tide has turned — perhaps irreversibly now — toward incremental and systematic reforms that will ultimately swing the pendulum back to sustainable yet sufficient public employee benefits plans.

My voice has been just one of many. But I have written enough to compel the skeptics, the believers and the devils in this business to think about the underlying structural and financial problems more intelligently than they would have otherwise. That’s really all that any commentator can ever hope to achieve.

Oh, what we’d give to be a fly on the wall at OCERS. We’ll be keeping our eye out for the changes which seem sure to come there.

via OCERS hires famed pension reform advocate – OC Watchdog : The Orange County Register.

RTM passes Darien Town Hall Union contract – Darien News

The Representative Town Meeting passed a newly negotiated contract between the town and the Town Hall Union in a special meeting Monday, June 25.

Bruce Orr, Finance and Budget Committee chairman, presented his committee’s approval to the RTM, highlighting the main talking points from its June 18 meeting.

“The bargaining unit represented 28 members, which is populated with mainly administrative functions within the Town Hall, but also includes staff in the fire marshal’s office and emergency management,” Orr said.

He said the contract has a retroactive start date of July 1, 2011, when the general wage increased by 1.75 percent. Fiscal years 2012-13 and 2013-14 each sees 2.25 percent wage increases.

“We reviewed that at the committee as `reasonable and in line’ with both regional standards and with other town contracts that have recently been ratified and approved,” he said, acknowledging that five of 13 members were present for the vote. The vote was unanimous, he said, adding that the committee’s voting group was two bodies short of a quorum.

Orr said Administrative Officer Karl Kilduff was helpful in answering the committee’s questions regarding the contract settlement.

“While you notice … that this contract goes into effect last year, Mr. Kilduff assures us enough funds have been approved for the retroactive increase of 1.75 percent for the fiscal year ending June 2012,” Orr said, noting separately that annual wage increases are partially offset by employee contributions to health care premiums.

This is evident in a memorandum Kilduff sent to the Board of Finance, which highlights significant changes from the previous contract.

“Based on current rates of enrollment, health care changes provide $7,600 in cost savings,” the memo said.

Human Resources Director Nancy Markey said the contract was overwhelmingly passed by the Town Hall Union’s membership.

“I think this is a fair contract,” Markey said.

The RTM voted 55-2 with no abstentions.

via RTM passes Darien Town Hall Union contract – Darien News.

Wisconsin’s Scott Walker: Health care ruling means ‘massive tax’ hike, won’t proceed with law – TwinCities.com

  MADISON, Wis. — Gov. Scott Walker says Wisconsin will not proceed with implementing the federal health care overhaul despite the U.S. Supreme Court upholding the central part of the federal law.

Walker said Thursday, June 28, that he would have preferred the court strike down the law, but he is holding out hope that a new president and Republican-controlled Congress will overturn it next year. In the meantime, the state will not proceed with setting up a health care exchange as is required, Walker said.

He said the law will be a “massive tax increase on the people of Wisconsin and America.”

Walker said the decision creates uncertainty for Wisconsin businesses, and that’s bad for job growth.

Robert Kraig, executive director of health care advocacy group Citizen Action of Wisconsin, said Walker has a moral obligation to begin the implementation process.

Wisconsin Republicans said the ruling would have no immediate effect in the state aside from galvanizing the GOP going into the November elections.

via Wisconsin’s Scott Walker: Health care ruling means ‘massive tax’ hike, won’t proceed with law – TwinCities.com.

Unit 5 injunction hearing on outsourcing bus service postponed

BLOOMINGTON — A temporary restraining order hearing to block efforts by Unit 5 schools to outsource bus service was canceled Thursday morning.

The hearing was scheduled for 9:30 a.m., but AFSCME representative Renee Nestler released a statement announcing the hearing will be rescheduled for July.

“The cancellation is due to Unit 5 clarifying its intentions to continue transportation department employee’s employment and it not ending July 1 at the onset of the contract with First Student,” she said. “Unit 5 will need to have the school board vote on the terminations, which they stated they would not do earlier than July 11.”

Once the school board votes to end employment, per the Illinois School Code, Unit 5 has to give employees a 30-day notice which then extends employment to at least Aug. 10.

The district has committed to extending benefits through that time, she said.

Superintendent Gary Niehaus said he anticipated more information would be released later Thursday.

“We’re still working on some things,” Niehaus said at the McLean County Law and Justice Center Thursday. “We’re not finished yet.”

This week, training began for drivers and monitors for those hired by First Student, the firm hired to provide bus service. All transportation employees should continue the hiring process with First Student, Nestler said.

This story will be updated.

via Unit 5 injunction hearing on outsourcing bus service postponed.

Quinn, lawmakers hung up on pension reform – Chicago Tribune

Negotiations between Gov. Pat Quinn and legislative leaders about public employee pension reform hit another roadblock Thursday, with talks morphing from a discussion about retirement benefits to education funding equality in Illinois.

The issues became entwined as Democrats continue to push a proposal that would shift some pension costs from the state now pays on to suburban and Downstate school districts. Republicans oppose the plan, saying it would force property taxes to rise as schools try to recoup the extra costs.

GOP leaders say the cost-shift idea shouldn’t be connected to pension reform because it’s a school funding issue, and on Thursday asked for more time to study how money is distributed to schools across the state.

Quinn said Senate Republicans requested a year to go over the facts. But the Democratic governor would only agree to give them five weeks, saying every day pension reforms don’t happen the system adds another $12.6 million to the existing $83 billion debt.

“We’ll give them all the information, have all the studies that we can possibly muster, but ultimately we have to come to moving the ball forward,” Quinn said. “We have to get fundamental, comprehensive pension reform.”

A spokeswoman for Senate Republican leader Christine Radogno of Lemont said she did not ask for a year to go over education data, but suggested it could take months and stretch into next year.

Earlier this week, Quinn’s office released information that it says shows schools could easily absorb the extra pension costs when phased in over several years. But Republicans say the data raised more questions than answers.

By asking for more time to study education funding, Republicans are attempting to force Democrats to back away from the cost-shift idea. Either Democrats peel that portion off and move forward with broader pension reforms this summer, or Republicans can put the blame on Democrats for inaction during the fall election.

“When you don’t want to talk about the free lunches for local school districts, you talk about school funding,” said House Speaker Michael Madigan, D-Chicago.

But Madigan said he was confident an agreement could eventually be reached, saying it can be difficult to move plans forward in Springfield “but if you stay with it, there will be accomplishments.”

“This is a lingering issue, we’re continuing to work on the issue, we’re not walking away from it,” Madigan said. “It’s very complicated.”

via Quinn, lawmakers hung up on pension reform – Chicago Tribune.