Final Exam Study Guide Essay Example for Free

Final Exam Study Guide Essay 1. The Final Exam is open book, open notes. The maximum time you can spend in the exam is 3 hours, 30 minutes. If you have not clicked the Submit for Grading button by then, you will be automatically exited from the exam. In the Final Exam environment, the Windows clipboard is disabled so you will not be able to copy exam questions or answers to or from other applications. 2. You should click the â€Å"Save Answers† button in the exam frequently. This helps prevent connection timeouts that might occur with certain Internet service providers and also minimizes lost answers in the event of connection problems. If your Internet connection does break, when you reconnect, you will normally be able to get back into your Final Exam without any trouble. Remember, though, that the exam timer continues to run while students are disconnected, so students should try to log in again as quickly as possible. The Help Desk cannot grant any student additional time on the exam. 3. See Syllabus Due Dates for Assignments Exams for due date information. 4. Reminders You will only be able to enter your online Final Exam one time. Click the Save Answers button often. If you lose your Internet connection during your Final Exam, log on again and try to access your Final Exam. If you are unable to enter the Final Exam, first contact the Help Desk and then your instructor. You will always be able to see the time remaining in the Final Exam at the top right of the page. 5. Assessments With Multiple Pages Make sure you click the Save Answers button before advancing to the next page. (We also suggest clicking on â€Å"Save Answers† while you are working.) Complete all of the pages before submitting your Final Exam for instructor review. Do NOT use your browsers â€Å"Back† and â€Å"Forward† buttons during the Final Exam. Please use the provided links for navigation. 6. Submitting Your Final Exam When you are finished with the Final Exam, click on the Submit for Grading button. Please note: Once you click the Submit for Grading button, you will NOT be able to edit or change any of your answers. 7. Exam Questions There are 11 randomly selected multiple-choice questions each worth 5 points for a total of 55 points. There are seven randomly selected essay questions each worth 35 points for a total of 245 points. The Final Exam covers all course TCOs and Weeks 1–7. The Final Exam contains two pages, which can be completed in any order. You may go back and forth between the pages. The Final Exam questions are pooled. This means that not everyone will have the same questions. Even if you do have some of the same questions, they may not be in the same order. These questions are distributed amongst the TCOs. The entire exam is worth 300 points. On the essay questions, your answers should be succinct, fully address each part of the question, and demonstrate your knowledge and understanding in a concise but complete answer. Most essay questions require answers that are a couple of paragraphs (not a couple of sentences) that directly speak to each part of the question. Some students opt to work on the essay questions first due to their higher point value and length of time needed to adequately address each question, but this is entirely your choice. Remember to always use proper citation when quoting other sources. This means that ANY borrowed material (even a short phrase) should be placed in quotation marks with the source (URL, author/date/page #) immediately following the end of the passage (the end quote). Changing a few words in a passage does NOT constitute putting it in your own words, and proper citation is still required. Borrowed material should NOT dominate a student’s work but should only be used sparingly to support your own thoughts, ideas, and examples. Heavy usage of borrowed material (even if properly cited) can jeopardize the points for that question. Uncited material can jeopardize a passing grade on the exam. As a part of our commitment to academic integrity, your work may be submitted to turnitin.com, an online plagiarism checking service. So please be VERY mindful of proper citation. Essay questions: The essay questions included in this test focus on the key questions the network designer will face. For  example, a question might ask you which of several different ways to solve a problem you would select and why. A question might ask why a network design is done in a certain way. What are the advantages and disadvantages of the design? Finally, a question might ask you to apply some part of a commonly used design methodology, such as the top-down network design method. 8. Some of the key study areas are below. While these are key areas, remember that the exam is comprehensive for all of the assigned course content, and this study guide may not be all inclusive. 9. Areas that were discussed in the threads will be prime targets. 10. Assignments will also be prime targets for revisiting. 11. Reviewing the TCOs, which I have listed below for your convenience, will also be a great preparation for the Final Exam. 1 Given a set of requirements for a modern enterprise business organization, diagram and simulate network solutions consisting of functional modules and hierarchical layers with respect to intelligent network services, protocols, and topologies using a network design and simulation tool such as NetCracker or OPNET. 2 Given a team situation and top-down network design tools, analyze and document customer organizational and technical goals, policies, requirements, and constraints as inputs to the network design process. 3 Given a team situation and a set of network design requirements for a modern enterprise business organization, design and connect the hierarchical and enterprise composite network models into specific topologies that meet customer requirements using a network design and simulation tool such as NetCracker or OPNET. 4 Given a team situation and a set of network design requirements for a modern enterprise business organization, select and design enterprise campus network topologies consisting of multi-layered-modularity, geographical borders, existing traffic flows, and planned application traffic flows using a network design and simulation tool such as NetCracker or OPNET. 5 Given a team situation and a set of network design requirements for a modern  enterprise business organization, select remote user and redundant service access technologies that meet project design requirements. 6 Given a team situation and a business case for an enterprise business organization, select a voice over IP (VoIP), IP telephony, or multimedia solution appropriate for a converged network design that meets project goals. 7 Given a team situation and a set of network design requirements for a modern enterprise business organization, assess legal compliance; disaster recovery; and security risks, threats, and vulnerabilities within each modular block of the enterprise composite network model. Finally, if you have any questions for me, please post them to our Q A or e-mail me. Good luck on the exam!

