One example of how US courts used to affirm that stance was VOTING RIGHTS ACT. Right wing states deliberately placed laws surrounding voting meant to exclude ever-more population groups DENYING equal opportunity and access to all having the right to VOTE. The courts placed those right wing states under court oversight to assure no LAWS installed to prohibit equal opportunity to vote were installed.
WHETHER OUR 99% ARE RIGHT WING OR LEFT WING----THESE EQUAL OPPORTUNITY LAWS TIED TO US CONSTITUTIONAL AMENDMENTS OPENED THE DOOR TO WHITE 99% AS MUCH AS BLACK AND BROWN 99% TO CITIZENSHIP RIGHTS.
Today's stance of public agencies being shrouded in secrecy because of private partnerships and quasi-government status are the same kinds of policies keeping US citizens from their rights---as was those VOTING RIGHTS 'poll taxes' et al.
Texas Republicans call for repealing the Voting Rights Act
06/18/14 03:52 PM--Updated 06/25/14 05:07 PM
By Zachary Roth
When the Supreme Court weakened the Voting Rights Act last year, it allowed Texas to implement what is perhaps the nation’s strictest photo ID law. But according to the state’s Republicans, the federal government still has too much influence on how it runs elections.
The Texas GOP platform, released Thursday, calls for the repeal of the Voting Rights Act (VRA) of 1965, the most successful civil-rights law in the nation’s history. It also supports scrapping the National Voter Registration Act of 1993, which has helped millions register to vote. And it advocates making voters re-register every four years, among other restrictive policies.
In sum, the party wants to get the federal government out of the business of overseeing state elections—returning voting law to where it was before the civil rights movement.
“We urge that the Voter [sic] Rights Act of 1965, codified and updated in 1973, be repealed and not reauthorized,” the platform says.
These aren’t new positions—the platform’s section on voting issues is largely unchanged from 2012. But circumstances have changed. Last year, the Supreme Court badly weakened the VRA by invalidating the provision that required certain states with a history of discrimination, including Texas, to get federal approval before making changes to their voting systems. That allowed Texas to put into effect its strict voter ID law, which had been blocked by a court under the VRA.
The Justice Department is continuing to challenge Texas’s voter ID law under a different provision of the VRA that still exists, and which prohibits racial discrimination in voting.
Without the VRA, the only bar on racial discrimination in voting would be the 14th and 15th Amendments to the Constitution. These weren’t enough to stop a century of Jim Crow, which used tactics like literacy tests to get around the prohibition on explicitly denying the right to vote on account of race. It was only thanks to the VRA, which took a broader view of what constitutes racial discrimination in voting, that the right to vote for all Americans was meaningfully assured.
Voting rights advocates are currently pushing Congress—with little success—to advance a bill that would strengthen the VRA in the wake of the Supreme Court’s ruling. Texas Republicans’ stance is a reminder that many conservatives want to go in the opposite direction.
A spokesman for Texas Attorney General Greg Abbott—who has fought for the ID law in court and who supported the legal effort to weaken the VRA—did not immediately respond to a request for comment on whether he supports repealing the VRA entirely.
The GOP platform also calls for repeal of the 2002 Help America Vote Act—which has made it easier for millions of Americans to cast a ballot—calling the law “unconstitutional.” And it explicitly says states have the right to disenfranchise ex-felons.
Below is the full voting section of the platform, which appears not to have been updated since 2012:
Voter Registration- We support restoring integrity to the voter registration rolls and reducing voter fraud. We support repeal of all motor voter laws; re-registering voters every four years; requiring photo ID of all registrants; proof of residency and citizenship, along with voter registration application; retention of the 30-day registration deadline; and requiring that a list of certified deaths be provided to the Secretary of State in order that the names of deceased voters be removed from the list of registered voters.
Selection of Primary Candidates- The SREC should study the Utah model for selecting primary
Electoral College- We strongly support the Electoral College.
Voting Rights- We support equal suffrage for all United States citizens of voting age who are not felons. We oppose any identification of citizens by race, origin, or creed and oppose use of any such identification for purposes of creating voting districts.
Voter Rights Act- We urge that the Voter Rights Act of 1965, codified and updated in 1973, be repealed and not reauthorized.
Felon Voting- We affirm the constitutional authority of state legislatures to regulate voting, including disenfranchisement of convicted felons.
Protecting Active Military Personnel’s Right to Vote- We urge the Texas Secretary of State and the United States Attorney General to ensure that voting rights of our armed forces will neither be denied nor obstructed, and all valid absentee votes shall be counted.
Fair Election Procedures- We support modifications and strengthening of election laws to ensure ballot integrity and fair elections. We strongly urge the Texas Attorney General to litigate the previously passed Voter ID legislation. We support increased scrutiny and security in balloting by mail, prohibition of internet voting and any electronic voting lacking a verifiable paper trail, prohibition of mobile voting, prosecution for election fraud with jail sentences, repeal of the unconstitutional “Help America Vote Act”, and assurance that each polling place has a distinctly marked, and if possible, separate location for Republican and Democrat primary voting.
'a SIMPLE IRA that allows for employer contributions into participating worker’s accounts, a payroll-deduction IRA that does not allow employer contributions, and the myRA, the retirement savings vehicle proposed by the Obama administration that is backed by Treasury bonds'.
Again, this week we are looking broadly across public policy to remember what CITIZENSHIP POLICY brought US 99% of WE THE PEOPLE in protections tied to opportunity and access needed for anyone to be a CITIZEN.
We mentioned pensions---public pensions for example because like our payroll taxes for SS and Medicare Trusts----these deductions occur AUTOMATICALLY and we are told DON'T WORRY this is good for your retirement. Fast-forward to today when CLINTON/BUSH/OBAMA are being allowed to pass policy and allowing government to act without transparency-----and we have US citizens having money deducted while losing all ability to KNOW how that county, state, national government is investing these funds.
Here is the STATE taking over as a private pension deduction provider-----tying those deductions to global banking structures. OBAMA and Clinton neo-liberals created myRA directed temporarily as 'voluntary' but with a goal of mandating deductions from low-income workers to be sent to these same global banking investment structures.
On January 22, 2014, Rep. Martin Quezada introduced HB 2063, the Arizona Secure Choice Retirement Savings Program, a mandatory system of payroll deposit individual retirement savings arrangements (IRAs) for private employers in Arizona that have five or more employees and that do not offer other retirement plans to their workers. The bill was assigned to the House Appropriations and Rules Committees, and no further action was taken in the 2013-2014 legislative session'.
No doubt MARTIN QUEZADA is selling this as good for poor workers------when in fact MOVING FORWARD going strong in Arizona will have ONE WORLD ONE GOVERNANCE global 1% and corporations controlling those deductions----NOT US PUBLIC AGENCIES.
On May 10, 2016, Governor Lawrence Hogan signed into law HB 1378, a law establishing the Maryland Small Business Retirement Savings Program and Trust. HB 1378 was introduced by Delegate William Frick , and its counterpart SB 1007 was introduced by Senator Douglas J. J. Peters. The new law went into effect on July 1, 2016'.
THIS IS THE STATE VERSION OF OBAMA'S MY RA-----TARGETING LOW-INCOME WORKERS WITH WHAT WILL BE A TAXATION STRUCTURE PRETENDING TO BE 'RETIREMENT'
But this is STATE'S RIGHTS say 5% to the 1% right wing global banking pols and players! NO, states have no sovereignty when those same global banking 1% declare those states SANCTUARY STATES----meaning US Foreign Economic Zones operating independently of US Federal, state, and local laws.
PLEASE GLANCE THROUGH A LONG ARTICLE JUST TO SEE BOTH RIGHT WING AND FAR-RIGHT WING NEO-LIBERAL STATES HAVE ADOPTED THESE PRIVATE SAVINGS ACCOUNTS DUE TO REPLACE OUR FEDERAL SS, MEDICARE, AND BOTH PUBLIC AND PRIVATE WORKER 401Ks.
State-based retirement plans for the private sector
States around the country are looking into ways of using the efficiencies of public retirement systems to administer new types of pension plans for private-sector workers. Below are brief summaries of plans that have either passed or are being considered. States whose names are highlighed below have introduced or enacted legislation to provide retirement plans for private-sector workers.
Alabama | Alaska | Arizona |Arkansas | California | Colorado | Connecticut | Delaware | Florida | Georgia | Hawaii | Idaho | Illinois | Indiana | Iowa | Kansas | Kentucky | Louisiana | Maine | Maryland | Massachusetts | Michigan | Minnesota | Mississippi | Missouri | Montana | Nebraska | Nevada | New Hampshire | New Jersey | New Mexico | New York | North Carolina | North Dakota | Ohio | Oklahoma | Oregon | Pennsylvania | Rhode Island | South Carolina | South Dakota | Tennessee | Texas | Utah | Vermont | Virginia | Washington | West Virginia | Wisconsin | Wyoming
In addition to the below summaries, AARP’s Public Policy Institute has established a State Retirement Savings Resource Center, a library of policy papers, key facts, opinion pieces, and studies related to state-based plans for private-sector workers. The Pension Rights Center authored two papers -- one on consumer protections in such plans and one on the advantages of pooled accounts.
In September 2015, the Government Accountability Office published a report, Federal Action Could Help State Efforts to Expand Private Sector Coverage, which looks at coverage rates, efforts by states and other countries to expand coverage, and the obstacles states face in implementing new state-based plans.
On January 22, 2014, Rep. Martin Quezada introduced HB 2063, the Arizona Secure Choice Retirement Savings Program, a mandatory system of payroll deposit individual retirement savings arrangements (IRAs) for private employers in Arizona that have five or more employees and that do not offer other retirement plans to their workers. The bill was assigned to the House Appropriations and Rules Committees, and no further action was taken in the 2013-2014 legislative session.
On September 28, 2012, Governor Jerry Brown signed into law S.B. 1234, the California Secure Choice Retirement Savings Trust Act. The bill, which was sponsored by Senator Kevin de Leόn, will eventually require that all businesses with five or more employees that do not already offer a retirement plan enroll their workers in a new type of savings plan based on IRAs. Before this can occur, a number of steps need to be taken, including passage by the California legislature of subsequent implementing legislation.
To date, the State has established the California Secure Choice Retirement Savings Investment Board and the California Secure Choice Retirement Savings Trust, as required by the statute. The Board has been meeting monthly since 2013, collected information on retirement issues, and reviewed market and legal analyses of the program. On March 28, 2016, the Board voted unanimously to recommend approval of the Program, and sent letters to state leaders outlining the Board’s recommendations for legislation implementing the Secure Choice Program. The Board’s recommendations for inclusion in the legislation include:
- Establishing managed accounts that would be invested in U.S. Treasuries or similarly safe investments within the first three years of the program, with the expectation that during that period the Board would begin to develop investment options that address risk-sharing and smoothing of market losses and gains. Options could include, but not be limited to, custom pooled, professionally managed funds that minimize management costs and feels, the creation of a reserve fund, or the establishment of investment products
- Providing for the Board to conduct an annual peer review to compare California Security Choice funds with similar funds on performance and fees.
- Requiring the Board to seek to minimize participant fees
- Requiring the Board to establish an initial automatic contribution rate of between 2% and 5% of salary
- Allowing the Board to implement automatic escalation of participant’s contribution rates up to 10% of salary, with the option for participants to stop automatic escalation and change their contribution rates.
- Establishing a fiduciary duty in the Board and its contracted administrators and consultants toward the participants of the program.
- Permitting the inclusion of quasi-public and quasi-private workers to be enrolled if found legally permissible
- Requiring communication and education on the Program, including the inherent risks of its investment strategies, making clear that the state does not have liability for the investment performance or payment of benefits to participants
- Directing that a default payout method to retirees be determined
- Clearly defining the ‘ministerial duties’ expected of employers in the implementation of the program, and limiting liability for all employers if an employer inadvertently provides more than ministerial duties.
- Fully determining all necessary costs for administration of the program and ensuring all investment options are appropriately considered by the Board.
- Making determinations on how to structure the Program to ensure the state is prohibited from incurring liabilities associated with administering the Program.
