Benefits January 18, 2005

NCPERS Says "No" to Social Security Privatization, Benefit Cuts

January 18, 2005 (PLANSPONSOR.com) - The National Conference on Public Employee Retirement Systems (NCPERS) on Friday unveiled what it called a new proposal for restoring the long-term financial integrity of the Social Security trust fund.
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According to a press release, NCPERS, the nation’s largest public pension organization, says it supports investing a portion of the Social Security trust fund in stocks and bonds, but through a new board of professional investment advisors, rather than at an individual level.

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The five-point initiative recommends investing 15% of the Social Security trust fund in equity market index funds, and 25% in state and local government bonds devoted “exclusively to rebuilding the infrastructure of cities, counties, and states,” according to NCPERS. Investment decisions would be made by a new, independent investment board to ensure the fund is professionally managed – and NCPERS estimates that the average return on such investments would be 8% a year over the long-term.

NCPERS says it believes that if Congress enacts these five principles, “the Social Security system would be solvent well into the 22nd century, without adversely affecting current recipients, future retirees, or the federal budget.”

NCPERS Executive Director Fred Nesbitt said the plan “is a better way of solving Social Security’s funding issue without either privatization or cutting benefits. Our plan recognizes the value of investing in the equities markets, but under the supervision of experienced, professional managers. This is a sound, safe approach that has been used by public pension systems with great success.”

Nesbitt also said that “NCPERS will soon present its proposal to the Bush Administration and members of Congress, and will testify at congressional hearings that will be held this year on revamping Social Security.”

Other points in the initiative include:

  • Invest 25% of the Social Security trust fund in state and local government bonds that are specifically designed to rebuild the infrastructure of our cities, counties and states . The investments would be phased in until 25% of the trust fund assets are invested. NCPERS estimates that the average return on such investments would be 5% a year over the long-term, would benefit state and local governments, and would help rebuild America, create jobs, and generate revenue.
  • Establish an independent investment board to oversee these new Social Security trust fund investments . Select firms through a competitive bidding process to ensure the funds are professionally managed, yet with the lowest possible administrative costs.
  • Create a new retiree Social Security COLA to reflect inflation costs affecting retirees . The current cost of living adjustment (COLA) following retirement is based on wage growth and does not accurately reflect inflation costs affecting retired Americans. This proposal would create a new Consumer Price Index-Retired (CPI-R) that would track inflation costs to preserve purchasing power against inflation once an individual started receiving Social Security benefits, though it would not change the calculation of the initial Social Security benefit levels, according to NCPERS.
  • Set the total wage base taxed by Social Security to 90% of nationwide earnings . Currently, the maximum payroll tax is $90,000 a year, which represents approximately 85% of nationwide earnings. While this increase would not affect middle- or lower-income workers, it would result in approximately six percent of highly compensated employees paying more in Social Security taxes.

You can read more about the NCPERS proposal at http://www.ncpers.org/artman/uploads/social_security_solution_001.pdf

NCPERS was founded in 1941 to protect public employees against an action by the federal government that would have wiped out public pension systems, replacing them with mandatory Social Security coverage, according to the organization.

Compliance January 14, 2005

Civil Rights Battle Brewing Over HIV Firing Appeal

January 14, 2005 (PLANSPONSOR.com) - Civil rights advocates are warning that a Denver federal judge's ruling that a blood bank was entitled to transfer an HIV-positive employee to a job with no donor contact could open disabled workers up to new workplace discrimination.
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>Plaintiff John Couture has appealed the August 2004 ruling by US District Judge Robert Blackburn dismissing his suit against the Bonfils Blood Center and several civil rights groups are trying to intervene in the case before the US 10 th Circuit Court of Appeals, according to an Associated Press news report.

According to the AP, Couture told a supervisor at Bonfils he had the AIDS virus in 2001, when Couture was training to take blood from donors. The two sides disagree about the circumstances of Coutre’s subsequent departure from Bonfils; the company said Couture resigned when he was offered the other job with no donor contact while he insisted his departure was against his will because he wanted to stay in the old job.

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dismissed Couture HIV discrimination suit, ruling that the worker hadn’t suffered harm because he voluntarily resigned and that he didn’t have legal standing to sue because his former employer had offered him a job with the same salary and benefits.

The civil rights groups have asked the 10 th Circuit for permission to intervene in the appeal, saying that Blackburn’s decision could open gaping holes in discrimination protections – a request Bonfils is opposing. “What the court is essentially saying is it’s not discriminatory to so-called laterally transfer those people to a back-office, stockroom job,” John Hummel, an attorney for The Center’s Legal Initiative Project, told the AP.

Couture, who said he hoped to use the blood bank job to start a medical career, now works as a dialysis technician. He said he first filed the lawsuit just to get his job back but now sees an opportunity for public education.

“There might be a slight decline (in blood donations) until they can get the word out there’s no way you can get HIV while giving blood,” he told the AP. “(Any perceived threat) is all supposition. The bottom line is, was my HIV status ever going to get out to the public? Probably not.”

Bonfils supplies more than 80% of the blood used in Colorado hospitals. The Supreme Court and lower federal courts have held that HIV infection is a disability, meaning the Americans with Disabilities Act bars employers from discriminating against HIV-positive plaintiffs.

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