Management of Self-harm Patients in AE

Management of Self-harm Patients in AE The acute incident was a case of ‘deliberate self-harm’ (DSH), admitted to an A E unit. DSH incorporates deliberate non-habitual acts of self-harm that are not fatal, and may or may not involve attempted suicide (Repper, 1999). Emergency departments provide the main ‘entry point’ for such patients (NICE, 2004). The patient in this case had slashed his wrists in several places, severing a key artery. He was bleeding profusely, and in a semiconscious state on arrival. There was a history of psychopathology dating back several years. He was unmarried, lived alone, and had recently undergone treatment and observation at the forensic mental health unit of a local NHS Hospital Trust. Reppers (1999) review of the relevant literature on the management of self-harm patients in A E units highlights several key issues for nursing care. It is essential that the qualified nurse is cognisant of the relevant Codes of Professional Conduct specified by the Nursing Midwifer y Council (NMC, 2002), including ethical concerns such as respect, confidentiality, and trust. This is particularly crucial when dealing with self-harm patients because research suggests that emergency department nurses often hold negative attitudes towards this type of patient (McAllister et al, 2002). Furthermore, self-harm patients have reported dissatisfaction with the care provided by nurses and other health care staff. The empirical literature on the management of self-harm patients in A E highlights the value of problem-solving approaches to patient care (Repper, 1999). The basic problem-solving model incorporates five principles, outlined in Table 1. These tenets are consistent with protocols for effective decision-making, for both individuals and groups (Janis Mann, 1977). They are also consistent with NICE/DOH guidelines for caring for the mentally ill (NICE, 2004, Clinical Guideline 16). NICE guidelines recommend immediate assessment of risk, and mental, physical, emotional stability, once a patient arrives at A E. Staff are then required to account for underlying emotional factors that may have precipitated the self-harm episode, as well as evaluating the seriousness of the injury, before deciding the most appropriate treatment for the patient. Reesal et al (2001) highlight some of the key principles of management that are relevant to nurses working with mental health patients. These relat e to assessment, phases of treatment, psychiatric management, goals of treatment, psychotherapeutic management, the management of medication and self-harm/suicide, and medical-legal issues (also see DOH, 1999; NICE, 2004). Nurses need to conduct a comprehensive psychosocial assessment, in full cognisance of the biological, psychological, and social context, and also precipitating and perpetuating factors. Mental health problems can often be long-term/chronic, rather than short/acute, and self-harm is no exception. An underlying condition like depression can be conceptualised in terms of three treatment phases – response, remission, and relapse. Principles of psychiatric management dictate that consent must be obtained prior to treatment. A good psychiatric-patient rapport is essential, and treatment must involve a multidisciplinary team, of which nurses are an essential part. Goal setting is paramount as it facilitates the development of a treatment plan and allows the patien ts progress to be evaluated more accurately. Psychotherapy can be based on any one of several models (e.g. cognitive-behavioural, interpersonal, dynamic). Recovery must be closely monitored – patients who have not recovered within 2 months may require a change in treatment modality. Some knowledge of pharmacology is essential for effective medication management, but it is usually up to a psychiatrist to prescribe the necessary medication. In managing suicide/self-harm cases, it is important for the nurse to establish whether the patient â€Å"feels desperate, hopeless, helpless, or is tired of struggling with life. Has the patient not wanted to go on living? Is there active suicide ideation? How strong are the thoughts? How frequent, persistent, and irresistible are they? Is there a plan? Do the means and opportunities exist? How impulsive is the patient?