1. Promoting Defined Benefit Pension Plans Hank Kim, Esq. National Conference on Public Employee Retirement Systems

2. Presentation Overview Introduction to National Conference on Public Employee Retirement Systems Past battles to preserve DB Battles ahead and applying lessons learned The new language of DB Wrap up and Q & As

3. NCPERS Largest nonprofit trade association representing 500 public sector DB plans Who we ARE: –Advocacy –Research –Education

4. 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

5. Test Your Knowledge of Public Pensions How many public pension plans are there in the United States? a.78 b.472 c.2656

6. Test Your Knowledge of Public Pensions How much money do public pension plans control? a.$300 billion b.$3 trillion c.$30 trillion

7. Test Your Knowledge of Public Pensions How many public servants are there in the United States?

8. Test Your Knowledge of Public Pensions How many public servants are there in the United States? a.14.1 million active/ 6.9 million retired

9. Test Your Knowledge of Public Pensions What is the average pension benefit of a retired public servant?

10. Test Your Knowledge of Public Pensions What is the average pension benefit of a retired public servant? a.$20,400 per year

11. Test Your Knowledge of Public Pensions How many Fortune 500 companies offer DB plans? a.none b.Less than half c.More than half

12. Public Pensions There has to be a balance: employer contributions, employee contributions, investment returns, and benefit-funding ratio

13. Past Battles Defined Benefit to Defined Contribution West Virginia Teachers (1990) Michigan State Employees (1997) Alaska (July 1, 2006)

14. Past Victories DC to DB North Dakota (1977) Nebraska (2000) West Virginia Teachers (2005) [61% voted to return to DB plans]

15. Past Victories (cont.) Preserving DBs Florida (2000) - optional California (2005) Colorado (2006)

16. The Battles Ahead Three Alarms – direct threats (5) Alaska – working to overturn Arizona – DC bills introduced Kentucky – commission to review benefits Rhode Island – state-wide two-tier system proposed plus Providence has DC proposal Utah – DC proposal for select new hires

17. The Battles Ahead Two Alarms – significant threat (12) California Hawaii Illinois Michigan Minnesota Montana New Jersey Oklahoma Ohio Oregon Virginia Wisconsin

18. The Battles Ahead One Alarm – potential threat (19) AlabamaColorado Connecticut IndianaKansasLouisiana MarylandMassachusettsMississippi NevadaNew HampshireNew Mexico New YorkNorth CarolinaPennsylvania South CarolinaTexasWashington West Virginia

19. Are you concerned? 36 states’ public pension systems are in play today!

20. California Battle-Lessons Learned ELIMINATE DB PLANS: Governor proposed ballot initiative Legislator introduced bill Coalition of concerned groups Powerful DB message Stayed on message

21. Alaska Battle-Lessons Learned Eliminate DB Plans (7/06): Legislation (short session) Legislature kept in session Groups slower to organize Message not as clear

22. Colorado Battle-Lessons Learned Bill to eliminate DB plans Ballot initiative proposed Groups overcame differences and formed an effective coalition Got buy-in from all stakeholders Legislative compromise deflated ballot initiative

23. Download DB Tools www.NCPERS.org NCPERS Research Fact sheets Myths and Facts Testimonials Updated information

24. Download DB Tools www.NCPERS.org NCPERS Research Fact sheets Myths and Facts Testimonials Updated information

25. Download DB Tools www.NCPERS.org NCPERS Research Fact sheets Myths and Facts Testimonials Updated information

26. Download DB Tools www.NCPERS.org NCPERS Research Fact sheets Myths and Facts Testimonials Updated information

27. Download DB Tools www.NCPERS.org NCPERS Research Fact sheets Myths and Facts Testimonials Updated information

28. Messages That Work Elimination of death & disability benefits Traditional pensions are a tried and true system that benefit taxpayers New system will be costly and chaotic

29. Messages That Work Use analogies and best face of public service : mortgage public safety heroes

30. What’s the Problem? Total unfunded liability of public funds is $350 billion (2,656 systems) Americans owe $8.8 trillion in mortgages! Should we abolish home mortgages?

31. What’s the Problem? Our plans are funded at 87%. If you had 87% of your mortgage paid off – would anyone consider you in financial trouble?

32. Things to Remember Not a debate on the merits of DBs—it’s a media battle! Educate constituents early and often Build coalition with other stakeholders Have emotional stories and sympathetic figures Stay on message

33. NCPERS 2007 Educational Programs Legislative Conference February 5-7 in Washington, DC Trustee Educational Conference May 18-19 in Honolulu, HI Annual Conference May 20-24 in Honolulu, HI Program for Advanced Trustee Studies July 26-27 in Cambridge, MA (HLS) Public Sector Health Care Symposium October 1-3 in Chicago, IL Public Safety Employee Pension & Benefits Conference October 14-17 in Palm Springs, CA

34. For More Information NCPERS 444 North Capitol Street, NW, Suite 221 Washington, DC 20001 info@NCPERS.org 1-877-202-5706