Forensics and the Future of a Connecticut Pension Plan

Source: Jean-Pierre Aubry and Alicia H. Munnell, Center for Retirement Research at Boston College, SLP#46, December 2015

The brief’s key findings are: 
– Connecticut’s State Employees Retirement System faces a large unfunded liability, despite recent efforts by the State to fund.
– A significant source of the liability is the “legacy debt” built up before the State began pre-funding its pensions in the 1970s.
– More recently, inadequate contributions, low investment returns (since 2000), and early retirement incentives have added to the problem.
– A promising approach for addressing the funding problem is to provide more breathing room in exchange for a real and sustained commitment to funding by:
– separately funding the legacy debt over multiple generations; while
– funding ongoing benefits using a stricter method for calculating required contributions, and reducing the long-term assumed return on plan assets.

An Explanation of Negative Swap Spreads: Demand for Duration from Underfunded Pension Plans

Source: Sven Klingler – Copenhagen Business School, Suresh M. Sundaresan – Columbia Business School – Finance and Economics, July 27, 2016

From the abstract:     
In September 2008, the US swap spread for 30-year swap contracts turned negative and is still negative as of today. Persistent negative swap spreads are puzzling, and the fact that they prevail only in 30-year swaps has not been explained. To this end, we offer a framework where underfunded pension plans’ demand for duration hedging leads them to demand fixed rates in interest rate swaps (IRS) with 30 years to maturity by funding them at floating rates. This demand when coupled with balance sheet constraints of swap dealers which arose after the crisis of 2008, can drive the long-term swap spread to become negative. We develop a simple model with stochastic term structure to derive these implications. We then construct an empirical measure of the aggregate funding status of Defined Benefits (DB) pension plans from the Federal Reserve flow of funds accounts. We show that this measure of the extent of aggregate under-funding is a significant explanatory variable of thirty-year swap spreads. We also show that this channel seems to be at work only for 30-year IRS and not for swaps with shorter maturities.

Overview of First Draft of Guidelines for Library Service to People Experiencing Homelessness and A Brief Overview of Services to Youth Experiencing Homelessness Without Parents or Guardians

Source: Julie Ann Winkelstein, University of Tennessee – School of Information Sciences, Paper presented at: IFLA WLIC 2016, July 28, 2016

This paper provides an overview of the First Draft of the Guidelines for Library Service to People Experiencing Homelessness. It also includes a section on addressing the specific needs of youth ages 12 to 24 who are experiencing homelessness and are unaccompanied by parents or guardians. The Section for Library Services to People with Special Needs (LSN) is creating these international Guidelines for libraries that want to address the topic of homelessness in their communities. Worldwide, libraries are recognizing there are community members who are experiencing homelessness and in response, they are providing resources, creating public conduct policies and procedures related to being unstably housed, implementing staff trainings, engaging in outreach, providing in-house services and partnering with local agencies. LSN is committed to providing relevant and practical Guidelines that will be useful to libraries as they address the many barriers encountered by those in their communities who are experiencing homelessness or who are unstably housed. LSN considers this topic a question of human rights, and these Guidelines reflect that approach. The goal of these Guidelines is to respond to frequently asked questions related to this topic, to provide examples of what libraries are doing, offer concrete suggestions, and provide useful resources for further information. It is hoped library staff can incorporate information from these Guidelines and any other sources and create positive and specific steps to address homelessness in their libraries and communities. LSN will continue to work on these Guidelines, incorporating suggestions and comments as part of a worldwide reviewing process. The final Guidelines will acknowledge these contributions.

Will the Supreme Court Agree with the NLRB that Pre-Dispute Employment Arbitration Provisions Containing Class and Collective Action Waivers in Both Judicial and Arbitral Forums Violate the National Labor Relations Act – Whether There is an Opt-Out or Not?