† (Reesal et al, 2001, p.25S). Since self-harm episodes are generally unpredictable, there are bound to occur irrespective of psychosocial assessments and psychiatric management. Salient issues for inpatient management (see Table 2) include safety, crisis intervention, di agnosis, patient response to treatment, level of depression, inability to live effectively at home, and the level of social support (i.e. friends, family). Medical-legal issues include confidentiality, risk assessment, information sharing, truth telling, and liability. Some of these are considered later in this essay. Overall, patients must believe they are receiving equity, justice, and consideration, and that clinical management is set up to facilitate good quality care. Ethical and legal issues in the management of mental health patients are outlined in the Nursing and Midwifery Council’s codes of conduct (NMC, 2002), the National Service Frameworks (NSF) Modern Standards and Service Models for mental health patients (DOH, 1999), and the National Institute for Clinical Excellence (NICE, 2004). There is currently strong emphasis on evidence-based nursing practice (NICE, 2004). Clinical decisions, where possible, should be based on good quality empirical research. The NICE Clinical Guidelines No.16, for the care of self-harm patients, are rooted in scientific evidence. It is therefore incumbent on nurses to ensure that decisions about all aspects of patient care comply with these standards. Thus, for example, nursing staff are compelled to consider using an integrated physical and mental health triage scale, establish physical risk and mental state, and offer psychosocial assessment at triage. The problem here concerns the practical realities of guidelines adherence in a busy A E unit. Due to time constraints and hectic work routines, nurses may be unable to check adherence to standards. Senior nurses may rely more on their clinical experience in certain instances, whereas younger nurses finding it easier to consult colleagues for clarification, rather than locate and check practice standards. While guidelines will help ensure that this patient receives good quality health care, nurses and other health professionals will ultimately responsibility for clinical decisions. It is therefore essential that staff are adequately trained and resourced to make informed choices that are in the best interests of the patient. Decision theorists Janis and Mann (1977) propose that such informed decision making requires that a viable clinical solution is perceived to be available, to deal with the patients problem, and that there is adequate time in which to find it. If a nurses is uncertain what to do, perhaps due to inadequate training, lack of guideline information, or unfamiliarity with self-harm patients, then he or she may resort to ineffectual decision strategies, such as delaying treatment, looking for another nurse to take responsibility, or even discounting the severity of the patients condition. Time constraints can be a serious problem in emergency depart ments, where patients arrive with life-threatening injuries, and nurses are required to make multiple clinical decisions, in quick succession. Severe time limits may induce panic or frantic behaviour in clinical staff, leading to hasty clinical decisions that fail to account for all aspects of the patient’s clinical condition. In 2005 the Department of Health published its Patient Led NHS (DOH, 2005). Central to this discourse is the notion of empowerment – enabling patients to have more say in clinical decisions about their care, by providing them with the all relevant information, support, and guidance. This is consistent with the 1983 Mental Health Act which states that patients are provided with all necessary and correct information by an informed health care professional, for example on the nature, purpose and probable effects of treatments, and detention, renewal, and discharge. Thus, the patient in A E will have to be treated accordingly by nursing staff. The Department of Health has encouraged the faster emergence of best practice guidelines (DOH, 2005), as this is key to successful empowerment. Currently there are no commissioned best practice statements for the care of mentally ill, or specifically those who self-harm. Since the devolution of responsibility from health authorities to loca l primary and secondary care trusts (DOH, 2002a, 2002b), nurses have assumed greater responsibility implementing national guidelines on mental health. An important part of this empowerment is to liase or network with relevant multidisciplinary professionals, agencies, and local communities. Nurses working in mental health view networking as a major area of responsibility (Rask Hallberg, 2005). Thus, emergency department staff dealing with this particular will be required to contact social services, and the patients’ GP/PCT, friends, family, employment, and other relevant parties. Where necessary, partnerships can be set up, for example with local primary care or social service units, to arrange particular aspects of care, such as home visits, 24 hour access, and development of care plans. The NMC Code of Professional Conduct (NMC, 2002) states that nurses are to behave in a way that enhances trust and confidence in the patient. In other words it is incumbent on a nurse to be truthful and keep his or her patients’ confidence (Tschudin, 1992; Rumbold, 1999; Reesal et al, 2001). Yet in reality this may pose a very difficult ethical dilemma. During psychosocial assessment nurses often need to obtain personal information from the patient, information that the patient will not normally share with anyone. Patients may divulge information on the understanding that it would be kept