Archives for category: Pensions

Democrat Andy Beshear, Attorney General of Kentucky, defeated hard-right Republican Governor Matt Bevin!

Hooray!

Bevin made war on public schools and teachers and threatened teachers’ pensions. He allied himself with Trump and Betsy DeVos. Bevin threatened to cut healthcare insurance. Teachers in Kentucky walked out and demonstrated at the state capitol to oppose Benin’s efforts to destroy their pension rights.

Trump visited Kentucky to help Bevin.

Bevin wanted to make the election a referendum on Trump’s impeachment proceedings. He wanted to distract voters from his agenda to privatize schools and shred the social safety net..

Bevin lost. He hasn’t conceded yet. But he lost.

Here is local news.

“After a hard-fought race marked by angry rhetoric about teachers and the intervention of national politics, Kentucky voters finally got the chance to make their decision at the ballot box.

“In the end, Attorney General Andy Beshear was able to emerge victorious in a gubernatorial race being watched as much for what it says next year’s national elections as it does about the direction of the commonwealth.

“Both men were with supporters in Louisville on Tuesday night watching as the results came in.

“The Democrats — Beshear and his running mate, Jacqueline Coleman — placed much of their focus on Kentucky’s educators and their anger over moves by the Bevin administration to make changes to their pensions.”I believe the more Kentuckians that come out, the better our chances are, because people are hungry for a governor that listens more than he talks and solves more problems than he creates,” Beshear said earlier Tuesday.

”Bevin, a Republican who has polled consistently as among the least popular governors in the nation, highlighted his anti-abortion rights agenda and close ties with President Donald Trump. He switched his lieutenant governor running mate this time out to Ralph Alvardo.”

Lesson in Kentucky: Don’t run against public schools!

PS: The Associated Press says the race is too close to call. CNN has declared Beshear the winner.
With 100% of the vote counted, Beshear is ahead by about 4,500 votes.

From the New York Times:

Next update in :02
Latest: The Associated Press says the race is too close to call.2m ago
Candidate Party Votes Pct.
Andy Beshear Democrat 711,955 49.2%
Matt Bevin* Republican 707,297 48.9
John Hicks Libertarian 28,475 2.0

1,447,727 votes, 100% reporting (3,659 of 3,659 precincts)

* Incumbent

The governor’s race in Kentucky has been cast as a showdown between an unpopular governor and an unpopular party. The Republican incumbent, Matt Bevin, has focused his campaign on his alignment with President Trump and his opposition to impeachment, with the president holding a rally on Monday in Lexington to reciprocate the support. The Democratic challenger, Andy Beshear, the state’s attorney general, has been buoyed by the governor’s diminished popularity — Mr. Bevin is among the least popular governors in the country. 

 

 

Remember that Trump likes to boast of his love for “clean, beautiful” coal.

Now Murray Energy is filing for bankruptcy and will shed $8 billion in pension and health-care liabilities owed to miners.

NPR reports that Murray was one of Trump’s biggest funders:

The Trump administration has spent three years trying to help the coal industry by rolling back environmental regulations and pushing for subsidies for coal-fired power plants. Still, the long list of coal company bankruptcies has continued, and dozens more plants have announced their retirement since President Trump took office.

Now the list of bankruptcies includes a company headed by one of Trump’s most vocal supporters. Murray Energy Corp. filed for Chapter 11 on Tuesday morning.

The company says it reached an agreement to restructure and continue operating. As part of that, Bob Murray — the chairman, president and CEO — will relinquish two of his roles. His nephew, Robert Moore, will become president and CEO while Murray will stay on as chairman.

“When you’re a private company and you’re in financial failure, the first person that loses everything is the owner. And that’s what will happen,” Murray tells NPR.

Murray has had a close relationship with the Trump administration. He donated $300,000 to Trump’s inauguration and has met with administration officials to advance the coal industry’s interests.

Dino Grandoni of the Washington Post writes:

Murray Energy Corp., the nation’s largest private coal giant, filed for Chapter 11 protection on Tuesday, Taylor Telford and I reported Tuesday. That move makes it the fifth coal company to land in bankruptcy court in 2019 as coal is being being squeezed out of the U.S. power market by cheaper options such as natural gas, solar and wind power.

