Ethical Issues in Pension Reform
After 2008,
public pensions faced many challenges.
Decisions had to be made to keep the pensions funded and many public
plans faced multiple areas of reform.
Changes were made to pension plans which had active members making
contributions to them. Either the amount
of these mandatory contributions was increased or the amount of time needed to
become vested was increased. Retirees
also faced changes to the amount of Cost of Living Adjustments (COLA) they
received and some even saw their benefits decrease. The legislators, directors, and boards that
made these decisions had to balance the health of the funds and the impact to
those enrolled in it. My paper will
focus primarily on the State of Illinois’ public pension and their reform. The many decisions made to try to improve the
status of the pension as well as the issues faced in making those
decisions. I will also mention ethical
issues that led to the need for reform.
I currently
work for the Public Employee Retirement System of Idaho (PERSI). We are still faced with implications of
decisions made during the 2008 reforms.
Luckily, we were able to limit the amount of reform needed to keep our
fund healthy. However, we were the
exception. Due to our ability to weather
the downturn we are looked at a lot more closely than we had been in the
past. What did we do to limit the
damage? What made us different? Will the PERSI fund be viewed in a negative
light because it did not require or go through major reforms? Through my research I learned more about
pension reform than I had prior to this project. Though my outlook is now more informed, my
research did not change my views.
The Law
Moore, H.
(2014). The Public Pension Reform Problem. The Elder Law Journal, 22(1),
249-249. Retrieved August 1, 2015, from LexisNexis Academic.
I found this
article at Bellevue University’s online library in the LexisNexis Academic
database. This article discusses public
pension plans and using the Illinois plan significantly for examples. This article details pension plans, what
issues caused the need for pension reform, and the issues currently being faced
trying to establish pension reform. This
article is useful because it discusses many decisions that need to be made to
reform public pensions and the difficulties surrounding those decisions.
Contracts
and Agreements
Monahan, A. (2012). Statutes as Contracts? The "California
Rule" and Its Impact on Public Pension Reform. Iowa Law Review, 97(4),
1029-1029. Retrieved August 1, 2015, from LexisNexis Academic.
I found this article at Bellevue University’s Online Library using the
Academic Search Premier database. The
primary focus of this article is whether or not pension plans created a
contract with their members and the issue that creates when trying to reform
the plan. I feel like this is
significant to my paper because it discusses the issues legislators face with
trying to balance reform with current contracts in place. The article discusses many different examples,
mainly based in California, that have created rules as to how much reform is
allowed.
Professional Codes of Ethics
I found this article at Bellevue University’s Online Library using the
ProQuest database. This article
describes a new code of conduct recently unveiled by the National Conference on
Public Employee Retirement Systems. These guidelines will be used by public
pension systems and their service providers.
There are 10 points to the code.
This would be beneficial to someone interested in the topic of my paper
because it is a current record that tries to help unify decisions during a time
when making those decisions have become more complex due to federal regulations.
Industry Standards
I found this
article at Bellevue University’s Online Library using the ProQuest
database. This article describes a new
standard for public pension plans that was issued by the Governmental
Accounting Standards Board (GASB). This
new standard changes the way all employers involved in a pension have to report
their net pension liability (NPL) on their financial statements. The article describes in details what will be
required of the pension plan, employers, and the employer’s auditors to make
sure this is completed accurately. This
article is important for my paper because it shows how standards are continuing
to be updated and working on showing more accurate funded levels to keep
records of funded statuses.
Social,
Civic, and Geographic Communities
I found this
article at Bellevue University’s Online Library using the ProQuest database.
This article details the geographic trends of pensions across the United
States. It also describes percentages of
all workers participating in a retirement plan versus those working for a union
or public employer that has a pension.
This data in this article is from 2001 which is slightly before the time
frame of my paper but this would be good information to use to compare
percentages before and after the recession in 2008.
Personal
Relationships
I found this
article at Bellevue University’s online library using the ProQuest
database. It was an article written in The Wall Street Journal. The article mainly discusses the issues with
the Illinois pension system. It
discusses the amount of unfunded liability, efforts made fix the problem,
however, I feel like the most important issue touched on is the cause for the
state’s problems. The article briefly
touches on that politicians are to blame due to the promises made during their
campaigns. This is important to my paper
because it touches on how personal relationships can affect decision making and
cause larger issues.
Moral and
Spiritual Values
Gradel, T.
J., & Simpson, D. (2014). Corrupt Illinois : Patronage, Cronyism, and
Criminality. Urbana, IL, USA: University of Illinois Press. Retrieved from http://www.ebrary.com
I retrieved
this book from Bellevue University’s e-brary.
While not all of the book is pertinent to my paper, it gives a good
background on some of the ethical issues that plagued Illinois for decades and that
may have hindered the public pension system.
The book also mentions multiple examples surrounding the Illinois
Pension and how politicians used it as leverage for bribes and kickbacks, as
well as for their own personal agenda.
Illinois
Reform Issue
This is an
article and video I found on a news station’s website. The article describes a decision made back in
2013 about pension reform that may have violated the state’s constitution. This is beneficial for my paper because it
shows a recent decision that was made in regards to a public pension that is
still facing scrutiny. Now Illinois
faces a decision that could bring them back to the drawing board. They thought they had found a “fix” to the
pension system but now it may not be so black and white.
Reform
Background
This is a
pamphlet I found online created by the American Legislative Exchange
Council. The pamphlet is designed for
legislators or decision makers for public pensions. It describes in detail the different types of
retirement plans available other than pensions.
It also describes problems that pensions have run into and examples of
decisions that may be needed to be made to improve the fund. This pamphlet is beneficial for my paper
because it goes through different types of reform and the decisions that must
be made to implement those reforms. It
is not limited to just one entity but covers all public pension plans.
Illinois
Pension Restructuring
I found this
article from the Illinois Law Review website.
This article solely focuses on the Illinois Public Pension system. It discusses the background on some of the
problems and what options are available to correct them. This article is important for my paper
because it goes through each issue that faces the Illinois pension system and
gives an analysis on how the problem can be fixed a long with the pros and cons
with each decision.
