January 2020
Texas Public Pension News
Continuing education provides public pension fund fiduciaries with core competencies and more
Managing a pension system is a complicated task that requires a fund’s board of trustees to establish the strategic direction of the system, hire necessary staff and consultants, adopt investment policy, and understand governance. As trustees and administrators of public pension plans, you aren’t expected to be know-it-alls, but you should obtain education that provides and improves core competencies as fiduciaries. 

www.texpers.blogspot.com
Pension Review Board is model for nationwide reform: report
Public pensions face significant funding challenges, largely driven by imprudent decision making by plans and their government sponsors. Rising pension costs are straining budgets and placing taxpayers and current and future retirees at risk. To mitigate the insecurity posed by underfunded pensions, states must increase oversight and adopt changes that limit shortsighted decision making. The Texas Pension Review Board (PRB) provides an example of how states might do so.

TEXPERS Note: This report is authored by Josh McGee, former board member of the Texas Pension Review Board and published by the Manhattan Institute, an organization that is often critical of public pensions.

www.manhattan-institute.org
Austin Employees lowers assumed rate of return
Trustees of City of Austin (Texas) Employees' Retirement System approved the reduction of the assumed rate of return for the $2.8 billion fund's assumed rate of return to 7% from 7.5% at a Dec. 10 board meeting.

www.pionline.com (may require subscription)
TEXPERS on Social Media
TEXPERS is now listing requests for proposals on our website. Our Jan. 8 Facebook post showcased our new feature. Want to publish your RFP on our website? Email texpers@texpers.org or call 713-622-8018 to ask about pricing. To see our RFPs, click here .
Mark Your Calendar
Studies and Research
NASRA publishes latest return assumptions
The National Association of State Retirement Administrators updated its listing of investment return assumptions in December. The rates reflect all known and announced rates by plan.

www.nasra.org
Retiree living standards, ranked by state
How well you will live in retirement will depend on two things: your income and the local cost of living.

A new study that ranks each state based on how many of its retirees can meet a basic standard of living comes up with an interesting combination of places that are financially friendly – or not – to people over 65.

www.squaredawayblog.bc.edu
About 5 million state and local workers are outside of the federal retirement program
There are millions of state and local public employees across the U.S who are not covered by Social Security, and are banking instead on government pensions as a main source of retirement income.
 
Researchers with the Urban Institute recently  highlighted  how these workers could face unique vulnerabilities with their financial security in retirement, especially as some states and localities seek to rein in spending on pensions by making benefits less generous.

www.routefifty.com
NCPERS report urges states to strengthen revenues before recession hits by ending loopholes and subsidies
State governments need to focus now, before another recession strikes, on closing tax loopholes and ending irresponsible corporate subsidies in order to avoid dire steps such as cutting state services and trimming public employees’ retirement benefits, according to an independent report released by the  National Conference on Public Employee Retirement Systems  (NCPERS).

www.businesswire.com
U.S. Public Pension News
Comptroller no longer collecting red-light camera fines, which could hurt pensions
ILLINOIS - The long and short of it is this: One way or another, we believe red-light cameras are on their way out in Illinois. And towns that rely on that stream of revenue – like North Riverside, which uses those funds to help cover its ever-increasing police and fire pension obligations – need to begin planning for that money to dry up.

www.rblandmark.com
Tackling the issue of conflict on public fund boards
US - Already under pressure to produce returns in the face of underfunded liabilities, some public pension boards also are having to address bad board behavior.

www.pionline.com (may require subscription)
Kansas Governor floats plan reduce KPERS payments
KANSAS - Gov. Laura Kelly is offering a plan to extend the deadline for closing a long-term funding gap by a decade. This would mean sharply reduced payments to the Kansas Public Employee Retirement System, or KPERS, during that time, and KPERS believes that step could actually increase the overall cost of getting the pension fully funded by over $4 billion.

www.kvoe.com
Oregon's public pension fund had a solid year, just in time
OREGON - As was the case for most investors, 2019 was a good year for Oregon’s underfunded public pension fund. And that should bring a rare sigh of relief to pension managers, lawmakers and government employers around the state.

www.oregonlive.com
Economic & Investment News
The longevity economy: gigantic and getting better
As a new decade and year are about to begin, professional forecasters are, of course, going through the exercise of guesstimating the future course of the markets and U.S. economy. From what I’ve seen, they’re generally expecting the record-breaking U.S. expansion to continue at a middling 2% pace in 2020. Among the factors routinely listed as preventing faster growth is the demographics of aging: The rising ranks of retirement-age Americans, many experts say, is bad for the economy.

They’re wrong. This timeworn economic dictum is not only outdated, it ignores changes in American society that are turning an aging population into more of an economic and social asset than ever. For evidence, take a look at the new report,  The Longevity Economic Outlook  by the Economist Intelligence Unit for AARP, an update of a 2013 AARP study.

www.nextavenue.org
Texas continues to lead nation in economic growth: report
New  data  from the Bureau of Economic Analysis shows Texas once again led the nation in economic growth during the third quarter of 2019.

www.thetexan.news
As California comes to grips with housing crisis, Texas real estate rises in 2020
Texas and California represent opposite poles on the spectrum of government ideology⁠—the Golden State’s Democratic supermajority versus the conservative Lone Star State’s regulation-averse independent streak⁠—and in recent years, starkly different results when it comes to housing policy and production.

www.curbed.com
Texas oil and gas industry could see a major slowdown in 2020
The oil and natural gas industry paid a record-setting $16.3 billion in taxes and royalties to local governments and the state in 2019, the Texas Oil and Gas Association announced on Jan. 14.

It is the highest sum since the 100-year-old association began tracking payments in 2007 — an indicator of the historic nature of the oil and gas boom that's gripped the state in recent years. The frenzy has driven U.S. fossil fuel production — and exports — to record levels.

But the announcement comes as the industry appears on the precipice of a major slowdown as high production rates, softened global demand and a host of other economic and political factors have shifted the calculus.

www.texastribune.org
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About Us 
The Texas Association of Public Employee Retirement Systems (TEXPERS) is a statewide voluntary nonprofit association that provides education and legislative advisory services to the trustees, administrators, professional service providers and employee groups that manage the retirement money of police, firefighters, municipal and district employees in cities across Texas.