in confidence. However, serious problems arise if a patient expresses an intention to reattempt self-harm, or even suicide. Is it ethical for the nurse to share this information with other staff and relevant authorities? The NMC (2002) Codes of Conduct are inherently contradictory, because on the one hand they require nurses and midwifes to â€Å"protect confidential information† (p.11 ), but on the other hand mandate that staff â€Å"must act to identify and minimise the risk to patients and clients† (p.11). Crow et al (2000) argue that effective handling of this dilemma requires an understanding of the patient’s own cultural background and general worldview. It is essential for a patient to sign release forms stating that he or she wishes to be present during information-sharing, and takes responsibility for the clinical consequences of such information. Nurses must take extra care when dealing with patients whose cultural backgrounds denotes different understandings of truth and presents linguistic barriers, â€Å"Frequently, when patients from other cultures are asked if they understand something, they nod yes and smile amicably. However, do they really understand what is being stated.., and does it make sense from their cultural perspective of truth?† (Crow et al, 2000). A break down of trust, through truth telling without consent, may aggravate the patients’ psychological state, precipitating the very outcomes the nurse is trying to prevent. And trust can be difficult to generate if nurses fail to develop a good rapport with patients. Long (1998) points out that nurses are often expected to apply nursing models, such as the Activities of Daily Living (ADL) (Rask Hallberg, 2000), in developing and executing a care plan. Such frameworks of care seem at odds with experiences of someone who wishes to commit self-harm a nd possibly suicide. Normal daily activities would be anything but ‘normal’. Moreover, the application of academic models to such situations creates a sense of detachment from the patient, so that an â€Å"‘I-It’ relationship, takes priority over the person in need of care, and in need of developing a therapeutic ‘I-thou’ relationship† (p.5). RISK ASSESSMENT STRATEGIES NICE (2004) guidelines stipulate that self-harm patients undergo a comprehensive risk assessment. This must include an identification of the fundamental clinical and demographic factors that are implicated in the risk of further self-injury. According to Reesal et al (2001) these may include staff attitudes, the presence of anxiety, agitation, panic attacks, persistent global insomnia, anhedonia and poor concentration, feelings of hopelessness/helplessness, substance abuse (alcohol, drugs), impulsivity, being male and aged between 20-30 years or over 50 years, or female aged between 40 and 60 years, being older, having a history of self-harm or suicide attempts, and/or a family history of self-harm, or suicide attempts. The NICE (2004) also require an identification of depressive symptomatology. Nurses carrying out risk assessments must always use a standardised risk assessment scale. Decisions about referral, discharge and admission are partly based on the outcome of risk evaluation s. Crowe and Carlyle (2003) argue that risk assessment in mental health care reflects a form of clinical governance, driven more by organisational, financial, political, and legal considerations, than by concern for patient welfare. For example, risk assessment forms part of professional standards for nurses, and failure to adhere to this requirement in patient care increases clinician liability if a patient (or their family) decides to sue for negligence (Samanta et al, 2003). The result is that the welfare of the patient may not be accorded the priority it deserves. QUALITY ASSURANCE Central to quality assurance is the notion of clinical governance (Ayres et al, 1999; NHS Executive, 1999; Hungtington et al, 2000). The purpose of clinical governance is to maintain the quality of service delivery. This is particularly crucial in A E units, where critical incidents, such as the mismanagement of a badly injured self-harm patient, can easily lead to death. As Huntington et al (2000) point out, this situation, combined with a proclivity for staff to protect their reputation, can engender a culture of blame, scapegoating, and secrecy, all of which may hinder improvements in the quality of patient care (NHS Executive, 1999). Governance typically entails organisational change, from a ‘blame culture’ to a ‘learning’ orientation. Of course such change is subject to the usual organisational restraining factors that Kurt Lewin (1951) refers to in his model of change. These include excessive staff workloads, a â€Å"not another cha nge† attitudes, and general reluctance to give up ‘tried and tested’ practices, time constraints, and patient inconvenience. The critical issue in an A E is whether staff consistently adhere to professional standards of care, as prescribed by NICE (2004), the Royal College of Psychiatrists, and the