Governor Christie Names Nine Members of Pension Panel

Governor Christie has appointed nine individuals to his pension review panel. What is of interest in that two of the members, Thomas Healey and Carl Hess, co-authored a  2012 Harvard paper entitled Underfunded Public Pensions in the United States:The Size of the Problem, the Obstacles to Reform and the Path Forward that has the following recommendations:

  • Eliminate legislative end runs around the collective bargaining process (i.e., sweeteners). Benefits would be either negotiated or legislated, but not both.
  • Eliminate final-salary plans in favor of final average compensation (FAC), career average or hybrid (e.g., cash balance) designs.
  • Reduce/eliminate postretirement cost-of-living adjustments, or make them subject to affordability (possibly conditioned on funded status).
  • Tighten up eligibility for heavily subsidized benefits, such as disability and early retirement.
  • Tighten up eligibility for overtime hours to reduce opportunities for pension padding.
  • Raise the age of eligibility for full retirement benefits. When early retirement is offered, it should be actuarially fair.
  • Reduce benefit accruals (i.e., use lower percentages of compensation to calculate benefit accruals).
  • Combine pensions with Social Security participation.
  • Raise employee contributions     (Harvard Kennedy School, News and Events)

 

 

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s