The long-anticipated bankruptcy proceedings also put the United Mine Workers of America’s already fragile and underfunded pension plan on even shakier ground, The situation could potentially spur a divided Congress and Trump, who has championed coal workers, to bail out the miners. Currently, Murray Energy pays into the pension plan for UMWA, which represents a large chunk of the company’s full-time employees…

But it is underfunded also because other coal companies have shed their pension obligations through bankruptcy. Among the billions of dollars of debt Murray Energy wants to restructure — or get rid of entirely — are its contributions to the pension plan. Excluding one of its subsidies that is not part of the bankruptcy proceedings, Murray Energy with about $2.7 billion in funded debt, as well about $8 billion in actual or potential obligations to fund pension and benefit plans, according to court filings.

Robert Moore, the company’s new CEO, hinted in a court filing that Murray Energy may seek relief from its pension obligations.

“Murray’s employees are its lifeblood… Nonetheless, the cost of servicing its funded debt, together with the myriad of obligations Murray has to current and former employees, including to a pension fund that has been abandoned by other employers, have substantially reduced liquidity,” Moore wrote to the bankruptcy court. a court filing….

Manchin and some other senators, including Republicans Shelley Moore Capito (W.Va.) and Rob Portman (Ohio), have pushed for legislation that would transfer certain federal funds into the pension plan.

“We’re talking about 82,000 miners who are going to lose their pensions, and we’re fighting this,” Manchin, whose state is home to large Murray Energy operations, said in a radio interview on West Virginia MetroNews on Tuesday.

But the idea of the federal government bailing out the union miners has divided Senate Republicans. Other budget-minded senators from coal-mining states, such as Mike Enzi (R-Wyo.), have objected to using federal appropriations to bail out a private pension plan.

Standing in the middle of that divided Republican caucus is the most powerful coal-state senator of all: Senate Majority Leader Mitch McConnell (R-Ky.)

Manchin accuses McConnell of “still sitting on” his bill. McConnell met with UMWA members from Kentucky earlier this year and shares their concerns about the potential insolvency, according to McConnell spokesman Robert Steurer. While his office added that McConnell “supports the ongoing process to find a bipartisan solution for pension reform,” it did not commit to bringing any particular legislation to the floor.

Randi Weingarten, who is both president of the American Federation of Teachers and a veteran lawyer, describes the AFT’s efforts to save the pensions and benefits and dignity of teachers in Puerto Rico as the Island faced bankruptcy and predatory lenders.

Why do teachers’ pension funds invest in stocks of corporations that are actively undermining public schools and their teachers?

K12 Inc. manages a chain of online charter schools that are noted for low performance, high attrition rates, and low graduation rates. Their teachers never meet students. They have large classes, no union.

New York State Teachers Retirement System Makes New $100,000 Investment in K12 Inc. (NYSE:LRN)

 

Clifford Wallace and Leigh Wallace, a father-daughter team of professional educators, lambaste state officials for their relentless attacks on the state’s public school teachers. 

They begin:

Leadership matters. It has the potential to influence student outcomes. Clearly, there is a lack of leadership in Frankfort. Kentucky State Education Commissioner Wayne Lewis is taking pages from the flawed and unsuccessful playbooks of his neoliberal, pro-privatization counterparts in Louisiana, Indiana, Ohio, and Wisconsin. From no longer requiring master’s degrees for teachers to maintain certification to promoting privatized for profit “charter schools” as the panacea to save the “failing public schools” – our “commissioner” is helping dismantle our public schools – and the teaching profession – in Kentucky.

Lewis continues to disparage professionally prepared – and experienced – educators through diminishing the significance of the complex work they do on a daily basis, insulting their commitment and expertise, threatening their pensions, and cutting programs and budgets. Recently, in addition to painting a negative narrative around our public schools and the professionals that work in them, he proposed a “pay for performance” incentive for Kentucky Public School teachers as a means to motivate them to “work harder” and ensure every student has access to a “quality public school.” While this may sound promising on the surface – especially if you have not read the numerous studies conducted by scholars on this practice over the past 30+ years – it is a failed solution.