National Service Framework for Mental Health (DOH, 1999). Nurse attending to a self-harm patient will need to ensure that they are familiar with these guidelines before attending to the patient, or at least have quick assess to relevant information, and/or are supervised by a more experienced colleague with better knowledge of professional standards. This is essential as failure to adhere to professional standards has major legal implications (Samanta et al, 2003; Wilson, 1999). Although clinical governance leaders within acute and community NHS trusts have a responsibility to ensure that nursing staff deliver good quality care, such governance can only be effective wi th adequate resourcing (Huntington et al, 2000). For example, there needs to be clarity from professional bodies about best practice (there are currently no best practice statements for the care of mentally ill/self-harm patients), as well as support from health authorities, and clinical governance leaders at regional office, professional, and local district levels. This essay considers nursing issues in the management of a self-harm patient admitted to an emergency department unit of an NHS Trust. Salient issues for the qualified nurse include ethical dilemmas, associated with conflicting codes of conduct, important management issues relating to assessment, diagnosis, psychological and medical treatment, in-patient care, and medical-legal considerations. Nurses now command greater empowerment in the modern NHS, and but must somehow adhere to strict professional standards, while simultaneously exercising good clinical judgement. Additionally, they must also manage to overcome the unique clinical and psychological circumstances of deliberate self-harm. Support from clinical governance leaders, and adequate training in management, decision making skills, and clinical practice, are essential, if nurses are to delivery high quality patient care References Ayres, I.L., Cooling, R. Maughan, H. (1999) Clinical governance in primary care  groups. Public Health Medicine. 2, pp.47-52. Crow, K., Matheson, L. Steed, A. (2000) Informed consent and truth-telling:  cultural directions for health care providers. Journal of Nursing  Administration. 30, pp.148-152. Crowe, M. Carlyle, D. (2003) Deconstructing risk assessment and management in  mental health nursing. Journal of Advanced Nursing. 43, pp.19-27. DOH (1999) National Service Framework for Mental Health: Modern Standards   Service Models. London: Department of Health. DOH (2002a) National Service Framework: A Practical Aid to Implementation in  Primary Care. London: Department of Health. DOH (2002b) Improvement, Expansion Reform – the next 3 Years: Priorities and  Planning Framework 2003-2006. London: Department of Health. DOH (2005) Patient Led NHS. London: Department of Health. Horrocks, J., House, A. Owens, D. (2004) Establishing a clinical data base for  hospital attendances because of self-harm. Psychiatric Bulletin, 28, pp.137-139. Huntington, J., Gillam, S. Rosen, R. (2000) Clinical governance in primary care:  organisational development for clinical governance. British Medical Journal.  321, pp.679-682. Janis, I.L. Mann, L. (1977) Decision Making: A Psychological Analysis of Choice,  Commitment. New York: Free Press. Lewin, K. (1951) Field Theory in Social Science. New York: Harper Row.   Long, A., Long, A. Smyth, A. (1998) Suicide: a statement of suffering. Nursing  Ethics. 5, pp.3-15. McAllister, M., Creedy, D., Moyle, W. Farrugia, C. (2002) Nurses attitudes  towards clients who self-harm. Journal of Advanced Nursing. 40, pp.578-586. NICE (2004) Self-Harm: The Short-Term Physical and Psychological Management  and Secondary Prevention of Self-Harm in Primary and Secondary Care  Clinical Guideline 16. London: National Institute for Clinical Excellence.   NHS Executive (1999) Clinical Governance in the new NHS. London: NHS  Executive (HSC 1999/065). NMC (2002) Code of Professional Conduct. London: Nursing Midwifery Council. Rask, M. Hallberg, R. (2000) Forensic psychiatric nursing care – nurses  apprehension of their responsibility and work content: a Swedish survey.  Journal of Psychiatric Mental Health Nursing. 7, 163-177. Reesal, R.T., Lam, R.W. the CANMAT Depression Work Group (2001) Clinical  guidelines for the treatment of depressive disorders: Principles of Management  II. The Canadian Journal of Psychiatry. 46 (Suppl 1), pp.21S-28S. Repper, J. (1999) A review of the literature on the prevention of suicide through  interventions in Accident and Emergency Departments. Journal of Clinical  Nursing. 8, pp.3-12. Rumbold, G. (1999) Ethics in Nursing Practice (3rd edition). London: Balliere Tindall. Samanta, A., Samanta, J. Gunn, M. (2003) Legal considerations of clinical  guidelines: will NICE make a difference? Journal of the Royal Society of Medicine. 96, pp.133-138. Tschudin, V. (1992) Ethics in Nursing: The Caring Relationship (2nd Edition).  London: Heinemann. Wilson, J. (1999) Best practice guidelines. British Journal of Nursing. 8, pp.293-294.

