Report: State and Local Pension Plan Funding Continues to Deteriorate

State and municipal employees' public pension funds have obligations that total, in the aggregate, almost 130 percent of state and local governments' annual budgets, according to a report released yesterday by the Manhattan Institute. On average, the assets available to meet these obligations fall well short of the amount necessary -- by some $1 trillion, even under such plans' own overly rosy growth assumptions. Since 2000, the report has found that such plans, in the aggregate, have gone from fully funded to 74 percent funded. In 2014, 63 percent of plans were less than 80 percent funded -- the level deemed "at risk" for private-employer pension plans under the Pension Protection Act -- and 20 percent were less than 40 percent funded. The report also said that public pension plans have markedly increased the risk profile of their investments. In 1952, public employee defined-benefit plans invested 96 percent of assets in cash and fixed-income investments; that percentage fell to 47 percent in 1992, to 27 percent in 2012, and to less than 19 percent in 2015.

Make sure to attend ABI's Annual Spring Meeting for a special presentation of "Eye on Bankruptcy" featuring experts examining the impact of public pension debt on the economy. Register here.

Commentary: Madoff Net Winners' Fate Turns on Outcome of Husky in the Supreme Court

By Bill Rochelle
ABI Editor-at-Large

The Supreme Court could make life miserable for so-called net winners in the Bernard Madoff Ponzi scheme, depending on how the justices rule in a case argued in the High Court on March 1. If the Supreme Court adopts the Seventh Circuit's reasoning about debts stemming from "actual fraud," Madoff's net winners may find themselves stuck with nondischargeable debts owing to the trustee and perhaps to other creditors. The case argued on March 1 was Husky Electronics Inc. v. Ritz.

For further perspectives by Bill Rochelle on important bankruptcy and circuit court cases, be sure to sign up for Rochelle's Daily Wire, appearing in ABI's Newsroom.

Analysis: Tracking the $110 Billion in Mortgage-Related Fines Paid by Big Banks

The nation's largest banks paid fines totaling about $110 billion for their role in inflating a mortgage bubble that helped cause the financial crisis, and an analysis by the Wall Street Journal today tracked how those funds were dispersed. Banks helped tens of thousands of homeowners with their mortgages in neighborhoods from Jacksonville, Fla., to Riverside County, Calif., funded loans for low-income borrowers, and donated to dozens of community groups and legal-aid organizations. Yet some of the biggest chunks of money stayed with the entity that levied the fines in the first place. Of $109.96 billion of federal fines related to the housing crisis since 2010, roughly $50 billion ended up with the U.S. government with little disclosure of what happened next, according to the Wall Street Journal analysis.

Upcoming Webinars Provide Update on New Bankruptcy Forms and the Importance of Pre-Bankruptcy Planning

Join us for two FREE and compelling abiLIVE webinars that both feature optional CLE!

- Enjoy a follow-up webinar on March 29 to our popular program from last year looking at the new bankruptcy forms (enacted on Dec. 1). Covered in this new program will be forms B 410 (proof of claim) and B 410 - A (supplement for a secured claim). Hear experts discuss the pros and cons of both new forms; attendees will have time to ask questions and provide feedback. Register here.

- When it comes to pre-bankruptcy planning, what is on your "checklist?" ABI's Business Reorganization Committee will be hosting a free abiLIVE Webinar on April 4 to help you identify potential pitfalls, privacy issues and a few tips on best practices. Register here.