In February, 2016, Senator Kevin de Leon introduced SB 1234, a bill to legislatively enact the California Secure Choice Retirement Savings Trust Act, the final step required by the original legislation before the Program can be implemented. The bill was referred to the Senate Committee on Public Employment and Retirement where a hearing was held on April 12, 2016 and the legislation passed the Committee. SB 1234 was subsequently referred to the Senate Standing Committee on Appropriations where, on May 27, 2016, the bill was approved by a vote of 5-2. The bill was subsequently sent to the Senate Floor, where on May 31st it was read a second time and amended, and ordered to third reading. On June 2, 2016, the bill passed the Senate by a vote of 25-13 and was sent to the Assembly, where it was read a first time and held at the Desk.
After consideration by the Committees of jurisdiction, the amended bill passed the Assembly on August 25 and was returned to the Senate. The Senate concurred in the amendments and passed the bill by a vote of 27-12 on August 31, 2016. The bill was enrolled and presented to the Governor on September 9, 2016.
SB 1234 requires all employers within California with five or more employees who do not offer their employees another retirement savings option to participate in the California Secure Choice Retirement Program. The requirement is phased-in over a three-year period based on the employer’s size. Beginning 3 months after the opening of enrollment, employers of 100 or more employees must have an arrangement to allow employees to participate in the plan. Beginning 6 months after enrollment opens, employers of 50 or more employees must participate, and beginning 9 months after enrollment, the size of employer covered by the mandate drops to those with 5 or more employees.
Employees will be automatically enrolled in the program, with the opportunity to opt-out. If an employee does not select a contribution amount, 3 percent of salary will be contributed to their Secure Choice account. The Board has the authority to change the default contribution from 2 percent of salary to 5 percent. Employee contributions will be subject to automatic escalation of up to 8 percent of salary, with no more than 1 percent of salary increases per year. Employees have the opportunity to opt-out of automatic escalation and to select their own escalation percentage.
Employers will be allowed to make contributions to the accounts on behalf of their employees but only if these contributions are permitted by the Internal Revenue Code and do not subject the Secure Choice Program to the Employee Retirement Income Security Act. The Board is to evaluate and establish a process by which an employee of a non-participating employer might participate in the Program.
For up to the first three years of the Program, contributions will be invested in United States Treasury bonds or similarly safe investments. During this time, the Board will develop other options that appropriately balance risk and shall strive to minimize participant fees. During start-up and for the first year of operation, administrative funds will be appropriated from the state’s General Fund. These amounts are to be repaid, with interest, and subsequent costs will be paid from the Program’s administrative account. Administrative expenditures for the program are limited to 1 percent of the program fund. The remaining provisions of the legislation closely track the recommendations of the Secure Choice Board.
The California Security Choice Retirement Program was signed into law by Governor Jerry Brown on September 29, 2016 and went go into effect on January 1, 2017.
On February 19, 2015, HB 1235 was introduced by Representatives Brittany Pettersen and John Buckner, and State Senators Pat Steadman and Nancy Todd. The bill would establish the Colorado Retirement Security Task Force to research, assess, and report on the factors that affect the retirement security of the citizens of Colorado. The Task Force would also make recommendations on the feasibility of creating a retirement savings plan for private-sector employees who do not otherwise have a retirement plan available through their employers.
The bill was assigned to the House Committee on Business Affairs and Labor, and, on March 24, 2015, it was amended and referred to the Appropriations Committee. This committee reported the bill to the House in April, where it was passed on April 20, 2015. The bill was introduced in the Colorado Senate on April 24 and assigned to the State, Veterans and Military Affairs Committee. On April 29, 2015, the Senate Committee recommended no further action be taken.
On June 2, 2015, Governor Dannel Malloy signed into law Connecticut’s budget implementer bill for 2016, a bill which incorporated Public Act 16-29, an act creating the Connecticut Retirement Security Exchange. Public Act 16-29 was originally House Substitute Bill 5591, which passed the Connecticut House on April 26, 2016 by a vote of 76-63, and passed the Senate on April 30, 2016 by a tie vote of 18-18 when the tie was broken by the vote of Lieutenant Governor Nancy Wyman. The original bill had been sent to the Governor on May 13, 2016 and was subsequently incorporated into the budget implementer legislation.
The Connecticut Retirement Security Exchange requires covered employers to automatically enroll their employees into a Roth-IRA arrangement. Covered employers are private employers with five or more employees who received at least $5000 in wages during the previous year, who have been in business for at least one year and who do not offer a qualified retirement plan. Employers with fewer than five employees may participate in the Program voluntarily but their employees are not required to enroll in the Exchange.
Beginning on January 1, 2017, employees working for covered employers are required to be auto-enrolled into the new Exchange, which will meet the federal requirements for a Roth IRA. Eligible employees must have worked for the covered employer for 120 days, be over age 19, and not be members of an exempt category. Employees may contribute up to the federal limits for a Roth IRA. Employees who do not wish to participate in the Exchange may select a contribution amount of zero, and those who do not select a contribution amount will have a default amount of three percent of their salary contributed to their accounts. No employer contributions into the accounts are permitted.
Employees can select among a range of age-appropriate target funds for their contributions, and the funds will be offered by a variety of vendors. Employee contributions must be deposited within ten days of the payroll date in which the contributions are deducted. Once employees reach Normal Retirement Age, one-half of their account balances will be transferred to a lifetime income investment.
The Exchange will be administered by the Connecticut Retirement Security Authority, which is directed by a Board made up of 15 members appointed to six year terms. Board members must act in the sole interest of participants and beneficiaries, and for the exclusive purpose of providing benefits and paying administrative expenses. They may not vote on issues in which they have a direct financial interest. The Board may require vendors to meet the same criteria to the extent reasonable and practicable.
Vendors participating in the Program may include federally regulated retirement sponsors, including investment companies, insurance companies and others. Vendors may not include individual brokers, financial planners or agents.
The Board will establish criteria and procedures for approving vendors to participate in the Exchange, and is required to establish a cap on annual fees that can be charged by the vendors. After the fourth year of the program, fees will be capped at three-quarters of a percent of the investment amount. The Board also has the authority to make any modifications to the Exchange required to maintain federal tax deductibility and to avoid application of the Employee Retirement Income Security Act (ERISA). The Board is authorized to establish procedures for providing investment and plan information to participants and beneficiaries and to establish a process for receiving complaints. The Board shall establish and operate a website for approved vendors.
The Board shall also conduct a study of the interest in establishing a non-Roth IRA investment option, and may conduct a study of the feasibility of offering a multi-employer or 401k plan or other tax-deferred vehicle.
On December 3, 2014, the Illinois General Assembly passed SB 2758, an Act creating the Illinois Secure Choice Savings Program, which was introduced by Senator Daniel Biss. The bill was signed into law by Governor Pat Quinn on January 4, 2015. Read our summary of the law.
The Illinois Secure Choice Savings Board held meetings in August, November and December 2015 and its Investment Subcommittee held a meeting on December 9, 2015. The Office of the State Treasurer issued requests for proposals for an External Investment Advisor and for an ERISA Counsel in the fall of 2015. Meetings of the Board are expected to continue in 2016.
SB 2758 establishes a payroll-deduction IRA for workers whose employers do not offer any other retirement savings vehicle. The bill requires all businesses in existence for at least two years with 25 or more employees to automatically enroll their employees in the Secure Choice Savings Program unless they offer another retirement option to their workers.
Employees can determine a contribution level and select among a small number of investment options. A default contribution level of three percent of salary is offered to those who do not select one on their own, as is a default life-cycle investment fund for those who do not choose one from the options offered. Assets are pooled into a single fund and managed by the Illinois Treasurer and a qualified board, providing participants the benefit of low fees and competitive investment performance.Employees can choose to opt out of the program at any time.
The law is to be implemented within 24 months unless enough funds are not made available for the project. The Board must also find that the program is self-sustaining, that it is eligible for favorable federal tax treatment, and that it is not subject to the Employee Retirement Income Security Act of 1974 (ERISA).
On January 13, 2015, HB 1279 was introduced by Representative Matthew Lehman and a companion bill, SB 555 was introduced by Senator Greg Walker into the Senate on January 20, 2015. The bills would create the Hoosier Employee Retirement Option (HERO) plan, which are portable IRAs for employees who do not have access to a retirement plan through their employers. Employers with at least one employee and self-employed individuals would be eligible to participate, and participation by either the employer or the employees would be voluntary. Contributions to the accounts would be in post-tax dollars, and contribution amounts would be selected by the employee. If no selection is made, the default contribution rate is set at 3 percent of salary. Employers are not permitted to make any contributions into the accounts, including matching contributions.
The legislation would establish a board to design and implement the HERO program. The board is required to include at least one target-date fund and seven other diversified investment funds as investment options, and to establish a default fund if the employee fails to make a choice. Investment options must also include low-fee funds. Neither the state nor employers are liable for any investment performance.
The House bill was referred to the House Employment, Labor and Pensions Committee, and the Senate bill to the Committee on Pensions and Labor. No action has been taken on either bill.
On February 16, 2016, SSB 3164 was introduced into the Iowa Senate by State Treasurer Michael Fitzgerald, and a companion bill, HF 2417, was introduced into the House on February 16, 2016 by Representative Bruce Hunter (D-34) and others. This bill creates the Iowa Retirement Savings Plan Trust under the Office of Treasurer of State for the purpose of helping Iowans save for retirement. The bill provides that the trust be operated so that, for federal tax purposes, it meets the requirements of a retirement plan as provided by the Internal Revenue Code. The state treasurer is the trustee of the trust and has numerous powers, as specified in the bill, for the purpose of carrying out the purpose of the trust, including entering into agreements with trust participants and employers, investing moneys in the trust, and entering into any agreements or contracts necessary to carry out the purposes of the trust. The bill provides that the state, the treasurer of state, and the trust may not guarantee any rate of return on any contributions to the trust and are not liable for any loss incurred by any person as a result of participating in the trust. The bill requires the treasurer to submit an annual audited financial report on the operations of the trust. The bill provides an appropriation to the treasurer of state for FY 2016-2017 for the purposes of establishing and managing the Iowa retirement savings plan trust.
The bill provides that when the requirements of the bill are enacted, the treasurer shall not allow individuals to make contributions to the trust earlier than July 1, 2018. The bill provides that the it will go into effect no earlier than July 1, 2017, and only on the date the treasurer of state notifies the Code editor, in writing, that no less than $1.5 million has been appropriated to the treasurer of state for the purpose of the bill and that establishing an Iowa retirement savings plan trust is feasible, and applicable federal requirements make establishing the trust favorable for Iowans contributing to the trust.
SSB 3164 was referred to a Senate Ways and Means Subcommittee chaired by Senator Janet Petersen (D-18) on February 22, 2016 and a meeting was held on the bill on February 29, 2016. HF 2417 was referred to the House Commerce Committee and no further action has been taken.
On February 3, 2015, HR 261 was introduced by a bi-partisan group of state legislators. The bill would establish the Kentucky Retirement Account Program, a state-sponsored retirement program for private sector workers. Employers with five or more employees would be required to participate, unless they receive a hardship exemption. Employers with fewer employees are allowed to participate on a voluntary basis.
The bill would create a governing board to design and implement the program, which would be established as an automatic enrollment payroll deduction Roth IRA program. The board would be required to implement the program within 24 months of enactment, unless insufficient funds are made available. The bill permits the board to seek an opinion as to the applicability and impact of ERISA.
On February 9, 2015, the bill was referred to the Agriculture and Small Business Committee, which held a hearing on the bill on February 25. No further action was taken on the bill prior to the end of the legislative session.
On March 10, 2014, SB 283 was introduced into the 2014 regular legislative session by Senator Troy E. Brown. The bill was referred to the Committee on Retirement, where it was considered on April 28, 2014. No further action has been taken.
The bill would establish the Louisiana Retirement Savings Plan, a state-sponsored retirement plan for private-sector workers who do not have access to a retirement plan through their employers. Churches and new businesses are permitted to participate on a voluntary basis.
The plan would be established as an automatic payroll-deduction IRA, though employees could opt out at any time. The plan provides for an automatic contribution rate of 3 percent of salary and permits employer contributions up to a maximum of $5,000 per year per employee. Assets would be pooled and professionally managed. Benefits would be payable in the form of an annuity, and would become available at the earliest at age 69 and the latest at age 72. Neither the state nor employers are liable for investment performance.