Relationships: Now and Then :: Marriage Puritans Essays

Relationships: Now and Then Do we still live in the seventeenth century? It’s very interesting to look back at the differences and similarities in men’s and women’s relationships since then. My husband, Sean, and I were brought up very differently; he was only raised by his mother who provided everything for him food, shelter, and love whereas I had the more traditional family in being raised by both parents. My father was the provider, a construction worker who worked long hours five to six days a week, and my mother, a homemaker, tended the home doing the cooking, cleaning, and also caring for us children. Now that I’m older and have my own husband and children, I find myself using the traditional traits that I’ve seen and learned from my parents. Tending to my husband’s and children’s every need not only seems to be a normal feeling, but it’s a natural instinct for me. According to Edward S. Morgan in The Puritan Family: Religion and Domesti c Relations in Seventeenth-Century New England, â€Å"In each relationship God had ordained that one party be superior, the other inferior†¦.Wives were instructed that woman was made ultimately for God but immediately for man†¦.† In living in the twenty first century, relationships seem to be better now than they were in the seventeenth century. Men and women today are marrying for love and happiness, and also building their lives together as a team whereas the Puritans married because it was a law of God where the husband was in charge of his wife and being happy didn’t exist. Marriage in seventeenth century New England meant that duties were forced upon both husband and wife. It was the husband’s duty to support his wife and family, and the wife’s duty to care for her husband and tend to his home. Morgan states, â€Å"When [a woman] became wife, she gave up everything to her husband and devoted herself exclusively to managing his household.†¦ her duty was to ‘keep at home, educating her children, keeping and improving what is got by the industry of the man.’† Personally, I couldn’t see myself passing anything to my husband and after we got married I didn’t. While the little I did own continues to be mine, whatever we own now became ours whereas being a Puritan wife meant owning nothing and being owned.

The Fungi Formerly Known as Dentinum Repandum :: Hydnum Repandum Fungus Essays

The Fungi Formerly Known as Dentinum Repandum This paper will cover a description of Hydnum repandum, its ecology, and some research involving the species. The first topic to be discussed in this paper is a description of Hydnum repandum, which was until recently referred to as Dentinum repandum. The description of the fungi will start with the appearance of H. repandum, and will be followed by the life cycle of the noted species. The appearance of Hydnum repandum is quite unique. The stipe of the fungi can range from two to seven centimeters tall, and one to three centimeters thick (Wood). The surface of the stipe can range from cream to yellow in color, and is dry and smooth. The cap of the mushroom is two to ten centimeters broad, with a smooth, dry surface (Graham 84). The caps color can range from cream to orange. It has a thick flesh that is very brittle, with a mild taste and odor. The hymenophore has teeth that are 0.4 to 0.6 centimeters long. They are cream colored, and also brittle (Wood). The life cycle of Hydnum repandum is fairly simple, as you can see from Figure 2. It falls into the subdivision of Eumycota, called Basidiomycotina (Ross 18). This group contains many large, fleshy fungi, To begin this discussion on the life cycle of Hydnum Repandum, this text will start with the basidiospore germination (Webster 295). This results in a haploid mycelium with a single nucleus in each cell. It is then referred to as the monokaryon, or the primary mycelium (Ross 141). Following this, two genetically different thalli come together, and the nuclei move from one thallus into another. The migration of nuclei usually results in both of the thalli becoming dikaryotic (Ross 142). This nuclear migration is very quick, and every hyphal tip becomes binucleate. The subsequent growth of the mushroom is all dikaryon (Ross 143). The next step includes the two nuclei of the dikaryon fusing through karyogomy (Ross 146). The resulting diploid zygotic nucleus then undergoes meiosis, and four haploid nuclei are formed in the basidium (Webster 280). The haploid nuclei move into projections on the basidium, which turn into spores. The spores are attached to the sterigmata until they are released (Ross 146). The cycle then starts over again. The next topic for discussion in this paper is ecology. This will include, preferred habitats and interactions with abiotic and biotic elements of the environment.

