Lillard Recommends Reforms To State Pension Plan

Tuesday, February 26, 2013

State Treasurer David H. Lillard, Jr. is recommending that the General Assembly adopt a number of reforms to the state’s retirement plan for public employees. The Tennessee Consolidated Retirement System (TCRS) is a well-funded pension plan.  The proposed changes will only apply to state employees, higher education employees, and teachers hired on or after July 1, 2014 and will ensure the continued financial strength of the TCRS. The bill will not affect the retirement benefits for current state employees, higher education employees, or teachers. 

“I want to stress that the changes I am recommending would not affect eligibility or benefits for employees or retirees who are already part of TCRS,” Treasurer Lillard said. “In fact, making these changes will help ensure that TCRS remains financially secure to honor the commitments made to those employees and retirees.”

Because pension plans carry costs and liabilities that stretch over many decades, Treasurer Lillard said it is important to look well into the future when evaluating a plan’s financial health.

“Let me be very clear: TCRS is in good financial shape right now, just as it has been for many decades,” Treasurer Lillard said. “That’s attributable to a number of factors, including the General Assembly’s commitment to ensuring TCRS is adequately funded, an effective investment strategy and fair but conservative benefit payouts. However, it is important to take a long view when trying to anticipate what a retirement plan’s future costs will be. Based on the actuarial projections and other information my staff and I have studied, we believe changes are needed now to protect taxpayers, employees and retirees in the future.”

Treasurer Lillard presented the General Assembly’s Council on Pensions and Insurance with proposed legislation Monday that, if adopted, would implement his recommendations. He is scheduled to have a more detailed discussion with council members during a follow-up meeting March 4.

The changes he is proposing would limit the state’s future liability for pension costs by creating a hybrid between a defined benefit plan, which guarantees specific payouts to retirees based on a formula, and a defined contribution plan, in which the state would provide fixed amounts of money to employees’ 401(k) or similar types of accounts.

The reforms would also reduce pension costs by adjusting the formula used to calculate retirement benefits, raising eligibility requirements and collecting employee payroll deductions.  The new plan will also have cost controls that will apply only if the plan’s total costs exceed certain thresholds.

“In 2003, state taxpayers were spending about $264 million annually to support the pension system,” Treasurer Lillard said. “That number had grown to $731 million last year. Based on projections we have seen, the cost could go up by one-third or more over the next 10 years if changes aren’t made, which would push the taxpayers’ total annual expense above $1 billion.”

For further information, go to www.treasury.tn.gov/tcrs and select the tab titled “Proposed State and Teacher Plans.”


JHM Certified Public Accountants Celebrates New Location

After nearly 40 years in their downtown location, Johnson, Hickey & Murchison Certified Public Accountants, a Chattanooga-based CPA firm, is moving to a new site just off Shallowford Road.   “The new location and fresh build-out have provided us with renewed energy and enthusiasm,” said Dean Krech, managing partner for JHM Certified Public Accountants. “We are so thrilled ... (click for more)

Blissful Wellness At Nutrition World Has Grand Reopening

Blissful Wellness at Nutrition World will host a grand reopening next week. It is at 6237 Vance Road Ste 8 Chattanooga, TN 37421. The week will include workshops, give a ways, and a free yoga class. For more information about the events of the week, contact Studio Manager Maggie Bailey at 423-298-8670 or visit Blissful Wellness on Facebook. (click for more)

City To Begin Shipping Much Of Its Garbage To Bradley County

City Public Works Administrator Justin Holland said the city plans to begin shipping much of its garbage to Bradley County. He said the deal is projected to extend the life of the city landfill at Birchwood by 15 years. Mr. Holland said Bradley County "has a huge landfill and takes garbage from Knoxville and other municipalities. It's regional." He said Bradley County charges ... (click for more)

Man Says He Did Nothing To Provoke Shooting At Bakewell Gas Station; Suspect Says Victim Was Coming Toward Him

A 33-year-old man who was shot in the face during a clash at a Bakewell gas station said he did nothing to provoke the shooting. The man charged said the victim cursed him, then started toward him. General Sessions Court Judge Clarence Shattuck, after a hearing on Tuesday, bound to the Grand Jury a charge of attempted first-degree murder against Donald Stuard II, 29, of Old Washington ... (click for more)

Something Beautiful Happened Monday Night - Not The Debate

Monday, Sept. 26, our first presidential debate happened; no minds were changed.  Yet something beautiful and important happened.  The Atlanta Falcons, my team, played the New Orleans Saints.  Instead of some irrelevant, broad based, screw America protest, the opposing teams locked arms in unity. I was impressed. I have been a Falcon Fan since 1971 when WMOC AM ... (click for more)

Roy Exum: Our 2.0 Embarrassment

Let’s pretend you are coming to a new and exciting world. You are on the jolly good ship “Mayflower” when some Miles Standish-type of a guy (he was the Pilgrim’s first cop) calls you into is presence and says, “Within two hours we are expected to stand on Plymouth Rock. Please come up with ten primary goals we should have in our public schools.” I believe you could do it within ... (click for more)