Californians Hit as Bad Debts Lead to Government Pension Cuts
The California Public Employees’ Retirement System (CalPERS) has been paying benefits at a faster pace than it brings money in, so it may start reducing benefits to people whose localities have been derelict in their payments, Bloomberg News reported yesterday. As CalPERS, the nation’s largest public pension system, deals with a growing gap between what’s been promised and what’s been set aside, it may slash the checks of 190 workers in the East San Gabriel Valley Human Services Consortium by 63 percent — the rate by which the agency has fallen short in its payments. In December, CalPERS moved to ensure its long-term sustainability by reducing the assumed return on its investments to 7 percent from 7.5 percent. That will trigger higher annual contributions from governments, since it can’t count as much on financial market gains to cover the obligations. "Unless something is done to stem the mounting costs or to find ways to fund those mounting costs for employees, then the only recourse, beyond reducing service levels to unsustainable levels, is going to be to cut benefits for retirees," said Michael Coleman, fiscal policy adviser for the League of California Cities.
Heritage Foundation Paper Provides Plan for Dismantling Dodd-Frank
Conservative think-tank The Heritage Foundation yesterday released a report, "Prosperity Unleashed: Smarter Financial Regulation," aiming to provide policymakers a roadmap for replacing the Dodd-Frank Act. Amid President Trump's goal to roll back financial regulations crafted during the Obama administration in response to the financial crisis of 2008, the paper lists reforms to be made in both the banking and securities markets. "Financial firms should be permitted to fail, just as other firms do," according to the report. "Government should not 'save' participants from failure because doing so impedes the ability of markets to direct resources to their highest and best use."
U.S. Jobless Claims Lowest Since March 1973
The number of Americans applying for unemployment benefits fell to the lowest level in 44 years last week, more evidence of a healthy labor market, the Wall Street Journal reported today. Initial jobless claims, a proxy for layoffs across the U.S., fell by 19,000 to a seasonally adjusted 223,000 in the week ended Feb. 25, the Labor Department said today. Jobless claims have remained below 300,000 for 104 consecutive weeks, the longest such streak since 1970 — when the U.S. workforce and population were much smaller than they are today.
ASM Spotlight: Are Restaurants Experiencing “Unhappy Hour?” ABI President Jeff Pomerantz Provides a Preview of the Restaurant Case Session
What issues will experts be examining on the “Why Are My Favorite Restaurants Closing? Review and Forecast of Restaurant Case Issues” panel? To hear a preview of the session by ABI President Jeff Pomerantz of Pachulski Stang Ziehl & Jones LLP (Los Angeles), who will be moderating the panel, please click the graphic below:
Don't miss this session and other engaging speakers at the 2017 Annual Spring Meeting! Click here for more information and to register.
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New on ABI’s Bankruptcy Blog Exchange: Vote on GOP Dodd-Frank Reform Bill Likely to Be Delayed Until Summer
A recent blog post cautioned that a vote on a House plan to replace the Dodd-Frank Act may not happen as quickly as originally expected due to limited floor time and other legislative priorities, such as health care reform, that are likely to take precedence.
To read more on this blog and all others on the ABI Blog Exchange, please click here.