On March 5, 2015, LD 768 was introduced by Representative Diane Russell. This bill is modeled after California’s legislation and would create the Maine Secure Choice Retirement Savings Investment Board, which would administer the Maine Secure Choice Retirement Savings Program. The program would be a state-sponsored payroll-deduction IRA for workers who do not have access to a retirement plan through their employers. Employers with five or more employees are required to participate.
Employees could select their contribution rate into the accounts, though a three percent of salary contribution would be set for those who do not select their own rate. Employees could opt-out at any time.
Assets would be pooled and professionally managed, and a minimum rate of return would be guaranteed through private insurance. Neither the state nor employers would be subject to any liability for fund performance. The program would only be established if the Board finds that it will be self-sustaining, qualifies for favorable federal tax treatment, and is not subject to ERISA.
On March 9, 2015, the bill was referred to the Committee on Labor, Commerce, Research and Economic Development, where it was voted “ought not to pass” on April 14, 2015.
LD 1473 was introduced by Representative Diane Russell on April 30, 2013. It is also modeled after California’s SB 1234 and was not voted out of the House Appropriations and Financial Affairs Committee on January 23, 2014. No further action has been taken.
On May 10, 2016, Governor Lawrence Hogan signed into law HB 1378, a law establishing the Maryland Small Business Retirement Savings Program and Trust. HB 1378 was introduced by Delegate William Frick , and its counterpart SB 1007 was introduced by Senator Douglas J. J. Peters. The new law went into effect on July 1, 2016.
As signed into law, HB 1378 establishes a retirement savings program for employees working for companies who do not offer another qualified retirement program. The law creates an 11 member Board (with a four-year term) and gives it the authority to design the new retirement program.
The Board is required to establish a process for automatically enrolling employees, establishing default contribution amounts and investment options, a process for employees to opt-out of the program and to opt back in, a process to select approved vendors and to operate the program so that administrative expenses are minimized. Expenses are capped at 0.5 percent of funds under management. The Board is authorized to borrow money to establish the program until such time as it generates enough fees to be self-sustaining. The Board is also tasked with establishing a process by which employees of non-participating employers may participate in the Program if their employer does not offer another retirement option.
The Board is directed to select a broad range of investment options and vendors, and may include an option that provides lifetime income.
In March 2012, Massachusetts enacted HR 3754, an Act Providing Retirement Options for Nonprofit Organizations. The new law allows the State Treasurer to sponsor a retirement savings plan for workers at small non-profit organizations in the Commonwealth. Participation by the organizations is voluntary. The retirement plan would be a tax-qualified defined contribution arrangement with various investment options available to employees. Contributions could be made by workers, their employers, or both.
Features of the plan currently include an automatic six percent payroll deduction with an option for the employer to opt for a four percent initial automatic contribution with an escalation of up to 10 percent. Hardship withdrawals will be allowed but specific guidelines for the withdrawals are not yet finalized. A “not-for-profit defined contribution committee” of five members would be established to assist the State Treasurer in developing policy and providing technical advice for the plan. The plan would be marketed particularly to nonprofits with 20 or fewer employees.
The plan will fall under the jurisdiction of ERISA. In June, 2014, the IRS ruled favorably on the proposal and is in the process of reviewing the group trust that the accounts will be pooled with for investment efficiencies. The Massachusetts Treasurer’s Office will formally roll out the plan once the IRS work is completed.
Also, on January 20, 2015, H. 939 was introduced by Representative Angelo Scaccia and referred to the Joint Committee on Financial Services. A joint hearing on H. 939 and H. 924 was held on November 23, 2015.
The bill would establish the Massachusetts Secure Choice Savings Program and is modeled after the Illinois retirement legislation. H. 939 would establish a payroll-deduction IRA for workers whose employers do not offer any other retirement savings vehicle in the workplace. The bill requires all businesses in existence at least two years with 25 or more employees to automatically enroll their employees in the Security Choice Savings Program, unless they offer another retirement option to their workers.
Employees can determine a contribution level and select among a small number of investment options. A default contribution level of three percent of salary is offered to those who do not select one on their own, as is a default life-cycle investment fund for those who do not choose one from the options offered. Assets are pooled into a single fund and managed by the Massachusetts Treasurer and a qualified board, providing participants the benefit of low fees and competitive investment performance.Employees can choose to opt out of the program at any time.
The law is to be implemented within 24 months unless enough funds are not made available for the project. The Board must also find that the program is self-sustaining, that it is eligible for favorable federal tax treatment, and that it is not subject to ERISA.
In addition, on January 20, 2015, H. 924 was introduced by Representative James J. O’Day and referred to the Joint Committee on Financial Services. No further action has been taken on the bill.
H. 924 would establish a Secure Choice Retirement Savings Board to administer two retirement savings trust funds known collectively as the Secure Choice Retirement Savings Trusts. The first of these trusts, named the Secure Choice Multiple-Employer Retirement Trust (MERP), is a profit-sharing defined contribution plan offering individual accounts. The second trust, the Secure Choice Individual Retirement Account Trust (IRAP), would accept individual contributions through payroll deduction and direct payment into IRAs. Assets would be pooled and professionally managed and neither the state nor the employer would be responsible for any liabilities. The Board and Plan administrator shall act as fiduciaries under ERISA for the MERP plan. Employers shall not be considered fiduciaries.
Participation by employers with 10 or more employees is mandatory unless they offer their employees another retirement savings plan. Self-employed individuals and employers with fewer than 10 employees may participate on a voluntary basis. Unless otherwise specified by the employer or directed by the employee, a default contribution of three percent of the employee’s annual salary shall be made to the plan. The board may adjust this default contribution from two to five percent and may vary that amount according to the length of time the employee has contributed to the program.
Benefits to participants in the MERP shall be paid in the form of lifetime annuities. Employees who participate in both the MERP and IRAP have the option of rolling over all or part of their IRAP into their MERP before it is converted into a lifetime annuity. Participants in the MERP have the option of taking up to $20,000 (as long as it is no more than 50 percent of their account balance) in the form of a lump sum.
On February 27, 2014, HF 2419 was introduced by Rep. Patti Fritz and others, and was referred to the Government Operations Committee. Over the following month, the bill was considered by the Commerce and Consumer Protection Finance and Policy Committee, State Government Finance and Veterans Affairs, and the Ways and Means Committee. The bill was subsequently incorporated into HF 2536, the Women’s Economic Security Act, which was considered and reported out of the House on May 7, 2014, and the Senate on May 9, 2014. The bill was signed into law by the Governor on May 11, 2014.
As enacted, the bill required the Commissioner of Management and Budget of the state to provide a report to the legislature by January 15, 2015, evaluating the potential for a state-administered retirement savings plan for workers who do not have access to a retirement plan though their employer. The potential state-administered plan would have to provide for individuals to make contributions to their own accounts which would be pooled and invested by the State Board of Investment. The state would have no liability for investment earnings and losses. The plan should be designed so employers would be discouraged from dropping existing retirement plan options. /p>
The report was required to include a number of items, including estimates of the numbers of Minnesota workers who could be served by the plan, the participation rate that would make the plan self-sustaining, the effect of federal tax laws and ERISA, and the potential use and availability of investment strategies and insurance against loss to limit or eliminate potential state liability and manage risk to the principal. Funds were appropriated to cover the cost of producing the report, and, in December 2014, the Minnesota Management and Budget Commissioner issued a Request for Proposals (RFP) to conduct the report. Under the terms of the RFP, the report is to identify at least one option for a state administered retirement savings plan for private sector employees, though it may include other options. Each option is to be fully explained, and include an implementation plan with start-up costs, and outline the pros and cons of each option. A final report has not yet been released.
NebraskaOn December 10, 2013, the Retirement Systems Committee of the Nebraska Legislature held a hearing to discuss LR 344, a resolution calling for an interim study to examine the availability and adequacy of retirement savings for Nebraska’s private-sector workers. The hearing was hosted by Committee Chair Senator Jeremy Nordquist.No further legislative action has been scheduled.
On January 8, 2015, HB 239 was introduced by Representative David Danielson. The bill would establish the Statutory Commission on Retirement Security to study the creation of a state-sponsored program for workers without access to a retirement plan through their employers. The commission would study a program that would provide for automatic enrollment into a payroll-deduction account, with an option for employees to opt out of the program. No employer contributions would be required. The accounts would be portable, and self-sustaining, and the assets would be pooled and professionally managed. The commission would be required to submit its report by November 1, 2015, and an appropriation of $100,000 would be authorized to support the commission.
HB 239 was voted on in the House on February 11, 2015, and the bill failed to advance.
On March 2, 2015, A 4275 was introduced by Assemblymen Vincent Prieto and others, and was referred to the Assembly Labor Committee on March 9, 2015. On June 18, 2015, the bill was reported out of the Labor Committee with amendments, and was referred to the Assembly Appropriations Committee. The bill was reported out of the Assembly Committee with amendments after a second reading on November 9, 2015 and was passed by the Assembly on December 3, 2015. On December 7, 2015, the bill was referred to the Senate Budget and Appropriations Committee.
A companion bill, S2831, was introduced by Senator Stephen M. Sweeney on March 16, 2015, and referred to the Senate Labor Committee. On October 19, 2015, S2831 was reported from the Senate Committee with amendments after a second reading and was referred to the Senate Budget and Appropriations Committee where it was reported out on December 21, 2015. On January 7, 2016, the Senate substituted House bill A4275 for the text of S2831 and passed the bill.
The bill was sent to Governor Chris Christie for consideration and was conditionally vetoed by the Governor, who proposed replacing it with the New Jersey Small Business Retirement Marketplace Act. The legislature replaced the text of the original bill with the Governor’s proposal and enacted the amended bill on January 11, 2016. The bill took effect immediately upon enactment.
Bill A4275 is modeled after the Washington State Small Business Marketplace Retirement Savings Bill and creates a virtual marketplace for small businesses in New Jersey to shop for private retirement plans for their employees. The new portal will be available to businesses with up to 100 employees and is voluntary for both employers and their workers.
The State Treasurer is tasked with designing and implementing a plan for the operation of the new Marketplace, and will contract with private sector entities who will establish a protocol for approving participating financial firms, design and operate a website through which employers may select plans, and develop marketing and educational materials. The private-sector entities shall ensure that licensed professionals who assist their clients to enroll in a plan will receive routine, market-based commissions or other compensation for their services.
The Treasurer shall ensure that the range of investment options offered by the firms is sufficient to meet the needs of savers with various levels of risk tolerance and various ages. The diverse array of private options available are to include life insurance plans that are designed for retirement purposes, and at least two types of plans that include a SIMPLE IRA type plan that provides for employer contributions to participating enrollee accounts and a payroll deduction IRA type plan in which the employer does not make contributions for enrollees.
The financial services firms participating in the Marketplace are to offer a minimum of two product options including a target date or similar fund and a balanced fund. The Marketplace shall also offer a myRA option in addition to any other approved plan. The Marketplace will not operate unless there are at least two financial services firms participating, but there is no limit to the total number of firms that can offer products.
The financial firms participating in the Marketplace shall not charge participating employers fees and shall not charge employees more than 100 basis points in total annual fees. The costs of operating the marketplace may be charged to participating financial firms, private funding sources or federal grants. If sufficient funds are raised, the Treasurer may offer incentive payments to participating employers. The Treasurer shall not expose the State to any liability under the Employee Retirement Income Security Act of 1974 (ERISA).
The bill that was vetoed by the Governor would have created the New Jersey Secure Choice Savings Program, modeled after the Illinois Secure Choice Retirement Savings Program. It would have required all businesses with 25 or more employees to automatically enroll their employees in the Secure Choice Savings Program unless they offered another retirement option to their workers. Employees could determine a contribution level, select among a small number of investment options and opt out at any time. A default contribution level of three percent of salary would have been offered to those who did not select one on their own, in addition to a default life-cycle investment fund for those who did not choose one from the options offered. Assets would have been pooled into a single fund and managed by the New Jersey Treasurer and the Board, providing participants the benefit of low fees and competitive investment performance.
