Source: Daniel L. Morrell, Kristie A. Abston, Compensation & Benefits Review, OnlineFirst, Published January 7, 2019
From the abstract:
Millennials are currently the largest generation at work and will reach an estimated 75% of the labor force by 2025. Studies have shown that millennials hold slightly different attitudes toward work when compared with previous generations. They more readily change jobs and are generally less committed to their organizations, with an estimated 66% of millennial employees planning to leave their current company within 5 years. These differences in work values necessitate changes in current approaches to compensation and benefit packages that would better align with these changing values. The goal of this article is to review recent empirical data on Millennials as compared with previous generations and then offer suggestions for what changes might improve retention.
Source: John G. Kilgour, Compensation & Benefits Review, OnlineFirst, Published January 7, 2019
From the abstract:
In recent years, student loan repayment programs have emerged as the hot new employee benefit. However, their growth has been restricted by their lack of favored tax status. On August 17, 2018, the Internal Revenue Service issued a private letter ruling approving a proposal to create such a program within a 401(k) plan. In a deft piece of reasoning, the private letter ruling provides relief from the so-called “contingent benefit prohibition.” This article examines student loan borrowing, the private letter ruling and its likely consequences and limitations.
Source: Liz Farmer, Governing, January 9, 2019
Retiree health care is one of the fastest-growing line items in government budgets and, in response, some governments are scrapping their traditional health plans.
Source: Leon (Rocky) Joyner, Nari Rhee, UC Berkeley Center for Labor Research and Education (Labor Center) and the National Institute on Retirement Security, January 2019
From the abstract:
A new report finds that teacher pension plans play a critical role in retaining educators while also providing greater retirement security than 401(k)-style retirement accounts. Eight out of ten educators serving in the six states studied can expect to collect pension benefits that are greater in value than what they could receive under an idealized 401(k)-type plan. The study also finds that the typical teacher in these states that offer pensions will serve 25 years in the same state, while two out of three educators will teach for at least 20 years.
These findings are featured in new research, Teacher Pensions vs. 401(k)s in Six States: Colorado, Connecticut, Georgia, Kentucky, Missouri and Texas, from the UC Berkeley Center for Labor Research and Education (Labor Center) and the National Institute on Retirement Security. The report is author by Dr. Nari Rhee, director of the Retirement Security Program at the UC Berkeley Labor Center, and Leon (Rocky) Joyner, vice president and actuary with Segal Consulting.
Source: S&P Global Ratings, December 13, 2018
S&P Global Ratings’ U.S. public finance team continues to highlight key pension and other postemployment benefit (OPEB) trends. In 2018, our research has provided comprehensive national and regional insight on these obligations and rising governmental costs to inform a forward-looking view on credit risk. In case you missed them, we have compiled a list of research reports published in 2018 on these topics.
Source: David Levett, Rachel Cortez, Alexandra S. Parker, Moody’s, U.S. Public Finance, Sector In-Depth, December 14, 2018
Heavy pension burdens have weakened credit quality for many Illinois cities in recent years, but some Illinois municipalities have maintained exceptional credit profiles. Such cities typically have drawn on their strong legal revenue-raising flexibility and high median family incomes (MFI) to support increased pension contributions while maintaining strong reserves. However, credit quality could deteriorate for even these cities if they do not continue to absorb growing pension contributions and keep already high unfunded liabilities in check…..
Source: U.S. Government Accountability Office, GAO-19-208SP, December 13, 2018
From the summary:
What’s the prognosis for the fiscal health of state and local governments across the nation?
Our annual outlook suggests the sector will have an increasingly tough time covering their bills over the next 50 years. Our model shows both revenue and spending will increase; however, spending will rise faster. Revenues may be insufficient to sustain the amount of government service currently provided.
Our model also suggests health care costs will largely drive the spending increases—in particular, Medicaid spending and spending on health benefits for state and local government employees and retirees.
Source: Ariel Marek Pihl, Gaetano Basso, Journal of Policy Analysis and Management, Volume 38 Issue 1, Winter 2019
From the abstract:
The effects of paid parental leave policies on infant health have yet to be established. In this paper we investigate these effects by exploiting the introduction of California Paid Family Leave (PFL), the first program in the U.S. that specifically provides working parents with paid time off for bonding with a newborn. We measure health using the full census of infant hospitalizations in California and a set of control states, and implement a differences‐in‐differences approach. Our results suggest a decline in infant admissions, which is concentrated among those causes that are potentially affected by closer childcare (and to a lesser extent breastfeeding). Other admissions that are unlikely to be affected by parental leave do not exhibit the same pattern.
Source: S&P Global Ratings, November 28, 2018
Other postemployment benefit (OPEB) liabilities, which consist primarily of retiree health care plans, are a growing concern for certain states’ credit quality and require attention to control higher future costs. Total unfunded state OPEB liabilities have increased significantly for the third year in a row, according to S&P Global Ratings’ latest survey of U.S. states.
Source: Hamilton Nolan, Splinter, December 4, 2018
After a nine-week strike, thousands of Mariott Hotel workers in San Francisco won a contract with significant wage increases and better benefits. How did they do this? Strike. Strikes work….