Lewis’s proposal for merit pay or performance bonuses is absurd. It has been tried repeatedly and failed everywhere. It was tried in Nashville, with a bonus of $15,000 for middle school math teachers who raised test scores. It failed. It has been tried again and again over the past 100 years and has NEVER worked.
Lewis is no “Reformer.” He is being paid to demoralize professional educators and find excuses to privatize public schools. This is not “leadership.” This is Disruption.
The teachers and students of Kentucky deserve better leaders who are dedicated to improving conditionsof teaching and learning.

 

Sometimes you have to use plain words to describe a theftin broad daylight.

Read Kentucky teacher Randy Wieck’s description of the broad-daylight theft of teachers’ pension funds and what this means, not only to teachers, but to school districts across the state.

The Kentucky public pension “deform” abomination signed by Governor Bevin July 24, 2019 – opposed by all Senate Democrats and 9 Republicans in the Kentucky Senate, deforms the pensions – it does not reform them.

The essential knife-thrusts to the heart of the government retiree pension are these:

1) It clips future hires from the plan (and future pay-ins).

2) It allows 118 quasi-governmental agencies (rape crisis centers; health departments, regional universities, etc.) to buy out of the retirement plan with only vague plans to pay off their 30-year pension deb.

The amounts owed are so large it is daft to think the agencies could meet their obligations without declaring bankruptcy and then consequently cutting the benefits of retirees…

By pushing the pension obligations on to individual school districts and thereby increasing the percentage of school-district budgets that must be paid into the pension plan they force the districts to seek cover in bankruptcy.

This will result in significant job losses:

To wit, Louisville, Kentucky, where I am a teacher, recently shut all of its outdoor summer pools; cancelled the most recent police recruit class; and shuttered several libraries to cover increased pension costs. School districts will have to follow suit if this fiscal breach of faith, if this crime – goes unchallenged in the courts, our last resort.

 

The Public Accountability Initiative is the place to go to follow the money. The team that produces these reports is called “Little Sis,” the opposite of Big Brother. Little Sis recently posted an eye-opening analysis of the funders of Teach for America.

This post identifies the Hedge funders who hold large amounts of Puerto Rico’s debt and are demanding a reduction in pensions and public services (especially public schools). It also details how people can fight back.

Time is running out for retirees in Puerto Rico in the struggle to preserve their pensions: the Financial Oversight and Management Board has proposed cuts that would take effect July 1, 2019.1 If those cuts go through, around 167,000 families will be affected immediately in this new attack against Puerto Ricans’ living conditions.2 Vulture funds, on the other hand, stand to rake in millions in profits at the expense of the suffering of thousands.

Rather than helping retirees take care of their families, the pension cuts will instead channel the money to hedge fund billionaires to pay for their extravagant lifestyles.

But retirees can still fight back by mobilizing against the upcoming debt deal, pressing the legislature to vote against the bill allowing the restructuring, voting against the debt adjustment plan, and pressuring judge Laura Taylor Swain to not approve the plan.

 

The Los Angeles Times reports that CalPERS, the state’s biggest pension fund, holding the pensions of state workers and taxpayers, was a major investor in the National Enquirer.

“The National Enquirer has been one of President Trump’s most controversial allies, delivering scathing coverage of his opponents to supermarket checkout lines and funneling $150,000 to one of his alleged mistresses to buy her silence.

“So it will probably come as a surprise to many California state employees and taxpayers to learn they were helping fund those efforts.

”During the 2016 presidential campaign, California’s massive public pension fund, CalPERS, was one of the biggest investors in the debt-laden owner of the National Enquirer, according to public records reviewed by the Los Angeles Times.

“Through an investment managed by a New Jersey hedge fund, California’s public pension fund appears to have owned as much as one-third of American Media Inc., the National Enquirer’s parent company, in 2016. It is not clear whether CalPERS continues to hold a major stake in the tabloid publisher.

”Fewer than a third of California voters cast their ballots for Trump, who remains deeply unpopular in the state.

”Informed of the investment, Jeremy Bulow, a professor of economics at Stanford University, laughed in disbelief.

“I’m sure lots of CalPERS [plan holders] will be happy to know they were paying hush money to help get Trump elected,” he said. “That’s going to make them feel real good about their pension fund managers!”

”The news organization Maplight reported last year that California was one of three states whose pension funds had invested in the privately held publisher, although it did not detail how much of the company the state fund controlled.