Employers who did not enroll eligible employees would have been subject to penalties unless they could show reasonable cause for the failure. They also would have been subject to penalties if they failed to timely deposit employee’s contributions. Investment returns were not guaranteed by the State, and employers were not fiduciaries over the program, bore no responsibility for administration, investment or investment performance of the program, and would not have been liable with respect to investment returns, program design or benefits paid to program participants.
On February 26, 2015, Int 0692-2015 was introduced by Public Advocate Letitia James in the New York City Council. The bill would create a private pension advisory board to study the feasibility of establishing a pension fund for private sector workers in New York City. The board would consist of 11 members who have expertise in pension funds and finance. The bill does not set a deadline for the board to issue its report, but provides for the board’s dissolution upon issuance of the report. On June 23, 2015 a meeting on the bill was held in the Committee on Civil Service and Labor.No further action has been taken on the bill.
On February 27, 2015, New York City Comptroller Scott Stringer announced the creation of a Retirement Security Study Group. The study group is tasked with designing up to three retirement savings options by the fall of 2015 for consideration by a retirement task force. The study group is fully funded through existing resources within the Comptroller’s office.
On April 2, 2015, HB 515 was introduced by Representatives Schaffer, Ross, Glazier and Pierce. The bill was referred to the House Committee on Rules where no further action was taken before the conclusion of the legislative session.
HB 515, the Work and Save Plan Study directs the State Treasurer to study the establishment of a voluntary “Work and Save Plan Study” retirement program aimed at increasing the retirement savings options for private sector workers whose employers do not provide retirement savings plans. Participation in this program would be entirely voluntary and benefits would be portable between employers. In conducting the study, the bill directs the Department to consider the recommendations for such a program that were made by AARP. The State Treasurer is directed to report its findings and recommendations to the 2015 General Assembly when it reconvenes in 2016.
On January 12, 2015, HB 1200 was introduced by Representative George Keiser. The bill was defeated in the House on February 10, 2015.
HR 1200 would have established the Save Toward a Retirement Today retirement savings program administered by the State Treasurer. Employers with no more than 100 workers who do not offer retirement plans to their employees would have been eligible to participate on a voluntary basis. Employees of qualifying employers who opt not to participate could have enrolled on an individual basis.
Contributions by employers were not required, and workers could select their own contribution amounts. Contributions would be tax deferred at both the state and federal levels. The state would not be held liable for investment performance. An appropriation of $100,000 would have been authorized to design and implement the program.
On October 2, 2013, SB 199 was introduced by Senator Eric KearneyThe bill was modeled after the California legislation and would establish the Ohio Secure Choice Retirement Savings Board, which would design and administer the Ohio Secure Choice Retirement Savings Program.
The program would be a state-sponsored payroll-deduction IRA for workers who do not have access to a retirement plan through their employers. Employers with five or more employees would be required to participate. Employees could select their contribution rate into the accounts, though a three percent of salary contribution would be set for those who do not select their own rate. Employees could opt-out at any time.
Assets would be pooled and professionally managed, and a minimum rate of return would be guaranteed through private insurance. Neither the state nor employers would be subject to any liability for fund performance. The program would be established only if the board finds that it will be self-sustaining, qualifies for favorable federal tax treatment, and is not subject to ERISA.
SB 199 was assigned to the Senate Finance Committee but did not advance during the 2013-2014 legislative session.
On July 7, 2013, Oregon’s state legislature passed HB 3436, which creates a task force to explore options for helping private-sector workers who lack access to a workplace retirement plan save for retirement. The bill was signed into law by Governor John Kitzhaber on August 1, 2013.
The task force issued its report on September 12, 2014. The report found that retirement security in the state had deteriorated since a similar report was issued in 1997. The task force recommended developing and making available a retirement savings plan to all Oregonians who do not have access to a plan through their employer.
The recommendations envision a plan with a minimum employer role, automatic enrollment for the employee (with the ability to opt out), payroll deduction, and automatic annual escalation of contributions (with opt-out). The plan would be part of an overall retirement security program directed by a state board aimed at increasing enrollment in retirement security accounts. The program should include market research, small-business outreach, research into incentives, seeking legal guidance, and efforts to increase financial literacy.
On February 10, 2015, HB 2960 and its counterpart SB 615 were introduced by Senators Beyer, Riley, Roblan, and Rosenbaum and Representatives Williamson and Read and others. Both bills were referred to Committees of jurisdiction in their respective houses, where hearings were held and the bills were amended. HB 2960 passed the Oregon House by a vote of 32-26 on June 10, 2015, and passed the state Senate on June 16, 2015, by a vote of 17-13. The legislation was signed into law by Governor Kate Brown on Julne 25. The Governor named an Executive Director of the Oregon Retirement Savings Program and the Oregon Retirement Savings Board began holding monthly meetings in November, 2015.
The Savings Board has continued monthly meetings in 2016 and has issued an RFP for Market Analysis, Program Design and Financial Feasibility Services with a due date of January 19, 2016. The Board has also developed a detailed implementation timeline for action through 2017 and has created a working group on plan design which meets regularly.
HB 2960/SB 615 would establish a seven-member Oregon Retirement Savings Board in the office of the State Treasurer to administer the Oregon Retirement Savings Plan. The board would develop a defined contribution retirement plan for Oregon workers that would be pooled and professionally managed. Employers who do not provide a retirement savings plan would be required to offer their employees the opportunity to contribute to the Oregon Retirement Savings Plan through payroll deduction. The plan must provide for automatic enrollment with a default contribution level, though workers must be given the option of opting-out of the plan. Account owners would have the ability to maintain the accounts regardless of their place of employment and could roll over funds to other retirement accounts.
Before the plan can be established, the board must conduct a legal and market analysis to assess the feasibility of the plan and the applicability of ERISA. The plan cannot be created if the Board determines it would be subject to ERISA. Otherwise, the bill requires contributions to begin no later than June 16, 2017.
Finally, the Board is required to report to the Legislative Assembly with the results of the market and legal analysis, potential cost to employers, timeline for implementation and other issues, including recommendations regarding ways to increase financial literacy, by December 31, 2016.
House Bill 6080 was introduced by Representatives Edwards, Blazejewski and others on April 15, 2015. The bill was referred to the House Committee on Labor and a hearing took place on April 30, 2015. The Committee recommended the bill be held for further study and no additional action has been taken.
House Bill 6080 would create an automatic enrollment payroll deduction IRA program for private sector workers that would be administered by the Department of Labor and Training (DLT).Employers who have been in business at least two years and have five or more employees would be required to participate in the program unless they receive a hardship waiver. Smaller employers may participate on a voluntary basis. The Department would be responsible for designing a program that would allow employees to opt out, select a contribution level and investment option, and terminate participation, and would facilitate education and outreach to employers and employees. The default contribution option would be set at three percent, unless the employee chooses a higher rate. Investment options would include a life-cycle fund or target date fund as the default options. Employers would not have fiduciary obligations related to this program, and neither employers nor the state are liable for any investment losses resulting from participation in the program.
Implementation would begin 24 months after enactment and employers would establish a payroll deposit retirement savings option within six months after implementation.
On January 30, 2015, joint resolution SJR 9 was introduced by Senator Todd Weiler and House Sponsor Jon Cox. The resolution passed the House on March 4, 2015 and was signed by the Senate President on March 9, 2015. It was sent to the office of the Lieutenant Governor for filing on March 18, 2015.
SJR 9 urges Utah’s small business workers and small business community to work with the state’s Legislature and its Treasurer to study and develop a model for saving for retirement through the workplace that is accessible to Utah’s workers. The community is further urged to consider legislation, if necessary, to put the plan into action.
On January 7, 2014, Senator Anthony Pollina introduced S 193, a bill creating an interim Public Retirement Plan Study Committee to evaluate the feasibility of establishing a public retirement plan. The Committee would also study whether private-sector employers of a certain size who do not offer an alternative retirement plan should be required to offer the public retirement plan through a voluntary payroll deduction that would be available to private-sector employees who are not covered by an alternative retirement plan.The findings and recommendations of the Committee were due on January 15, 2015, at which point the authority of the Committee would sunset.
The bill was referred to the Committee on Economic Development, Housing and General Affairs on January 7, 2014, and was favorably reported to the Committee on Appropriations on March 3, 2014.Key provisions of S 193 were enacted as part of the FY 2015 budget bill on May 10, 2015.
On June 9, 2014, the Governor signed into law H 885 (Act 0179), legislation providing appropriations for Vermont agencies. Included in the bill was an appropriation of $5,000 to conduct an interim study on the feasibility of establishing a public retirement plan.
The Public Retirement Plan Study Committee conducted two meetings between November 26, 2014 and January 14, 2015, and subsequently issued an interim report.Due to the limited timeframe provided to the committee, the report was only able to identify a list of guiding principles that the committee should use to provide a framework for its analysis and to recommend to the General Assembly that the mandate of the committee be extended for a year (to January 16, 2016) to allow it to complete a more comprehensive report. No further action has been taken.
On January 14, 2015, HB 1998 was introduced by Delegate Luke Torian. The bill passed the House unanimously on February 10, 2015 and passed the Senate unanimously on February 24, 2015. It was signed by the Governor on March 27, and will go into effect on July 1, 2015.
HB 1998 establishes a Virginia Retirement System working group directed to develop recommendations to encourage and facilitate savings for retirement. The working group will review current state and federal programs that encourage Virginia’s citizens to save for retirement by participating in retirement savings plans. The review will include an examination of retirement savings options for self-employed individuals, part-time workers, full-time workers whose employers do not offer a retirement savings plan, and groups with low rates of savings.
The working group will include representatives of the Virginia Department of Taxation, small business, the self-employed, the Virginia College Savings Plan, and other stakeholders. The working group is directed to report its findings to the Governor and the General Assembly by January 1, 2017. The findings may include recommendations for changes in legislation to achieve its goal of increasing retirement savings.
On February 4, 2015, SB 5826, the Washington State Small Business Marketplace Retirement Savings Bill, was introduced by Senators Mark Mullet and Don Benton and was assigned to the Senate Committee on Financial Institutions and Insurance. After public hearings and consideration in a number of Senate committees, an amended version of the bill passed the Senate on April 10, 2015. HB 2109, the House companion bill, was introduced on February 12, 2015, and was referred to the House Committee on Appropriations. The committee passed the bill and referred it to the Rules Committee, and it ultimately passed the House, as amended by the Senate, on April 22, 2015. The Governor signed the bill into law on May 18, 2015. The Department of Commerce in Washington issued a request for proposals in November, 2015 and established a Small Business Marketplace information page on the Department’s website. A draft rule governing the establishment of the Washington State Small Business Marketplace was published for public review and comment in December, 2015. A hearing on the draft rule has been scheduled for March 16, 2016 and the rule’s intended date of adoption is March 25, 2016.
The bill establishes a small-business retirement plan marketplace in the state Department of Commerce. The marketplace would promote participation in low-cost, low-burden retirement savings plans and educate small employers on plan availability. The director of the marketplace would work with the private sector to establish a program that connects eligible employers with qualifying plans. Participation in the marketplace is completely voluntary for both employers and employees, but only those who are self-employed, sole proprietors or employers with fewer than one hundred employees are eligible to participate.
The marketplace director must approve a diverse array of private retirement plan options, including life insurance plans that are designed for retirement purpose, and at least three types of plans: a SIMPLE IRA that allows for employer contributions into participating worker’s accounts, a payroll-deduction IRA that does not allow employer contributions, and the myRA, the retirement savings vehicle proposed by the Obama administration that is backed by Treasury bonds.
The financial services companies approved to participate in the marketplace must offer a minimum of two product options: a target-date or other similar fund which provides asset allocations and maturities designed to coincide with the expected date of retirement of the participant, and a balanced fund.
Plans offered through the marketplace must include the option to roll over contributions to different retirement accounts. Although these plans are subject to ERISA, Washington State is not exposed to ERISA liability.
The program designed by the director must:
- Establish a protocol for reviewing and approving the qualifications of private sector financial firms seeking to participate in the marketplace
- Design and operate an internet website that includes information describing how eligible employers can participate in the marketplace
- Develop marketing materials about the marketplace that can be distributed electronically, posted on various agency websites, and inserted in agency mailers
- Identify and promote existing federal and state tax credits and benefits for employers and employees that are related to encouraging retirement savings or participating in retirement plans, and
- Promote the benefits of retirement savings and financial literacy.