Source: Christine Neylon O’Brien, University of Pennsylvania Journal of Business Law, Vol. 19, accepted (Forthcoming), 2016

From the abstract:     
Should employers be able to require individual employees to sign away their rights to collective action as a condition of employment? The National Labor Relations Board has held in D.R. Horton and Murphy Oil USA that when employers require employees to waive their right to “joint, class, or collective claims addressing wages, hours, or other working conditions against the employer in any forum, arbitral or judicial” as a condition of employment, this violates the NLRA. Even allowing prospective employees to opt out of such class waivers does not cure the violation in the NLRB’s view according to its decision in On Assignment Staffing Services. A circuit split has developed on enforcement of the Board’s orders on the class waiver issue with the Fifth Circuit denying the NLRB enforcement, the Seventh affirming the Board, and the Eight Circuit joining the Fifth. There are several appellate cases pending before the Ninth Circuit which has yet to fully develop its stance and approximately sixty class waiver cases pending on appeal. The Supreme Court will likely be faced with deciding one of these appeals soon. This article discusses the NLRB’s and courts’ positions from several recent cases involving class waivers in individual employment dispute agreements. It suggests how the courts and the Supreme Court should rule as well as the possibility of legislative action.

Collective Coercion

Source: Benjamin Means, Susan S. Kuo, Boston College Law Review, Forthcoming, 2016
[editor’s note: see page 29 for a discussion on Friedrichs v. California Teachers Association]

From the abstract:     
When a collective-choice situation places coercive pressure on individual participants, the law’s traditional protection of individual autonomy against coercion must be reconciled with its necessary role in resolving problems of collective action. On the one hand, the law might seek to remove coercion from the equation so that individuals are free to make their own decisions. On the other hand, the law might empower a central authority to decide, thereby solving a problem of collective action in order to maximize the group’s shared interests. The tension between these two approaches creates deep uncertainty for the regulation of collective-choice situations. It is palpable in the law’s conflicted response to corporate takeover bids in that applicable federal and state laws simultaneously enhance and diminish shareholder choice. Elsewhere — for example, the structure of government buyout programs, or the imposition of mandatory fees for nonunion employees — the intersection of coercion and collective choice may be overlooked altogether. By situating the literature on coercion in the context of offers that exploit collective-action problems, we propose a unifying framework for identifying and remedying what we have labeled collective coercion.

Workplace Design: The Good, the Bad, and the Productive

Source: Michael Housman, Dylan Minor, Harvard Business School Working Paper 16-147, June 1, 2016

From the abstract:     
We study the effects of performance spillover in the workplace-both positive and negative-on several dimensions, and find that it is pervasive and decreasing in the physical distance between workers. We also find that workers have different strengths, and that while spillover is minimal for a worker when it occurs in an area of strength, the same worker can be greatly affected if the spillover occurs in her area of weakness. We find this feature allows for a symbiotic pairing of workers in physical space that can improve performance by some 15%. Overall, workplace space appears to be a resource that firms can use to design more effective organizations.

Who Pays for White-Collar Crime?

Source: Paul M. Healy, George Serafeim, Harvard Business School, June 29, 2016

From the abstract:     
Using a proprietary dataset of 667 companies around the world that experienced white-collar crime we investigate what drives punishment of perpetrators of crime. We find a significantly lower propensity to punish crime in our sample, where most crimes are not reported to the regulator, relative to samples in studies investigating punishment of perpetrators in cases investigated by U.S. regulatory authorities. Punishment severity is significantly lower for senior executives, for perpetrators of crimes that do not directly steal from the company and at smaller companies. While economic reasons could explain these associations we show that gender and frequency of crimes moderate the relation between punishment severity and seniority. Male senior executives and senior executives in organizations with widespread crime are treated more leniently compared to senior female perpetrators or compared to senior perpetrators in organizations with isolated cases of crime. These results suggest that agency problems could partly explain punishment severity.

Critical Consciousness Development Impact on Social Justice Movement Giving among Wealthy Activists

Source: Laura J. Wernick, Social Work Research, Advance Access, First published online: July 7, 2016
(subscription required)

From the abstract:
Scholars and practitioners have suggested that people with privilege organize their own communities to affect greater action and leverage their power and privilege; however, little research has examined how such a model functions. Emerging research suggests that transformative organizing (TO) models can be modified to effectively move people with class privilege to take action while maintaining accountability to marginalized communities. Financial giving is a measurable social action goal that serves to both support greater economic equity and fund social justice movements, an important goal of movement organizers. The study reported in this article used data drawn from a mixed-methods case study. Ordinary least squares regression analyses suggest that the impact of participation in a modified TO model on giving is positively associated with critical consciousness development, particularly for white participants. Furthermore, the effectiveness of this approach appears to be strengthened when coupled with creating a giving plan.