Please ensure Javascript is enabled for purposes of website accessibility
City Official Is No Fan of Nunes Pension Reform Bill
gvw_david_taub
By David Taub, Senior Reporter
Published 6 years ago on
August 28, 2018

Share

Tulare Congressman Devin Nunes is pushing his pension oversight bill for the fifth time.
And he’s doing so with support from groups associated with such conservative icons as the Koch brothers and Grover Norquist.
The Public Employee Pension Transparency Act, or HR 6290. would encourage disclosure of public pension fund’s liabilities, according to information on the Republican’s website.

Photo of GV Wire's David Taub
Politics 101
David Taub
Numerous publications and pension analysts have pointed out that Fresno’s pension system is one of the best funded in the country. In fact, it boasts a large surplus.
These disclosures would be made available on a public website. Failure to do so would strip local and state agencies from authorizing federal tax-exempt bonds.
Introduced June 28, it is the fifth consecutive congressional session that Nunes has proposed the bill. Each previous time, it never even had a committee vote.
While the bill has support from many good government groups, many pension managers — including those who handle the city of Fresno’s funds — are leery.
The managers are concerned about federal legislation that creates new oversight, and in Robert Theller’s estimation, overregulation.
Theller oversees the Fresno pension system’s $3 billion assets. The money is collected from the paychecks of municipal employees and pooled with the city’s contributions. The money is then invested with professional money managers. The system pays out $10 million a month collectively to city retirees.
Numerous publications and analysts have described Fresno’s pension system as one of the best funded in the country. In fact, the fund boasts a large surplus.
Oversight Needed
Nunes expressed concern that a lack of transparency can lead state and municipal pension systems to insolvency and a loss of millions, if not billions, of dollars.
“The bill also expressly states that state and local pension obligations are solely the responsibility of those entities and that the federal government will not provide a bailout,” Nunes warned in an overview of a similar bill introduced in 2016.
Nunes, through his website, says PEPTA creates needed oversight.
”Public pension accounting should ideally provide citizens and government officials with a sense of how indebted taxpayers are to state and local government employees. However, the government accounting standards currently used allow states to use procedures that severely understate their liabilities,” Nunes argues.
Furthermore, Nunes referenced a public pension crisis in Puerto Rico as a reason why he is pushing PEPTA. There have been pension issues in the past in Illinois, New Jersey, and Kentucky as well.
And CALmatters columnist Dan Walters has sounded the alarm about what he perceives as a looming pension crisis at the state level in California.

Fresno Retirement System Opposes

In a letter to City of Fresno Retirement Systems members and retirees, Theller warned that if Nunes’ proposal becomes law it could double the costs for the city and its employees.


“CFRS is very well funded and shouldn’t be forced to report its liabilities as proposed in this legislation.” CFRS director Robert Theller
Theller wrote that PEPTA would “require public sector defined benefit pension systems like CFRS to calculate liabilities using the rate of return on U.S. Treasury bonds.  This will raise costs for employees as well as local governments to fund Public pensions and not actually reduce any risks.  CFRS is very well funded and shouldn’t be forced to report its liabilities as proposed in this legislation.”

Breaking that down, the CFRS assumed rate of return over a long period of time is about 7.25%. That is based on the advice and research of investment professionals.
A Treasury bond return on investment is about 3%. That means the city and its employees would have to pay more in the beginning to get the same desired outcome if the return rate percentage is lower.
For example, to increase an investment to $100 over a period of time, an investor would need to deposit $97.08 at 3% rate. At a 7.25% rate, that initial investment is $93.24.
Theller also argues that if pension plans are eliminated, city employees would have to invest their own retirement money, which also increases costs. He says pension systems offer lower investment fees than individual plans.
Nunes defended the bill, saying in 2016: “Many state and local pension funds are hiding vast debts through accounting gimmicks. The taxpayers — who will be forced to pay off these enormous debts if pension systems go insolvent — have a right to know the true condition of these pension plans, and the systems’ participants need to know how secure their benefits are.”
Nunes’s office did not respond for a comment on this story.

Supporters Site Transparency

The bill lists support from many good government and tax fighting groups including the Americans for Tax Reform associated with Grover Norquist, and Americans for Prosperity, affiliated with the Koch brothers.

“This bill will prohibit the federal government including the Federal Reserve from providing any bailout whatsoever to those plans should they happen to go belly up.”Robert Romano, Americans for Limited Government
Americans for Limited Government also supports the bill. The group’s vice president for public policy, Robert Romano, says it’s about protecting the taxpayer.
“This bill will prohibit the federal government including the Federal Reserve from providing any bailout whatsoever to those plans should they happen to go belly up,” Romano said. “The transparency in these plans has not been adequate to provide state and local pensioners the information that they need to make informed decisions about whether they’re being properly managed.”
Theller disagrees with Romano’s transparency assessment. CFRS’s actions are controlled by a board appointed by the mayor and approved by city council. Its meetings are public, with documents and agendas posted online.
Additionally, Theller said, pension funds fall under federal, state and local regulations and conform to Governmental Accounting Standards Board practices. He finds additional regulations duplicative, burdensome, and costly.
Romano countered: “Of the information that they say they’re reporting to their local board is similar to the information that they’ll be reporting to the U.S. Treasury, I’m sure they could just copy and paste it.”

PEPTA Tried Before

The bill has been assigned to the Ways and Means Committee. The committee has not set a hearing date. Nunes and co-sponsor Rep. Mike Bishop (R-Mich.) serve on Ways and Means. Congressman Chris Stewart (R-Utah), Tom McClintock (R-Roseville) and Ken Calvert (R-Corona) also co-sponsored the bill.
Nunes has introduced similar bills before (HR 6484 in 2010; HR 567 in 2011; HR 1628 in 2013; and HR 4822 in 2016). None of the bills made it past referral to Ways and Means.