Women in Literature :: Essays Papers

Women in Literature The Arizona Territory was a beautiful and impressive area that deserved to have exquisite writings to represent the land. It was particularly the men who were allowed to publish their thoughts. Women’s writings were not looked upon as scholarly and not published for public enjoyment. In the late 1800's and early 1900's women's literature was underrepresented. The ideas of women and their creativity was discouraged. In Southern Arizona, this discouragement existed for a variety of reasons. Some of these reasons attributed to this was that there were more limiting resources, an overabundance of women who were illiterate, and geography. Despite these and other stumbling blocks, two women overcame the odds and are seen as great women authors and literary achievers. Sharlot Hall and Frances Gillmor proved that women had a great deal to convey and exhibited the talent of literary expertise to accomplish their goals. Not only do they write about beauty and harmony, they write ab out the conflicts with the Indians and the hardships that other cultures had to endure in Arizona. One reason that few women published literature was because they came to Arizona primarily with their husbands who were in the Army and needed to relocate. These women, who came from populated and larger cities, were exposed to a different way of life in Arizona. There were few educational facilities in the west to teach young ladies about literary traditions. A lot of these women had to take care of themselves, their children, growing food and teaching. They were rooted to the same spot, sometimes for months at a time. This deprived them of a lot of mental stimuli that may have gotten in more populated areas.(1 pg. 48) Therefore sheltered women in Arizona were not encouraged to write stories or poems. Not that they didn’t know how, they told stories all the time. Children loved to hear the stories of their mothers lives and backgrounds. Women just never knew there was a medium to get their work out, so that more than just their children were partial to stories and poems o f landscapes and journeys across many different lands. There is a wealth of information about Ms. Sharlot Hall. Her life was very complex and together it all ties together to tell the story of her fame.

Relevance of Earlier Warfare to Modern Warfare Essay

The art of War has been the subject of great scholarly activity as the attributes that make a person a skilled Commander in times of War have arose great curiosity amongst statesmen, generals and philosophers alike. More surprisingly, the advent of modern warfare has cast a shadow of fallacy on the minds of many individuals and has made them to believe that the current military professional has nothing to learn from the great commanders of the past as he is too â€Å"well equipped† to dwell on such detail. The truth is that history is the best teacher and as this paper progresses, I will be utilizing historic references to explain my point of contention that there is still a lot to learn from the likes of Fredrick the Great, Napoleon and Ulysses Grant. Argument The first and foremost evidence to support my thesis is that there is similarity between the goals of the current military professional and his counterpart from centuries ago. This similarity is more profound if you find yourself fighting for the same ideals, the same land and the same enemy. It is this similarity between the two that allows the current military professional to reassess himself in light of what is happening today. For example, according to Adam Hart – Davis (2007), the prime reason for the fall of Napoleon was that he invaded Russia, in the year 1812 (P. 179). The Russian Generals tactfully withdrew from territory destroying their own towns, farms, cultivation and infrastructure along the way. A month after defeating the Russians outside Moscow, Napoleon decided to retreat back to Paris out of concern of loss of control. However, his decision to do so in the winter proved fatal as the lack of shelter and infrastructure killed his troops physically and mentally. The Russians kept pursuit of the retreating forces and managed to kill scores of them. By the time Napoleon managed to get back home, all that was left of his army was a demoralized handful of men against an efficiently trained numerous force that had left Paris with him on the way to Russia earlier that year, contributing to his eventual fall in 1815. According to Gilbert (2004), a 130 years on, Hitler made the same mistake when he invaded Russia in 1941 just when the harsh winter started (P. 249). The Russians employed the same strategy and after defeating the Germans at the siege of Moscow and Stalingrad, they chased the retreating German forces back into Germany proper and were instrumental in the fall of Berlin and the end of the Nazi regime itself. Thus, had Hitler paid attention to the fault at which his predecessor had been, there was a great probability that he would not have met the end that he did in 1945. The second point of argument is that although how we conduct warfare these days has changed, the strategy or tactfulness has not. No matter what resources in weaponry and personnel that a general may have at his disposal, there is no denying that as far as tact is concerned, there is always a lot to learn. Consider Fredrick the Great who, in 1756, fearing a joint attack