Finally, the bill authorizes the appropriation of $100,000 in 2015 and $50,000 in 2016-2018 for implementation of the legislation.
On March 6, 2015, SCR 58 was introduced by Senator Tom Takubo and referred to the Rules Committee. No further action was taken on the bill before the legislative session ended.
The Senate Concurrent Resolution would direct the Joint Committee on Government and Finance to study the need and feasibility of the state creating a cost-effective and portable group retirement savings program for small businesses and their workers. The study would include a comparison of the costs of establishing the program with currently available private sector financial and retirement security opportunities for small business (defined as businesses with 50 or fewer employees).
SCR 58 directed that the report by submitted to the regular session of the legislature in 2016 and include drafts of any legislation that would be needed to implement its recommendations. The funds to conduct the study would be taken from the Joint Committee’s normal appropriations.
WisconsinOn February 24, 2015, SB 45 was introduced by Senator Dave Hansen and others and was referred to the Committee on Labor and Government Reform. The Assembly companion bill, AB 70, was introduced on March 5, 2015 and was referred to the Committee on Financial Institutions. No further action has been taken on either bill.
The bills would establish the Wisconsin Private Retirement Security Board and require the board to design a Wisconsin private retirement security plan. The board is required to study the financial feasibility of such a plan and recommend a design structure that is most reasonable in light of the potential participant population and cost of the plan. The board is also required to hold a minimum of five public hearings within three months on the plan, at least one of which will be held in each of the geographic areas of the State. The board must design the plan so that it mirrors, to the extent possible, the Wisconsin Retirement System.
The board is required to submit its report 18 months after enactment of the legislation. The report is required to include an estimate of the cost of initial establishment and administration of the plan, an estimate of the amount of time necessary to make the plan viable, and a recommendation for any legislation that is necessary to implement the plan. The bill directs the Department of Employee Trust Funds to provide staff and other resources to assist the Board in performing its duties and submit an estimate for the supplemental funds that may be necessary to implement the plan.
Finally, the bill allows the board to charge participants reasonable fees to cover the costs of implementing and administering the plan.
Updated May 2016
What we are hearing here in Baltimore and MD are TALKING POINTS from global banking 1% terms like PAYGO. For those not knowing CHILE was one of the most far-right, authoritarian, militaristic, extreme wealth extreme poverty global banking 1% neo-liberalism installed several decades ago after brutal civil unrest and civil wars------yes, this is a far-right wing PENSION POLICY not meant to create retirement structures for our low-income---only meant to pretend workers were receiving more than they actually did.
We want to be sure US 99% of WE THE PEOPLE understand AARP is working for global banking private insurance and is not pro-seniors. Here we see AARP morphing from private MEDICARE ADVANTAGE health insurance to privatized 'public' pensions for impoverished workers.
'In addition to the below summaries, AARP’s Public Policy Institute has established a State Retirement Savings Resource Center'
So, Obama and Clinton neo-liberals created the myRA structure at the national level---these are the same structures at state level and all have a goal of ending SOCIAL SECURITY/MEDICARE TRUSTS to revert to these FAR-RIGHT WING pension structures.
PINOCHET AND HIS TEAM OF CHICAGO SCHOOL OF NEO-LIBERALISM ---BOYS.
'Pension reform of 1980-81
Pinochet in 1982.
On November 4, 1980, under the leadership of José Piñera, Secretary of Labor and Pensions under Augusto Pinochet with the collaboration of his team of Chicago Boys, the PAYGO pension system was changed to a capital funded system run by investment funds. José Piñera had the idea of privatizing the pension system for the first time when reading the book Capitalism and Freedom from Milton Friedman'
We see in this article CHILE"S PAYGO was a replacement of SOCIAL SECURITY ------and of course it was 401K tied to global banking. So, all of Baltimore's Maryland Assembly and city council members and 5% players are all promoting PAYGO---because it is raging global neo-liberal banking 1% more easily used as FODDER than our US public SOCIAL SECURITY AND MEDICARE.
When we ask our local farm team 5% players why they are promoting what was embraced by one of the most brutal, far-right, authoritarian, militaristic extreme wealth extreme poverty neo-liberal regimes----CHILE'S PINOCHET----we are told WE PLEDGED TO DO ANYTHING WE ARE TOLD.
How They Do It Elsewhere
By STEVEN GREENHOUSEMAY 14, 2013
THE United States can boast that it has the world’s best basketball players, fighter jets and country and western singers. But hardly anyone would ever boast that the United States has the world’s best retirement system.
Fifty-eight percent of American workers are not even in a pension or 401(k) plan. The Social Security system faces the threat of a huge shortfall. One-third of America’s retirees get at least 90 percent of their retirement income from Social Security, with annual benefits averaging a modest $15,000 for an individual. And just ask any participant in a 401(k) plan about the scary roller-coaster ride of the last six years.
Scores of other countries have elaborate retirement systems, and some of them avoid the biggest pitfalls of America’s retirement system.
In Australia, there is nearly universal participation among workers in a 401(k)-type retirement plan because of a government mandate. In the Netherlands, pension laws require that workers’ 401(k)-like plans be converted into lifetime annuities to ensure they do not spend down all their savings before they turn 75 or 80.
In Britain, the government has pressed retirement fund managers to keep administrative fees on many plans to less than half the average in the United States.
A new report ranking various countries’ retirement systems gives the United States a C, considerably worse than the A received by Denmark and the B-plus given to the Netherlands and Australia. The study, by the Mercer consulting firm and the Australian Center for Financial Services, weighs adequacy of benefits, breadth of coverage and other factors, and points to numerous weaknesses in the American system.
Those shortcomings include contribution rates too low to assure adequate retirements for middle-class Americans and many workers withdrawing large sums from their 401(k)’s before they retire.
The report also cites poverty-level retirement benefits for many low-income workers and pensions that fail to keep up with inflation. It also points to the common practice of retirees withdrawing large sums from their 401(k)’s soon after retiring, leaving many without an adequate income stream if they live past 80.
Lia van Wijk, 58, the chief financial officer at a policy research center in Amsterdam, praises the Dutch retirement system, which combines a Social Security-like fund with a nearly universal pension system to which employers contribute.
“It’s rather a good system,” she said, noting that she had at first worried that she would not have a large enough pension because she had once spent many years traveling abroad. But now she feels reassured, having steered additional money into her pension fund.
Ms. Van Wijk likes the Dutch system of converting workers’ pension reserves into an annuity upon retirement. “There are real advantages to taking an annuity,” she said.
She complained, however, that the Netherlands had increased its retirement age from 65 to 66 1/2. Fearing budget deficits and large unfunded retirement liabilities, the Netherlands has joined Britain, Italy, the United States and other countries in raising its retirement age, a move that increases contributions to the system while holding down outlays.
“The Dutch realize that there can be too much leakage,” said Peter Kiveron, director of the Holland Financial Center, a research group, insisting that the United States and other countries make it too easy for people to take large amounts out of their 401(k)’s long before they retire and as soon as they retire, causing people to run out of funds well before they turn 75 or 80. “The Dutch have learned their lessons and have a very rigid system.”
Even a cursory study of retirement systems abroad makes clear that many countries are far more willing than the United States to mandate painful steps by employers and workers.
Chile requires workers to contribute 10 percent of each paycheck to a 401(k)-type fund. In Australia, employers must contribute 9 percent of each worker’s salary into a retirement fund, and that contribution is set to rise to 12 percent in 2020. Australia’s politicians, conservative and liberal, concluded that the country’s version of social security was providing retirees with too paltry a basic retirement check.
In the United States, such moves would prompt many to denounce heavy-handed grabs of workers’ pay and expensive burdens on employers. But experts say it would be wise to study other nations’ systems for tips on strengthening America’s system.
John A. Turner, director of the Pension Policy Center in Washington, said some foreign features might not fit American culture, like mandated participation in the pension system as in Australia and Chile. He does not advocate such a mandate.
“We’re quite different from many other countries,” he said. “There’s an emphasis on individual freedoms and rights and responsibilities versus collectivism — although I admit we will never have high pension coverage without some form of mandate.”
“In the United States, collective is a four-letter word,” agreed Harry Smorenberg, head of a Netherlands-based consulting firm on pensions and founder of the World Pension Summit.
The United States does have some mandates, although they are often overlooked. Employers must pay 6.2 percent of each employee’s salary into Social Security, and every employee must also contribute that amount.
A second pillar of America’s retirement system — 401(k)’s — is voluntary, although some employers have embraced automatic enrollment for their employees while giving them the right to opt out. The third pillar is individual savings, including individual retirement accounts or I.R.A.’s. The Center for Retirement Research at Boston College warned that 53 percent of American households were at risk of not having enough to maintain their living standards in retirement.
Teresa Ghilarducci, a professor of economics at the New School, said America’s voluntary system was badly broken because nearly six out of 10 workers were not in pension or 401(k) plans. She favors an Australia-type mandate.
“We use our tax code far more than other countries to try to encourage socially beneficial behavior,” she said. “We’re spending hundreds of billions of dollars to incent people to save for retirement through 401(k)’s and I.R.A.’s. That costs us a huge amount of money without much effect on getting people to save for retirement.”
Other countries’ systems offer a variety of contrasts:
¶ In France, the retirement age is 60, rising to 62 in 2017. In Britain, it is 67, with some calling that callously high. (Americans born from 1943 to 1959 qualify for full retirement benefits at age 66, and those born in 1960 or later qualify at 67, although people can begin receiving reduced retirement benefits at age 62.)
¶ In Chile, when women give birth, the government makes a special bonus contribution into their 401(k)-type plan to compensate for the months away from their job when they would not be contributing to those plans.
¶ In Sweden, if the nation’s overall social security financing worsens from one year to the next, that country’s fiscal guardians — to prevent huge, unfunded liabilities — set a slightly lower annual retirement benefit for all who reach retirement age that year (remaining unchanged until they die). And if Sweden’s social security finances improve the following year, there is a recalculation, and those who reach retirement age the next year will receive slightly higher benefits throughout retirement.
¶ In Britain, when young workers first sign up for a 401(k)-type plan, the default option in the government’s main new savings plan has them investing mainly in bonds — while in the United States young workers are advised to invest mainly in stocks.
“In the U.K., they say first-time savers are very sensitive to losing money early on, so they put them in bond funds so they’ll have positive returns,” said David C. John, an economist at the AARP’s Public Policy Institute. “As time goes on, they’ll be moved more into equities.”
¶ In the Netherlands, if a company is deemed unable to finance its long-term pension obligations, the central bank can order reduced benefits for current and future retirees to help keep the company afloat. United States law bars companies from reducing pension benefits they have contractually agreed to.
“We took drastic action to get these plans back into a safety zone,” Mr. Smorenberg, the Dutch pension consultant, said.
¶ Singapore requires employees to contribute 20 percent of their pay and employers 16 percent toward a savings fund for retirement, health care and housing. The government guarantees a 2.5 annual return. Despite the high percentage contributed, many Singaporeans end up without enough money for retirement because they withdraw large sums to buy houses.
Despite such disparate strategies, many countries have similar worries. “Every country is worried about workers saving enough and about increasing longevity,” Professor Ghilarducci said. “Every country is worried about investing retirement funds correctly, and every country wants to minimize risks to the taxpayer so there aren’t large, unknown bills in the future.”
In 1986, when Australia’s social security program provided average retirement benefits of just one-third of preretirement pay, Parliament, pushed by labor unions, began requiring employers to contribute 3 percent of employee earnings into a 401(k)-like fund. When that still left many Australians near poverty in retirement, legislators increased the contribution to 9 percent.
Alan Matheson, 75, a retired social worker and minister who lives near Melbourne, said the Australian system had been good to him and his wife, Barbara, 69, a retired nurse. Both receive social security benefits while drawing from their retirement savings. “The system works well if you own a house,” he said. “But if you don’t own your own house or if you’re single, things will be more difficult for you.”
He said Australians backed the plan to raise retirement contributions to 9 percent and then 12 percent because “there’s a widespread acceptance by the population that with the aging of the population, the government is not going to be able to pay its Age Pension,” the Australian name for the social security system.