DON'T MISS

IDF Chief Rebukes Netanyahu Over Absence of Gaza Postwar Strategy

DON'T MISS

Will Becerra Run for Governor? He Tours UCSF Fresno With Costa

DON'T MISS

Israeli Defense Chief Opposes ‘Israeli Military Rule’ in Gaza

DON'T MISS

Nelly Korda Triumphs at Mizuho Americas Open

DON'T MISS

Sheriff’s Office to Break Ground on Memorial for Fallen Officers. What Will It Look Like?

DON'T MISS

Hydrogen vs. Electric Batteries: A Case For Fresno’s Transportation & Ag Future

DON'T MISS

Operation Gridlock: 32 Arrests, 59 Gun Seized, Violent Gangs Dismantled

DON'T MISS

Bulldogs Blasted by Air Force, Fall to 4th Seed for MW Tourney

DON'T MISS

What Drives California’s Budget Decisions? A Lot of Politics, Not as Much Data

DON'T MISS

Brunson’s Broken Left Hand in Game 7 the Final Injury for Eliminated Knicks

UP NEXT

Beverly Hills Billionaires’ Bid to Overturn Farmworker Protections Sparks Legal Battle

UP NEXT

GOP Makes Noncitizen Voting a Key 2024 Campaign Issue

UP NEXT

WikiLeaks Founder Assange Wins Appeal Against US Extradition

UP NEXT

California Cracked Down After a Crash Killed 13 Farmworkers. Why Are Workers Still Dying on the Road?

UP NEXT

Jewish Lobby Presses California Lawmakers to Combat Antisemitism

UP NEXT

Where Do State Lawmakers Stand on War in Gaza, Campus Protests?

UP NEXT

$20 Billion: The Delta Tunnel’s New Price Tag

UP NEXT

Billionaires Urged NYC Mayor to Use Police on Columbia Protesters, Chats Reveal

UP NEXT

Psychedelic Therapy and Workers’ Rights Bills Fail to Advance in California’s Tough Budget Year

UP NEXT

Man Sentenced to 30 Years for Hammer Attack on Nancy Pelosi’s Husband

David Taub,
Senior Reporter
Curiosity drives David Taub. The award-winning journalist might be shy, but feels mighty with a recorder in his hand. He doesn't see it his job to "hold public officials accountable," but does see it to provide readers (and voters) the information needed to make intelligent choices. Taub has been honored with several writing awards from the California News Publishers Association. He's just happy to have his stories read. Joining GV Wire in 2016, Taub covers politics, government and elections, mainly in the Fresno/Clovis area. He also writes columns about local eateries (Appetite for Fresno), pro wrestling (Off the Bottom Rope), and media (Media Man). Prior to joining the online news source, Taub worked as a radio producer for KMJ and PowerTalk 96.7 in Fresno. He also worked as an assignment editor for KCOY-TV in Santa Maria, California, and KSEE-TV in Fresno. He has also worked behind the scenes for several sports broadcasts, including the NCAA basketball tournament, and the Super Bowl. When not spending time with his family, Taub loves to officially score Fresno Grizzlies games. Growing up in the San Francisco Bay Area, Taub is a die-hard Giants and 49ers fan. He graduated from the University of Michigan with dual degrees in communications and political science. Go Blue! You can contact David at 559-492-4037 or at Send an Email

Nelly Korda Triumphs at Mizuho Americas Open

11 hours ago

Sheriff’s Office to Break Ground on Memorial for Fallen Officers. What Will It Look Like?

11 hours ago

Hydrogen vs. Electric Batteries: A Case For Fresno’s Transportation & Ag Future

11 hours ago

Operation Gridlock: 32 Arrests, 59 Gun Seized, Violent Gangs Dismantled

11 hours ago

Bulldogs Blasted by Air Force, Fall to 4th Seed for MW Tourney

12 hours ago

What Drives California’s Budget Decisions? A Lot of Politics, Not as Much Data

13 hours ago

Brunson’s Broken Left Hand in Game 7 the Final Injury for Eliminated Knicks

13 hours ago

Students Stage Mass Walkout in Pro-Palestinian Protest, UC Academic Workers Authorize Strike

13 hours ago

Extremists Reign in Israel After Decades of Unchecked Violence

13 hours ago

Clovis East Alum DeChambeau Puts on a Show at PGA Championship, Falls 1 Stroke Short

14 hours ago

IDF Chief Rebukes Netanyahu Over Absence of Gaza Postwar Strategy

IDF Chief of Staff Herzi Halevi strongly criticized Prime Minister Benjamin Netanyahu in recent security discussions for his failure to devi...

6 hours ago

6 hours ago

IDF Chief Rebukes Netanyahu Over Absence of Gaza Postwar Strategy

10 hours ago

Will Becerra Run for Governor? He Tours UCSF Fresno With Costa

Image of Benjamin Netanyahu on a hill looking down on a West Bank neighborhood
10 hours ago

Israeli Defense Chief Opposes ‘Israeli Military Rule’ in Gaza

11 hours ago

Nelly Korda Triumphs at Mizuho Americas Open

11 hours ago

Sheriff’s Office to Break Ground on Memorial for Fallen Officers. What Will It Look Like?

11 hours ago

Hydrogen vs. Electric Batteries: A Case For Fresno’s Transportation & Ag Future

11 hours ago

Operation Gridlock: 32 Arrests, 59 Gun Seized, Violent Gangs Dismantled

12 hours ago

Bulldogs Blasted by Air Force, Fall to 4th Seed for MW Tourney

MENU

CONNECT WITH US

Search

Send this to a friend