”California’s pension fund, the largest in the nation, runs on contributions from taxpayer-funded state agencies and their employees. It has long drawn scrutiny over whether its mandate of seeking strong returns meshes with liberal Californians’ expectations of ethical investment. Some of its investments drawing recent scrutiny have included oil pipelines, retailers that sell semiautomatic rifles, Russian sovereign debt and coal-producing companies.”

Jeannie Kaplan served two term on the elected Denver school board. I asked her to explain the issues behind the strike.

 

https://kaplanforkids.wordpress.com/2019/02/12/pcops-pensions-and-picketlines/

 

She writes:

 

PCOPS, PENSIONS, and PICKETLINES

Posted on by Jeannie Kaplan

 

On April 24, 2008 the Denver Public Schools agreed to borrow $750 million dollars from some of America’s top financial institutions for its outstanding pension debt. As I write this blog this morning February 12, 2019 Denver’s teachers have entered the second day of their first strike in 25 years. The amount of money being contested is somewhere less than one-half of one percent of the overall DPS budget.  0.04%.  Less than $10 million out of $1.4 billion.  The following tells some of the complicated story that connects these two events.

The $750 million taxpayer debt was divided this way: $300 million was to pay back already existing pension debt, $400 million was to fully fund the DPS retirement fund.  The remaining $50 million went to legal and financial fees. By the time this transaction was “fixed out” in 2013 a veritable Who’s Who in the Wall Street world was involved:  RBC Capital Markets, Goldman Sachs, JPMorgan, Citibank, Wells, Fargo, Bank of America. Part of the incentive to borrow this money was so DPS’ stand alone retirement fund could join the statewide retirement fund (Colorado Public Employees Retirement Association or PERA for short) which would in turn allow for more employee mobility into and out of DPS and would reduce DPS’ annual retirement contributions which would in turn provide more money for classrooms.  Because of previous financial miscalculations DPS was paying more per pupil for its retirement fund than any other school district in the state. Had this deal not been executed, the dollars paid to banks and lawyers could have been put directly into the DPS retirement fund itself. The DPS Superintendent at the time:  Michael Bennet. The Chief Operating Officer: Tom Boasberg.

Bennet and Boasberg came from the business world and were heralded as financial wizards. (They were boyhood friends growing up in Washington, D.C. together). Bennet had worked for billionaire Phil Anschutz and had already demonstrated a skepticism toward public pensions.  Boasberg arrived at DPS from Level 3 Communications, “an American multinational telecommunications and Internet service provider” where he was a mergers and acquisition guy.  Long story short they, along with bankers and lawyers concocted this very complicated and risky transaction using taxpayer money.  They were convinced that despite what was happening in the financial world at the time, DPS was going to save millions of dollars in pension costs.

Remember back to 2008. And remember we are talking about public, not private, money.  In February the auction rate securities froze.  In March Bear Stearns went under.  There were many indicators that something big could be going on in the world financial markets.  Nevertheless, in April the DPS board was encouraged to proceed with the high risk transaction which relied on the weekly LIBOR rate (it is the primary benchmark, along with the Euribor, for short-term interest rates around the world. Libor rates are calculated for five currencies and seven borrowing periods ranging from overnight to one year and are published each business day by Thomson Reuters.), swaps, (A swap is a derivative in which two counterparties exchange cash flows of one party’s financial instrument for those of the other party’s financial instrument. The benefits in question depend on the type of financial instruments involved.), bonds that were auctioned weekly.  And here is the headline from that deal.  In 10 years that $750 million loan has ballooned into twice as much debt  ($1.8 BILLION) and only for the past two years has the district begun paying any principal.  And simultaneously,  Bennet and Boasberg were able to convince the Colorado legislature that DPS should get the equivalent of “pre-payment” credit to deduct the PCOPs fees and interest from what would have been their normal pension contributions.  Because of these actions DPS employees have witnessed their pension fund drop about 20% from fully funded (100%) on January 1, 2010 to a little under 80% funded in June 30, 2018. But as Bennet and Boasberg would say as this defunding is occurring, “we are making our legal contributions, ” to which one must add, “Legal, but is it ethical?”