Australian workers have several investment options, including investment funds set up by companies and unions, and “retail” funds, much like mutual funds. Experts estimated that an Australian worker who contributes for 30 years into such a fund will have retirement income equal to 70 percent of preretirement pay — the percentage that many experts recommend.
“Before compulsion we found that most people didn’t save enough for retirement,” said Ian Silk, chief executive of AustralianSuper, a multi-employer pension fund. He called the mandate “the single most important feature of the Australian system.”
Dana M. Muir, a pension expert at the University of Michigan, opposes a compulsory plan like Australia’s, but she said the United States should borrow one aspect of the Australian system: no legal liability if a company makes imprudent decisions in setting up a 401(k)-type plan. The risk of legal liability, Professor Muir said, is a big reason many American businesses decide not to set up 401(k) plans — and a major reason the American participation rate is so low.
Although Australia’s plan is praised, experts say it has one major flaw. It does not provide an annuity option for most retirees, meaning many run the risk of emptying out their retirement fund long before they die.
In 2007, New Zealand created the world’s first nationwide, government-sponsored savings plan that automatically enrolls workers, while giving them the option not to participate.
The“KiwiSaver” plan — built alongside the basic social security-type system — gives employees the option of contributing 3, 4 or 8 percent of their pay, with employers required to contribute 3 percent. Workers choose which investment funds to put KiwiSaver money in, and those who do not choose are steered into six conservatively invested funds.
To encourage participation, the government provides a $1,000 tax-free “kick-start” contribution for each new participant upon enrollment, as well as a housing down payment of up to $5,000 after someone has participated in the program for three years.
The government determines investment offerings, but there are not dozens, as in the United States. “If you look at the U.S. experience,” said Mr. John of the AARP, “having tons of investment alternatives drives some people away from participating.”
Chile reformed its retirement system during the dictatorship of Gen. Augusto Pinochet. In 1981, he largely replaced the country’s traditional social security-type plan with a 401(k)-type plan for everyone who entered the work force from that year onward.
Under the plan, 10 percent of each employee’s salary was automatically deposited into a 401(k)-type retirement fund, with workers having a choice of investment options. Today more than 90 percent of Chilean workers are in the system, which resembles, but goes further than, the partial Social Security privatization that President George W. Bush pushed unsuccessfully.
Patricio Navia, a professor of political science at the Diego Portales University in Chile, said the system was effective in getting most Chileans to save significant amounts for retirement. But he said there were shortcomings. The number of major investment funds has shrunk to six, from 15, leaving limited competition that has resulted in high fees.
And those unemployed for long stretches or working in the informal economy often did not save enough for retirement, causing the government to adopt a supplementary system in 2008 to top up the retirement funds of low-income retirees.
Another problem: As many Chileans paid into their new 401(k)-type plans instead of social security, that strained the financing of the pay-as-you-go social security plan. “For the U.S., making such a transition would be extremely costly,” Professor Navia said. “You can’t meet all your obligations in the pay-as-you-go system without receiving the money from people who are still working.”
In Britain, the government long had a voluntary savings program to supplement its main social security system. But officials grew alarmed that just a third of Britain’s workers were participating, so it enacted a 401(k)-type program that all employers must participate in unless they already have pension plans.
Under the program, employers must enroll all their employees in a retirement plan, although workers can opt out. The employer contributes 3 percent of each worker’s pay, the worker contributes 4 percent and the government 1 percent. The goal is to raise the worker participation rate to at least 70 percent.
“So far the opt-out rate is low — that’s very encouraging,” said Jane Vass, director of public policy at Age UK, Britain’s version of the AARP.
Many participants are not even choosing from the array of investment options. “The research shows that many employees didn’t want a large amount of choice because that makes decisions more difficult,” Ms. Vass said. “So the vast bulk of people go for the default scheme,” often a target date fund.
Senator Tom Harkin, an Iowa Democrat, has proposed creating a mandatory retirement savings plan much like Britain’s, with modest contributions by employers and employees. But in a country with a distaste for government mandates, his proposal could face rough going.
Mr. John of AARP said the United States could borrow only so much from other countries’ ideas. “Each country’s retirement system reflects their culture, their identity and their history,” he said. “It would be a mistake to assume that because something works in country ‘X’ it will work in the United States".
'The Baltimore City Public Schools Construction and Revitalization Act of 2013 passed in the final days of the legislative session'.
We are not discussing this week----VOTING RIGHTS ACT----or PENSIONS made PAYGO-----what we are discussing this week in public policy is the DISAPPEARANCE of our 99% of WE THE PEOPLE's ability to opportunity and access what our public agencies are doing with revenue----with policy-----whether state or county. Remember, these same policies are MOVING FORWARD in all US states driven by US CITIES DEEMED FOREIGN ECONOMIC ZONES.
We shouted several years ago this same problem regarding the $1 BILLION SCHOOL BUILDING BOND here we see it is tied to one of those QUASI-GOVERNMENTAL AGENCIES----MARYLAND STADIUM AUTHORITY. Our organization asked to see who was tied as investors to these school bonds---we wanted to see the agreements being signed and were told----IT IS PROPRIETARY ---YOU CANNOT SEE THESE DEALS.
Of course we knew why---they are tied to global banking 1% investment firms and global corporations with the goal of enfolding what are PUBLIC K-12 into corporate campuses as corporate schools.
99% WE THE PEOPLE and our new 99% of immigrants citizens need to understand these are ILLEGAL POLICY STANCES-----no laws can be passed to create these proprietary/closed-door secrecy when tied to a PUBLIC AGENCY. It is the same as creating POLL TAXES/LITERACY TESTS to keep citizens from voting.
Baltimore 99% of citizens not only are being denied PUBLIC EDUCATION AND PUBLIC K-UNIVERSITY SCHOOLS----they are being tied to $1 billion in bond debt that will be soaked in fraud, corruption, cronyism as are all QUASI-GOVERNMENTAL AGENCIES. A US city or state cannot pass laws where the goal is known to be PROPRIETARY AND SECRETIVE actions within public agencies.
21st Century School Buildings Program
The Baltimore City Public Schools Construction and Revitalization Act of 2013 passed in the final days of the legislative session. It authorizes the City of Baltimore, Baltimore City Board of School Commissioners, Interagency Committee on School Construction, and MSA to collaborate on the Plan. The Act authorizes MSA to leverage $60 million dollars into bond money to support an estimated 26-28 school renovation and replacement projects. Construction has begun, and the program is on schedule to be substantially completed by 2021.
The Memorandum of Understanding, approved by the Maryland Board of Public Works October 16, 2013, outlines each party's roles and responsibilities in the multi-faceted project.
Through the collective efforts of Baltimore City Public Schools, the Maryland Stadium Authority, the City of Baltimore, and Maryland’s Interagency Committee on School Construction, the mission of the 21st Century School Buildings Plan is to:
- Build future-focused, adaptable, sustainable and high-quality schools that inspire learning and support the educational success of Baltimore City Public Schools students
- Design schools that allow for recreational opportunities for the community, combined with other cooperative uses and school partnership programs
- Manage the costs of school facility operations by closing under-utilized schools, opening new award-winning education programs and implementing improved facilities maintenance operations
- Execute a cost-effective and timely school design and construction program, integrating local hiring and student-based learning opportunities
- Be good stewards of Maryland taxpayer dollars and champions for education, economic development and neighborhood revitalization in the City of Baltimore
THE MARYLAND STADIUM AUTHORITY is that quasi-governmental agency we are told is allowed to be proprietary and secret because of PRIVATE PARTNERSHIPS. The article below states all these concerns----it is not a coincidence that BALTIMORE CITY PAPER was taken over shortly after this article by BALTIMORE SUN ---its hard drives with decades of old articles 'LOST' and now Baltimore City Paper is out of business----consolidated media in Baltimore only allowing PROPAGANDA AND MYTH-MAKING.
'The Baltimore school system's financial advisor is Public Resources Advisory Group (PRAG), a 28-year-old, New York-based company that prides itself on working exclusively for government entities so as to avoid conflicts of interest. PRAG, which also counts the Maryland Stadium Authority among its many clients, has consistently ranked among the top financial advisors in the country'.
As we said last week, these QUASI-AGENCY status were created just before ROBBER BARON few decades to allow this massive and systemic corruption of US government agencies -----MOVING FORWARD ROBBER BARON CLINTON/BUSH/OBAMA and killing any ability of 99% of WE THE PEOPLE to see what our local and state agencies are doing.
WE ARE DOING ALL THIS FOR THE KIDS------OH, REALLY??????
Oh, yeah MR 5% PLAYER ANDERSON------it is indeed INNOVATIVE as in GLOBAL BANKING COMPLEX FINANCIAL INSTRUMENT----
The Money Pit
Edward Ericson Jr. March 13, 2013 BALTIMORE CITY PAPER
The Feb. 26 rally on Lawyers Mall in Annapolis made the TV news. Del. Curtis "Curt" Anderson (D-Baltimore), Baltimore City Public Schools CEO Andres Alonso, and Mayor Stephanie Rawlings-Blake were among the officials making the case for guaranteed funding to rebuild the city's public schools.
"We've come up with an innovative way to try to raise money to build schools in Baltimore," Anderson said. "This is exactly what people in Annapolis have been telling us to do for years and years."
Andres Alonso told the crowd, "This is about you. This is about the kids. This is about the buildings they deserve-better buildings now."
"We will not take no for an answer," added Rawlings-Blake.
Viewers of WBAL's nightly news broadcast saw all this, and readers of The Baltimore Sun, The Daily Record, and Patch.com got much the same story. But the details of the city's audacious plan to replace or rebuild 136 public school buildings have garnered scant coverage during the nearly two years the plan has been in motion. And questions remain even as the legislature nears a decision on the matter.
The stakes are huge. For more than a decade Baltimore schools could hardly be mentioned without the prefix "crumbling." Studies of the system's facilities needs have estimated the price tag at between $2.4 billion and $2.8 billion.
That's as much as the whole city budget, or two to three years of the school system's operating budget. It's also 50 times the amount of money the school system typically gets for capital improvements in a typical year.
The plan on the table would obligate the state to hand over at least $32 million to the city's schools in each of the next 30 years as a "block grant." Combined with money raised from the city's controversial 5 cent bottle tax, plus several other sources, an estimated annual total of about $68 million would be amassed.
Those dollars would then be handed over to a nonprofit corporation which has not yet been chartered. That corporation, called the School Construction Authority, would then issue bonds, pledging the $68 million to pay them off.
The amount of bonds that could be raised this way: $1.1 billion.
Having a billion dollars available to renovate and build new city schools would be huge. In the words of the Jan. 8 report by the state Interagency Committee on School Construction (IAC), Baltimore City would be "implementing a construction program on a scale that is unprecedented in Maryland and would be one of the largest single-jurisdiction programs in the United States."
But here's the kicker: $1.1 billion is less than half of what the city says it actually needs. Within three years of receiving its unprecedented allotment of guaranteed state money, the Baltimore school system would again have to return to the legislature and other potential funders-this time with an even bigger funding request.
"It's a huge lift, technically-and in terms of the financial thinking. . . and in public education and in the political process," says Michael Sarbanes, executive director of the school system's Engagement Office.
The fact that this enormous, creative, risky push for school financing would deliver just 44 percent of the school system's minimum identified need is obvious to anyone who reads the school system's plan or the IAC report. But it has not been featured in the media coverage of the funding drive.
Nor have these other details:
1. The latest $2.4 billion school building estimate does not include more than $100 million in furniture and fixtures that would be needed.
2. Maintenance of existing buildings during the proposed 10-year new-school build-out is predicated on doubling the school system's bond cap from $100 million to $200 million. It is as yet unclear where the money to service those bonds would come from.
3. Given the 10-year build-out proposed, the 30-year payoff plan under discussion would actually be closer to 40 years.
"I'm not going to give you this as a definite," Sarbanes says when asked how long the total bond payback time would be. "But if the last [bond issue] is eight years out, then. . . the point about it is, this is a long-term commitment."
Sarbanes' reticence is understandable. City and school officials have said little publicly about these challenges. Instead, the focus of the school board, the school superintendent, and the consortium of nonprofits called TransForm Baltimore that has been driving this policy since 2011 has been on the city school stakeholders-parents, students, teachers, and administrators-themselves.
