washington report hank h. kim, esq. ncpers executive director and counsel
TRANSCRIPT
Washington Report
Hank H. Kim, Esq.
NCPERS Executive Director and Counsel
Presentation Outline
• Introduction to National Conference on Public Employee Retirement Systems
• Issues for the remainder of 110th Congress First Session
• NCPERS legislative priorities for 2008
• Q&A and wrap up
NCPERS
• Largest nonprofit trade association representing 500 public sector DB plans
• Who we ARE:– Advocacy– Research– Education
NCPERS Position
• All workers (public and private) should have a traditional pension benefit (DB plan) as their primary pension plan
• DB plans are good for governments, employees, taxpayers and the economy
First Session Items
Pension Protection Act (PPA)
• Signed into law August 2006.
• Number of provisions beneficial to public pensions and beneficiaries.
• Healthcare Enhancement for Local Public Safety (HELPS) Retirees Act – Sec. 845 of PPA
HELPS Retirees Act
• Up to $3,000 per year can be used tax-free to pay for health or LTC insurance premiums.– $6,000 if both husband & wife are PSOs.
• Eligible PSOs– DOJ definition of PSO.
– Must have retired or separated as a PSO.
– Must be eligible for actuarially unreduced pension benefit.
• Pension plan must pay directly to health plan(s).• Self-insured health plans can participate.• No survivor benefits.
First Session Items
Pension Protection Act• HELPS Retirees provision (Sec. 845).• Effective January 1, 2007.• On January 10, Treasury issued preliminary
guidance (2007-7). • On May 15, Treasury sent a letter to Congress
saying that self-insured plans would be treated as health insurance plans for the purposes of HELPS Retirees and that pension systems could rely upon the letter to begin implementing HELPS Retirees benefits immediately www.NCPERS.org.
First Session Items
HELPS Retirees Act (cont.)• In June, the IRS issued 1099-R Instructions and
OPM issued a Benefits Administration Letter where both agencies stated that the $3,000 tax exclusion for health insurance premiums under HELPS Retirees is to be claimed on individuals' tax returns.
• In early August, Congress introduced the technical corrections bills to the PPA. – S 1974– HR 3361
First Session Items
Pension Protection Act
• Public Safety DROP Distribution (Sec. 828).
• Lump sum distribution of DB plan at age 50 without 10% tax.
• Rollover issue.
• Those who elected to take substantially equal distributions prior to PPA.
First Session Items
Pension Protection Act
• Age Discrimination in Employment Act modifications (Sec. 701).
• ADEA intended to protect older workers from discriminatory practices.
• ADEA issue for public plans that credit interest.
First Session Items
PPA Technical Corrections Outlook• Technical corrections bills introduced
August 2 & 3.• Legislative fix for IRS error on self-funded
plans.• Number of must pass corrections.• Recess in December.
– Appropriations– Defense Authorization
Other Items
Divestments
• September 11; genocide in Darfur, Sudan; Iranian nuclear ambitions have rekindled the call for divestment.
Sudan DivestmentAlaska
Texas
Utah
Montana
California
Arizona
Idaho
Nevada
Oregon
Iowa
Colorado
Kansas
Wyoming
New Mexico
Missouri
Minnesota
Nebraska
Oklahoma
South Dakota
Washington
Arkansas
North Dakota
LouisianaHawaii
IllinoisOhio
Florida
GeorgiaAlabama
Wisconsin
Virginia
Indiana
Michigan
Mississippi
Kentucky
Tennessee
Pennsylvania
NorthCarolina
SouthCarolina
WestVirginia
New Jersey
Maine
New York
Vermont
Maryland
New Hampshire
Connecticut
Delaware
Massachusetts
Rhode Island
Iran/Other DivestmentAlaska
Texas
Utah
Montana
California
Arizona
Idaho
Nevada
Oregon
Iowa
Colorado
Kansas
Wyoming
New Mexico
Missouri
Minnesota
Nebraska
Oklahoma
South Dakota
Washington
Arkansas
North Dakota
LouisianaHawaii
IllinoisOhio
Florida
GeorgiaAlabama
Wisconsin
Virginia
Indiana
Michigan
Mississippi
Kentucky
Tennessee
Pennsylvania
NorthCarolina
SouthCarolina
WestVirginia
New Jersey
Maine
New York
Vermont
Maryland
New Hampshire
Connecticut
Delaware
Massachusetts
Rhode Island
Federal Updates
• HR 1357 (Ros-Lehtinen): Divest from Iran
• HR 2347 (Frank): Divest from Iran
• At least 10 other bills introduced.
Divestment
NCPERS Position• NCPERS does not support terrorism sponsoring
states.• NCPERS does not support the genocide in Darfur.• Foreign policy is exclusive jurisdiction of the
Federal government.• Trustees and other fiduciaries must act in the best
interest of the beneficiaries.
Communications with Feds
• State, Treasury, Commerce, SEC
• Institutional investors need more information in a searchable format
• Only the federal government is in a position to provide this information
Other Items
• GPO/WEP Reform.
• Growing media/Congressional interest in private equity, hedge funds, and subprime mess and their potential impact on public funds.
• GAO Studies
• SEC White Paper
Second Session Items
• HELPS Retirees Implementation.
• HELPS II.
• DROP Rollover.
NCPERS 2008 Educational Programs
Legislative ConferenceFebruary 4-6, 2008 in Washington, DC
Trustee Educational Conference May 16-17, 2008 in New Orleans, LA
Annual Conference May 18-22, 2008 in New Orleans, LA
Program for Advanced Trustee StudiesJuly 22-24, 2008 in Cambridge, MA (Harvard Law School)
Public Sector Health Care Symposium September 9-10, 2008 in San Francisco, CA
Public Safety Employee Pension & Benefits ConferenceOctober 12-15, 2008 in Palm Springs, CA