This story has become very relevant today because after 15 months of negotiations the district and the teachers have been unable to reach an agreement. Denver’s teachers have gone on strike over a compensation system called ProComp (Professional Compensation).  And the ProComp fight comes back to the pension.

In 2005 Denver voters approved a $25 million tax  (adjusted for inflation) for teacher pay-for-performance incentives.  A few thousand dollars was awarded for teachers who worked in hard to serve schools and taught hard to teach subjects.  The awarded dollars ($500-$2500) was intended to permanently raise base salaries.  It was reliable raise and it was PENSIONABLE.

In 2008 – hum, is this a coincidence? – the ProComp “bonus” went from a completely base building system to a yearly one-time bonus system.  And to further complicate matters, new bonus criteria (based primarily on high-stakes testing) have since been added. The result has been teachers cannot tell how much they will be making from year to year.  Some have said they can’t even tell how much they will make from paycheck to paycheck. Oh, and of course, these bonuses do not contribute to a teacher’s PENSIONABLE income resulting in…less retirement money  for retiring teachers, and simultaneously smaller demands on a dwindling pension fund.

While all this business bonus mess has been imposed in Denver, surrounding school districts have far surpassed Denver’s base pay scale, resulting in very high teacher turnover for DPS and a dwindling number of long serving professionals. Teachers are retiring earlier, teachers are leaving the district, and sadly teachers are leaving the profession. And because Denver is the quintessential reform district, DPS has been very welcoming to the reform idea of hiring short term, unlicensed educators with non-traditional training.  Think six week training programs.  The result of all this brilliance: fewer long serving employees resulting in less demand on a pension fund.  So the conflation of financial wizardry and education reform has hit Denver: businessmen Bennet and Boasberg take over the finances of a public school district, concoct a complicated and risky scenario during an unstable financial time, get the legislature to allow the defunding of the pension, implement a bonus based pay system to replace base-building, and voila – a strike by Denver’s teachers for a fair, reliable, sustainable pay system.

One more important headline. ProComp bonuses for teachers range from $500-$3000 per category per year. Last month a list of administrative bonuses without a rubric as to how the money has been awarded became available:  the current COO (Boasberg’s first job in DPS) received a $34,000 (!) bonus on top of his $198,000 salary, an “IMO executive principal” got $36,900 on top of his/her $130,000.  An IMO executive principal is the newest layer of reform administration.  He/she oversees a network of innovation schools (non union schools overseen by the district) and makes two to three times as much as a DPS teacher.  There are approximately 10 such positions with each person gathering around $20,000 in bonuses. These bonuses are not part of the ProComp agreement but rather come out of the DPS general fund.  Just imagine.  You could save almost half of the 8 million dollars they two sides are bickering over if you just eliminated these positions and the bonuses.

We must never end any story about Denver Public Schools without a reference to educational outcomes, for isn’t the first priority of a public education system educating its students? After 15 years of education reform brought by Michael Bennet and Tom Boasberg, 42% of Denver’s students are proficient in English Language Arts and 32% proficient in math.  Bennet and Boasberg  financial actions have also contributed to the doubling of the pension debt, and their policies have resulted in the first teacher strike in 25 years in Denver.  Quite a legacy left by the boys from D.C.

 

 

 

 

i always watch my words when I mention John Arnold. In 2014, I referred to him as a billionaire who used to work for Enron, the hot energy company that went bankrupt, leaving its many employees without a dime since they invested in the company’s worthless stock. I got an email from John’s PR person telling me that he would sue me if I didn’t retract my words implying that he benefitted while others suffered. At that moment, I was in the hospital having my broken knee replaced and I had no fight in me, nor any desire to be sued by a billionaire. I apologized.

Here is a headline from the Chronicle of Philanthropy. 

John and Laura Arnold Join Other Billionaires in Move Away From Traditional Philanthropy

I don’t have a subscription. It’s behind a paywall.

The story:

”The Laura and John Arnold Foundation is changing its structure so its billionaire founders can rely more heavily on political advocacy as they work toward goals such as reducing the cost of health care and overhauling the criminal-justice system.”

Another passion of John Arnold is pensions. He thinks they are a danger to our society. He once tried to fund a PBS special on the “pension crisis,” but it was canceled after investigative reporter David Sirota challenged the funding deal.

He is also passionate about hating public schools and loving charter schools.