"We asked them what should be taken into account. They told us," says Sarbanes. "So that's what drove it."
This makes sense. Without presenting a united front, the city stands little chance of getting the state legislature to agree to the plan. With the school system's users on board, hundreds of children can be bused to the capital for photo ops; those who oppose the plan can be painted as anti-kid.
And the need is undeniable. The report released last June by Jacobs Project Management, the consultant hired by the city schools to assess the damage, tells a familiar story (familiar because it is the third or fourth comprehensive study of Baltimore school facilities undertaken in the past decade or so):
Nearly a quarter of the city's schools were built before 1946; 69 percent of the system's 182 schools are in "very poor" condition, according to an industry-standard assessment system. Fifty schools should be replaced or scrapped altogether.
When assessed in terms of "educational adequacy," the average city school received a grade of 55 out of 100. Fail.
More than one-third of the district's school space was found to be unused or underutilized. As the IAC review concludes, "In every assessment conducted, City School[s] did not compare favorably with other urban districts or any of the national averages."
As Alonso says, "This is for the kids." And it is.
Given the obvious need to close some schools, Sarbanes says Alonso has taken special care to develop the plan around the people who are here now: "One of the principles that went into the plan, with the guidance of the school board, was that if a community was going to be experiencing the closing of their school-and that's one of the most painful things that can happen, because schools have enormous emotional resonance-then those children would be among the first to experience a new school."
The school system's plan is detailed to the level of each student, and how far he or she would have to walk to school if the plan is implemented. It is a case study in the art of managing tens of thousands of diverse constituents into a broad consensus.
But the parents of city public schoolchildren, upwards of 90 percent of whom receive free or reduced-price lunches, are mostly not the people whose taxes will be tapped to pay for the plan. Those taxpayers live in the counties, where, according to the IAC report, another $12 billion or $13 billion in school building projects are awaiting funding.
Here's what the city is asking for right now:
The "block grant" concept is derived from annual capital improvement funds the state doles out to every jurisdiction each year as the budget allows. Over the past five years, the city's average has been less than $32 million. The legislation-HB 860 and SB 743-would lock in the city's take at $32 million, at least. That would give the buyers of any bonds backed by the grants the assurances they need that the bonds would be paid off.
But, as the IAC notes, the state budget fluctuates with the larger economy. Dedicating $32 million to Baltimore for the next three decades might cause a squeeze if there is another recession. "Within recent memory. . . the capital budget was set at $116.5 million in FY 2004 and at $125.9 million in FY 2005 as a result of severe State fiscal constraints. During those fiscal years, annual funding for even the largest jurisdictions was reduced to well below $15 million and State approvals of planning, which represent a commitment of future funding for approved projects, were also significantly curtailed."
Even the act of dedicating $32 million to Baltimore might cause bond rating agencies to lower the state's own bond rating, the report says.
That brings up the question: If Baltimore's needs are so great, why does the state not simply bond the construction directly? The answer goes to the heart of the city plan's creativity, which is more political than economic. "It doesn't require voter approval," said Frank Patinella, an advocate with the ACLU of Maryland Education Reform Project, which has led the charge for the plan. "It doesn't count against the debt limit."
In effect, the structure of the proposed financing system is designed to mask the size and effect of the borrowing, not from government bond raters but from the taxpayers who would foot the bill.
Besides the $32 million block grant, the city is counting on no less than $8 million annually from the bottle tax, plus its own general fund contribution of $15 million, which is also styled as a block grant. Gambling funds are included at $4 million, even though the casino in question is as yet unbuilt and the existing Hollywood casino in Perryville, citing market conditions, just won the right to reduce the number of slot machines by 23 percent. The final $7 million would come from an accounting change involving city retiree health benefits. The details of this are unclear in the documents City Paper has reviewed. Sarbanes was not able to explain it, except to say that the change will result in an additional $7 million in funding at first, and that will probably increase over time to $11 million.
As late as June of last year, the bottle tax and other city revenue were going to be combined to float a $300 million bond by the city itself to fund school construction. That plan, unveiled in November 2011 by Mayor Rawlings-Blake, was overtaken by the more ambitious-and four-times-more expensive-plan on the table today.
Under the current plan, $66 to $69 million a year would be handed over to the Construction Authority, an entity which does not yet exist. The authority-like the Stadium Authority-would be quasi-governmental, run by political appointees and accountable to the government via annual internal audits and a state legislative audit every six years.
The Authority would implement the school system's 10-year-plan, says Sarbanes, and school system officials would "act as an agent to the Authority." When disputes arise between what the school system wants and what the Authority's bosses think best, someone-it has not yet been decided who-would get to make the decision. "The details have to get worked out," Sarbanes says.
The Construction Authority is part of the system needed to remove these bonds from the state's balance sheet. It would also, in theory, remove direct control of billions of borrowed dollars from the school system itself, which has over decades developed a reputation for incompetence and corruption.
Between 2004 and 2008, 11 city school maintenance and facilities employees were criminally convicted in a corruption scheme that had operated since at least 1991. One contractor, Gilbert Sapperstein of Allstate Boiler Service, was sentenced to 18 months in prison for his part in a bribery and kickback scheme involving Rajiv Dixit, then-head of the school system's facilities maintenance program. Millions of dollars were stolen.
Sapperstein-a longtime vending machine operator and generous political donor-served only one month in prison. The heating and air conditioning systems AllState never fixed have all along been cited as evidence of underfunding and the need for hundreds of millions in repairs and upgrades.
Sarbanes prefers not to dwell on this history. "I don't have a 10-year perspective," he says, stressing the improvements to the city's facilities maintenance section that have been made in recent years. "They do good work and at a high quality. . . the big problem for years and years and years was that we didn't have a strategy that would address the real underlying problem, which was that the buildings were deteriorating."
In its 2006 audit of the city school system, the Office of Legislative Audits made "23 recommendations covering virtually every financial management area reviewed," according to that 109-page document's introduction. "The areas where more significant problems were identified included procurement, facilities, inventory control, transportation services and payroll/human resources," the audit said, adding that the city school system's "management must develop a plan and related strategies for addressing these audit issues, including mechanisms to monitor the progress of implementing corrective actions."
The next audit, released just six months ago, found "Competitive Procurement Policies Were Not Always Followed," continuing problems with procurement procedures on "two large contracts," overpayment for overtime and leave, missing computers, and said the district "Did Not Ensure Contractors Had Properly Completed Maintenance Projects Prior to Payment," among the 26 findings it reported.
And this: "A Long-Term Facilities Master Plan Was Not Prepared."
David G. Lever, executive director of the Interagency Committee on School Construction, says he is confident in the school system's abilities today. "As you know, the school system has improved very much in facilities management since 2005," he says in a phone interview. "With new management-particularly Mr. [J. Keith] Scroggins and his crew-we have seen a significant improvement in the way the facilities are managed."
Lever's confidence had better be well-placed. Under the proposal on the table now, Baltimore City Public Schools would increase its staff of building professionals from the current 14 to about 34. "An additional 5 FTE's [that's full-time employees] would work directly for the Authority," the IAC report says.
Even with all those extra bodies, Baltimore City's staff would number 10 fewer than that of the Montgomery County school system, which manages about $250 million worth of capital projects each year-$20 million less than Baltimore would be handling annually if its plan is approved.
Under the plan, then, Baltimore projects itself to be significantly more competent and efficient than Montgomery County.
"They don't have the breadth or the depth in the system yet," Lever acknowledges. "It will take some time to build up to that level."
Baltimore's plan is modeled on a school building frenzy undertaken last decade by Greenville, S.C., a county of 461,000 souls that in 1993 was blessed by the arrival of a $450 million BMW factory. Tire giant Michelin also expanded there after buying out rival BF Goodrich in 1989. And General Electric, the area's largest employer, builds turbines and aviation equipment there. The well-paying jobs have attracted thousands of young families and the county did not see how its school system could keep up with the demand.
In 1999 the Greenville school board developed a plan to take about $60 million and borrow about $800 million to build or renovate 86 schools in four years. The plan ended up taking about six years and finished 70 schools to serve its 70,000 students-at a cost of $1.06 billion. Despite the overruns, it has been touted as a huge success by the consultants involved -even though the state of South Carolina has, in the words of the IAC report, "modified the conditions for the further use of this method."
Greenville and Baltimore City could hardly have less in common. Greenville is 77 percent white; Baltimore City is 32 percent white. Greenville's household income is 7 percent above the state average; Baltimore City's is 45 percent below. Greenville is a growing county with an expanding industrial base (in 2012, Michelin announced it would build a new $750 million factory nearby); Baltimore is losing population and industrial jobs.
Where Greenville built its schools to keep up with demand, Baltimore wants to build its schools in order to create demand-the construction jobs standing in for the tire and car-making jobs Greenville has. "There would also be a significant impact on these neighborhoods where this construction is going on which will be very helpful to the goal of growing the city," Sarbanes says.
One thing Baltimore does have in common with Greenville is the desire to get around existing laws limiting debt. Greenville's bonding authority had been capped to 8 percent of its tax base by the South Carolina constitution. As one of the Greenville school board members wrote: "The constitutional debt limit does not apply because the nonprofit is an independent legal entity." The structure also sidestepped a law forbidding lease-purchase arrangements.
Brent Jeffcoat, then bond counsel to the Greenville school board, blessed the structure as "legal." Last summer, officials with TransForm Baltimore, the consortium of nonprofits that is nominally driving this process, flew Jeffcoat to Baltimore to solicit his advice. Jeffcoat is one of several consultants that the Baltimore is counting on to help structure the deal.
The Baltimore school system's financial advisor is Public Resources Advisory Group (PRAG), a 28-year-old, New York-based company that prides itself on working exclusively for government entities so as to avoid conflicts of interest. PRAG, which also counts the Maryland Stadium Authority among its many clients, has consistently ranked among the top financial advisors in the country.
In 2010, PRAG managed 172 municipal bond issues totaling over $42 billion.
Every deal PRAG structures is different, but the school bond concept bears similarity to a much smaller deal the company facilitated in 2006-right down to the concern about political fallout.
In 2006, as the facts of the 1990s utility deregulation fad came clear, Baltimore Gas and Electric demanded-and the Public Service Commission approved-a 72 percent rate increase. Collecting it all at once would have caused an electoral revolt, so government and utility officials called on PRAG founders William W. Cobbs and Wesley C. Hough to stamp their approval on some structured finance magic.
Testifying before the PSC, Cobbs and Hough's expertise allowed the PSC to approve the scheme in which BGE would issue the bonds through a shell corporation so as to "insulate the bond investor from the credit risk of the company."
In that deal, BGE "sold" its right to collect the huge rate increase to a new corporate entity-RSB BondCo LLC-which then took the ratepayers' money as collateral for long-term bonds it issued. BondCo then forked over the borrowed cash upfront to the utility.
This way, ratepayers had only to pay a 15 percent increase up front, and BGE still got its windfall. Bond investors got a steady stream of income, and Governor Martin O'Malley was able to claim that he reduced the impact of the unavoidable rate increase.
All this was done and all true, despite the fact that the scheme increased overall costs from about $600 million to more than $800 million, including $11 million paid in "bond issuance fees."
In 2012 Baltimore County called upon PRAG to bless a scheme to finance with bonds a projected $250 million pension shortfall by borrowing that sum at 4.25 to 4.5 percent interest and investing it elsewhere. This is supposedly going to save big money down the line, as the money raised earns a bigger return for years before it is disbursed to retirees.
It's rather like a homeowner taking out a second mortgage to play the stock market: It might get him a big boat or it might put him into foreclosure.
As Keith Dorsey, Baltimore County's director of budget and finance, writes on Baltimore County's website (with Cobbs as a co-author): "In the opinion of the County's financial advisor, Public Resources Advisory Group, based upon preliminary discussions with credit analysts, the POBs [pension obligation bonds] will not negatively impact the County's Triple AAA bond ratings although there has been no formal confirmation from the rating agencies."
PRAG has fewer than 50 people on staff and wears its white hat with pride. As the company boasts on its website: "We are not, and have never been, the subject of an investigation."
