Incumbents, amendments generally get nod in pension-related races
By Kevin Olsen and Melanie Zanona | November 7, 2012 3:56 pm
Incumbent candidates and parties largely won state and local elections that could potentially have the greatest impact on pension plans and reform, while most pension-related constitutional amendments passed.
Democratic incumbents in Oregon, state Treasurer Ted Wheeler and Secretary of State Kate Brown, earned new terms, while North Carolina Treasurer Janet Cowell defeated Republican challenger Steve Royal. Ms. Cowell, in her position of treasurer, is sole fiduciary for the $74.5 billion North Carolina Retirement Systems, Raleigh.
The Oregon challengers were calling for large-scale pension reform; Republican treasurer candidate Tom Cox proposed a four-step plan that would place all new hires into a defined contribution plan and eventually freeze benefits on existing employees and place them into a DC plan.
In Missouri, incumbent Democratic Treasurer Clint Zweifel defeated Republican challenger Cole McNary 50.3% to 45.5%. Mr. McNary wanted to address the financial health of the state pension systems as a top priority and eliminate the treasurer as a position on the state retirement system board, calling it a conflict of interest. Mr. Zweifel in the past has pushed for a lower assumed rate of return for the $7.7 billion Missouri State Employees' Retirement System, Jefferson City.
In a changing of the guard, incumbent San Bernardino County (Calif.) 3rd District Supervisor Neil Derry was defeated by James C. Ramos, 59.2% to 40.8%. Mr. Derry unsuccessfully proposed a pension-reform measure for the ballot that would have raised the retirement age, to 62 from 55, for new non-public safety county employees and reduced the amount they earn annually toward their pension benefits. Mr. Derry was expected to continue pushing pension reform if elected to another term. Mr. Ramos has been silent on the pension reform issue.
In San Diego, Bob Filner won the mayoral election, defeating Republican Carl DeMaio 51.5% to 48.5% to become the first Democrat elected to the office since 1996. Mr. Filner opposed a voter-approved proposition to place all new hires, except police, in a defined contribution plan but has said he will implement the new DC plan because of voters' overwhelming support. Mr. DeMaio was an ardent supporter of the measure.
Among constitutional amendments on ballots, more than 70% of Louisiana voters agreed to a measure that will deny pension benefits to any employee or official convicted of a felony related to their public job, while voters in New Jersey overwhelmingly decided to pass a constitutional amendment that allows increases in mandatory contributions from all judges' salaries.
Arkansas voters passed a measure that allows cities and counties to create districts where they could levy a sales tax to back bonds for infrastructure improvements, but the tax revenue could be used to retire unfunded liabilities of closed local police and fire pension plans.
The ballot measure in Oregon's Multnomah and Clackamas counties to amend the Portland City Charter was passed, changing the Portland Fire and Police Disability and Retirement Program — by combining service by a city employee with another employer in calculating service credit for pension benefits and altering benefits for part-time employees will now be prohibited, and the vesting period for non-service-related death benefits will be changed to five years from 10.
The only pension-related measures that failed were in Michigan and Illinois. The proposal to keep Michigan's emergency manager law — which allows the governor to appoint a manager to be in charge of all operational aspects of municipalities and school districts deemed financially troubled — was struck down.
In Illinois, ranked by the Pew Center on the States as the worst state for funding of public pension plans, voters rejected amending the state constitution to require a three-fifths supermajority vote by the General Assembly, city councils and school districts to enhance any public pension benefits.