About the TransForm Baltimore plan, the first $1.1 billion round of funding still awaits a vote. Much is still to be determined-from the makeup of the proposed Construction Authority, to who makes the decisions when budget and philosophy clash, to the big question of where the second round of financing-at least $1.4 billion-would be found.
"We're gonna have to figure out where does the rest of the money come from," Sarbanes says. "But at that point, we're going to have more experience, we're going to have momentum, and we're going to have a proof that doing [it] this way is good for the kids and good for the city."
"Throughout the construction phase, we're going to see cost escalation," Frank Patinella acknowledges. "We don't know what the bond market is going to look like. But we know that if we wait, it is going to cost more."
"At this point, I would have to say that I don't have a full grasp of the details of how this would be financed," David Lever says. "Stage two is not completely clear to us either."
There are not many US citizens not understanding that when right wing states were made to eliminate laws blocking EQUAL OPPORTUNITY AND ACCESS to voting------these same states started creating crony, corrupt, and rigged election structures-----sadly, our 1% BLACK BOULE killing those 99% black voter rights with these same corruptions. That was followed by BUSH-DIEBOLD computer voting with BUILT-IN HACKING of US elections assuring only global banking ALT RIGHT ALT LEFT CLINTON/BUSH neo-liberals and neo-cons won elections. SOCIOPATHS are indeed hard to stop.
ACLU fighting for the same VOTING RIGHTS as back in 1960s knowing 99% of WE THE PEOPLE cannot even access or have the opportunity to BE CITIZENS. It does no good to vote in rigged, corrupted elections.
Every time we allow CORPORATIONS to come into our PUBLIC AGENCIES---and that is what DIEBOLD was-----a corporate control of US voting that was completely done by our local and state election agencies with paper ballots and citizens watching the entire process. Today after these few decades of election corruptions----our state and county election boards are filled with 5% players ready to continue these election frauds whether computer or paper ballots.
THE GORILLA-IN-THE-ROOM ISSUE ACROSS ALL PUBLIC POLICIES----IS THIS QUASI-GOVERNMENTAL PUBLIC PRIVATE STATUS OF ALL OUR STATE AND LOCAL GOVERNMENT AGENCIES. WHETHER RIGHT WING OR LEFT WING----IF A GROUP IS NOT FIGHTING AGAINST THESE STRUCTURES---THEY ARE 5% TO THE 1% GLOBAL BANKING PLAYERS.
If we have no access or opportunity to see what is happening in our US public agencies---no way to hold people accountable---we are NOT CITIZENS and elections have NO EMPOWERMENT.
Voting is the cornerstone of our democracy and the fundamental right upon which all our civil liberties rest. The ACLU works to protect and expand Americansʼ freedom to vote.
What's at StakeFollowing the 2016 election, the fight for voting rights remains as critical as ever. Politicians across the country continue to engage in voter suppression, efforts that include additional obstacles to registration, cutbacks on early voting, and strict voter identification requirements. Through litigation and advocacy, the ACLU is fighting back against attempts to curtail an essential right in our democracy, the right to vote.
In addition to this litigation, we are working with our affiliates to advocate for policies that make it easier for Americans to vote, such as the expansion of same-day and online voter registration.
Below we see when our US pension was staged for ROBBER BARON global banking 1% use as FODDER. Here again is that FAKE 5% religious leader--an OLD WORLD GLOBAL 1% KINGS AND QUEENS FREEMASON----Jimmy Carter. Carter era pushed those QUASI GOVERNMENTAL AGENCY structures at the same time he created the 401K structures that would be open to DEREGULATED BANKING fleecing.
Revenue Act of 1978.
The Act was passed by the 95th Congress and was signed into law by President Jimmy Carter on November 6, 1978'.
This is when corporations were allowed to DEFER contributions and our state and local government officials DEFERRED contributions keeping pensions systems current and fully-funded-----of course it was made to sound like a LEFT social progressive opportunity. So, US pensions became DEREGULATED and corporations and pols started defunding them and using them as GLOBAL BANKING 1% FODDER.
3. Deferred Compensation and Pension Plans
* Permits deferral of the lesser of $7500 or 33 1/3% for employees and independent contractors performing services for state or local government or tax-exempt rural electric cooperatives. Extends rules of deductibility to deferred payments for services of independent contractors; * Expands non-taxable aspects of "cafeteria" and deferred profit-sharing plans; * Raises deduction amount to $7500 or 15% for employer contributions to IRA's; * Special breaks for participants in defined benefit plans, and employees of tax-exempt charitable organizations and educational institutions.
Here we see today's media selling the idea that only a few million of citizens were losers in these global banking 1% pensions as FODDER innovative policies. We KNOW MOVING FORWARD there will be no 99% PENSIONS FOR YOU. As global investment firms tied to ponzi scheme global banking frauds hiding illegal investments try to make it appear those lower-income US citizens were the losers-----all 99% of US WE THE PEOPLE are losing those pensions and retirements because we have no ability to see what these investment firms are doing with these savings structures.
A historical accident?
It wasn't supposed to work out this way.
The 401(k) account came into being quietly, as a clause in the Revenue Act of 1978.
THE FAILURE OF CHOICE----OH, THAT IS THE PROBLEM!
For millions, 401(k) plans have fallen short
Kelley Holland | @KKelleyHolland
Published 7:02 AM ET Mon, 23 March 2015 Updated 7:27 AM ET Tue, 24 March 2015
You need to know this number: $18,433.
That's the median amount in a 401(k) savings account, according to a recent report by the Employee Benefit Research Institute. Almost 40 percent of employees have less than $10,000, even as the proportion of companies offering alternatives like defined benefit pensions continues to drop.
Older workers do tend to have more savings. At Vanguard, for example, the median for savers aged 55 to 64 in 2013 was $76,381. But even at that level, millions of workers nearing retirement are on track to leave the workforce with savings that do not even approach what they will need for health care, let alone daily living. Not surprisingly, retirement is now Americans' top financial worry, according to a recent Gallup poll.
To be sure, tax-advantaged 401(k) plans have provided a means for millions of retirement savers to build a nest egg. More than three-quarters of employers use such defined contribution plans as the main retirement income plan option for employees, and the vast majority of them offer matching contribution programs, which further enhance employees' ability to accumulate wealth.
But shifting the responsibility for growing retirement income from employers to individuals has proved problematic for many American workers, particularly in the face of wage stagnation and a lack of investment expertise. For them, the grand 401(k) experiment has been a failure.
"In America, when we had disability and defined benefit plans, you actually had an equality of retirement period. Now the rich can retire and workers have to work until they die," said Teresa Ghilarducci, a labor economist at the New School for Social Research who has proposed eliminating the tax breaks for 401(k)s and using the money saved to create government-run retirement plans.
A historical accident?It wasn't supposed to work out this way.
The 401(k) account came into being quietly, as a clause in the Revenue Act of 1978. The clause said employees could choose to defer some compensation until retirement, and they would not be taxed until that time. (Companies had long offered deferred compensation arrangements, but employers and the IRS had been going back and forth about their tax treatment.)
"401(k)s were never designed as the nation's primary retirement system," said Anthony Webb, a research economist at the Center for Retirement Research. "They came to be that as a historical accident."
History has it that a benefits consultant named Ted Benna realized the provision could be used as a retirement savings vehicle for all employees. In 1981, the IRS clarified that 401(k) plan participants could defer regular wages, not just bonuses, and the plans began to proliferate.
By 1985, there were 30,000 401(k) plans in existence, and 10 years later that figure topped 200,000. As of 2013, there were 638,000 plans in place with 89 million participants, according to the Investment Company Institute. And assets in defined contribution plans totaled $6.6 trillion as of the third quarter of 2014, $4.5 trillion of which was held in 401(k) plans.
"Nobody thought they were going to take over the world," said Daniel Halperin, a professor at Harvard Law School. who was a senior official at the Treasury Department when 401(k) accounts came into being.
Rise of defined contributions
But a funny thing happened as 401(k) plans began to multiply: defined benefit plans started disappearing. In 1985, the year there were 30,000 401(k) plans, defined benefit plans numbered 170,000, according to the Investment Company Institute. By 2005, there were just 41,000 defined benefit plans–and 417,000 401(k) plans.
The reasons for the shift are complex, but Ghilarducci argued that in the early years, "workers overvalued the promise of a 401(k)" and the prospect of amassing investment wealth, so they accepted the change. Meanwhile, companies found that providing a defined contribution, or DC, plan cost them less. (Ghilarducci studied 700 companies' plans over 17 years and found that when employers allocated a larger share of their pension expenditures to defined contribution plans, their overall spending on pension plans went down.)
But the new plans had two key differences. Participation in 401(k) plans is optional and, while pensions provided lifetime income, 401(k) plans offer no such certainty.
"I'm not saying defined benefit plans are flawless, but they certainly didn't put as much of the risk and responsibility on the individual," said Terrance Odean, a professor of finance at the University of California, Berkeley's Haas School of Business.
Early signs of troubleThat concept may not have been in the forefront of employees' minds at the start, but problems with 401(k)s surfaced early.
For one thing, employee participation in 401(k) plans never became anywhere near universal, despite aggressive marketing by investment firms and exhortations by employers and consumer associations to save more. A 2011 report by the Government Accountability Office found that "the percentage of workers participating in employer-sponsored plans has peaked at about 50 percent of the private sector workforce for most of the past two decades."
The employees who did participate tended to be better paid, since those people could defer income more easily. The GAO report found that most of the people contributing as much as they were allowed tended to have incomes of $126,000 or more.
In part, that is because the ascent of 401(k) plans came as college costs started their steep rise, hitting many employees in their prime earning years. Stagnating middle-class wages also made it hard for people to save.
Fees have been another problem. Webb has studied 401(k) fees, and he concluded that "as a result of high fees, fund balances in defined contribution plans are about 20 percent less than they need otherwise be."
The Department of Labor in 2012 established new rules requiring more disclosure of fees, but it faced strong industry opposition, including a 17-page comment from the Investment Company Institute.
Failure of choice
Most employees also turned out to be less than terrific investors, making mistakes like selling low and buying high or shying away from optimal asset classes at the wrong time.
Berkeley's Odean and others have studied the effect of investment choice on 401(k) savers, and found that when investors choose their asset class allocation, a retirement income shortfall is more likely. If they can also choose their stock investments, the odds of a shortfall rise further.
"401(k)'s changed two things: you could choose not to participate, and you chose your own investments, which a lot of people, I think, screw up," Halperin said.
Benna, who is often called the father of the 401(k), has argued that many plans offer far too many choices. " If I were starting over from scratch today with what we know, I'd blow up the existing structure and start over," he said in a 2013 interview.
Another problem is that when 401(k) savers retire, they often opt to take their savings in a lump sum and roll the money into IRAs, which may entail higher fees and expose them to conflicted investment advice. A recent report by the Council of Economic Advisors found that savers receiving such advice, which may be suitable for them but not optimal, see investment returns reduced by a full percentage point, on average. Overall, the report found that conflicted investment advice costs savers $17 billion every year.
The result of all these shortcomings?
Some 52 percent of American households were at risk of being unable to maintain their standard of living as of 2013, a figure barely changed from a year earlier—even though a strong bull market should have pushed savings higher and the government gives up billions in tax revenue to subsidize the plans.
In a hearing last September on retirement security, Sen. Ron Wyden, D-Ore., declared that "something is out of whack. The American taxpayer delivers $140 billion each year to subsidize retirement accounts, but still millions of Americans nearing retirement have little or nothing saved."
Retirement worries riseAs problems mount with 401(k)s, Americans' worries about retirement security are intensifying.
A 2014 Harris poll found that 74 percent of Americans were worried about having enough income in retirement, and in a survey published recently by the National Institute on Retirement Security, 86 percent of respondents agree that the country is facing a retirement crisis, with that opinion strongest among high earners.
Changes may come, but for now, 401(k) plans and their ilk remain Americans' predominant workplace retirement savings vehicle. They may be a historical accident, but for the millions of people now facing a potentially impoverished retirement, the fallout is grave indeed.
As a former Treasury official, Halperin witnessed the creation of 401(k) accounts, But, "on balance, I don't think it was a big plus" that the accounts were created, he said. "I don't take credit for it. I try to avoid the blame."