by major European powers including Russia, Sweden, and Hapsburg Austria etc launched a pre-emptive strike on its neighbors. According to The strategy was of immense benefit as he was able to destroy part of the hostile forces that allowed moral and tangible support when confronted by a full scale invasion. According to Adam Hart Davis (2007), the same strategy was followed by Israel in 1967 when on rumors of a joint Arab attack on her lands compelled her to make a pre emptive strike on Egypt, Syria and Jordan (P. 353). The result was that Israel doubled its land area in just six days by capturing the Sinai Peninsula, the West Bank and the Golan heights. Again, what mattered was not the advanced weaponry that Israel had but the line of thought that was mutual between Fredrick the Great in 1756 and the Israeli leadership of 1967. Another example is the use of landscape and climate by the Russian Tsar Alexander in 1812 against Napoleon and by the Russian leader Joseph Stalin in 1941 against Nazi Germany. This use of the climate is yet to be seen again but, according to Adam Hart – Davis (2007), the use of the terrain and the landscape by the Viet-Cong against American forces in Vietnam and the Afghan Guerrillas against Soviet troops in Afghanistan enforces my point that tact is something which can be learned from the great Generals of the past (P. 355, 373-4). The last reason to support my thesis is that the rules of engagement have not changed as weaponry or tools have improved and not changed completely. This calls for a more proactive approach as to how we address the issue at hand, namely, whether the current military professional stand to benefit from the study of the Great generals of the past. Consider an example. The Trojan War, as depicted by Homer in the Iliad and the Odyssey, could be the first example in warfare history of deception. Whereby the Trojan horse was meant to be a gift, it turned out to be a mechanism as to how the Athenian forces enter the city. Contrast this with reports that in the run up to the 2003 Second Gulf War. According to Sifry and Cerf (2007), American intelligence agencies planted false evidence to make Saddam Hussein believe that the coalition attack would come from Turkey and not from the Southern neighboring countries of Kuwait and Saudi Arabia (P. 114). This forced Saddam to place more battalions to defend the Northern front than would have been necessary. Thus, it can be argued that weaponry or tools, to a large extent have remained the same in nature but have changed in form. Guns have replaced swords but their use remains the same. Cannon guns have been replaced but their use remains the same. The Trojan horse has been replaced by false intelligence and thus the use remains the same. In the end, the point of contention is that if the tools at hand for the general have only changed in form and not in substance, there is every reason to believe that the current military professional stands to benefit a lot by studying his counterparts from centuries ago. Conclusion Thus, as can be seen, there is still a lot for the current military professional to learn from his predecessors. The reasons are that situations repeat themselves, tactfulness is an attribute that can be readily applied and does not wither with age and the use of the tools at the military disposal remains the same. It can be argued, thus, that the greatest armies of our time will not be those that have the most advanced weaponry but those with the best Generals who happen to know the history of those before them yet alike them. Adam Hart – Davis (2007). History: The Definitive Visual Guide from the Dawn of Civilization to the Present Day. London: Dorling Kindersley. Gilbert, M. (2004). The Second World War: A complete History. London: Henry Holt and Co. Sifry, M. & Cerf. C. (2007). Iraq War Reader: History, Documents, Opinions. . New york: Simon & Schuster

Challenges in Pension Reform

CHALLENGES IN PENSION REFORM A RESEARCH PROJECT SUBMITTED TO THE FACULTY OF NATIONAL UNIVERSITY IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF PUBLIC ADMINISTRATION NOVEMBER 2012 By James Michael Sandburg Capstone Project Faculty Advisor Gary Geiler CAPSTONE PROJECT APPROVAL FORM I certify that I have read the Project of James Michael Sandburg entitled Challenges in Pension Reform, and that, in my opinion, it is satisfactory in scope and quality for the degree of Master of Public Administration at National University. Approved by: ___________________________________________________________________ Gary GeilerDate ABSTRACT The purpose of this study is to examine the challenges faced by public sector administrators as they grapple with restoring pension plans to solvency and sustainability. The objectives are to research and describe how public pension plans have become insolvent over the course of the past dozen years; to discuss legal issues that make reform d ifficult; to suggest how to involve unions in meeting the challenge of reforming pension plans through negotiation with collective bargaining units; to discuss how to chieve pension reform without violating constitutional and statutory protections; to suggest a means of paying off unfunded pension liabilities. Unfunded public sector pension liabilities has become a nationwide problem, with total unfunded liabilities totaling between 1 and 5 trillion dollars, depending upon investment return assumptions. Pension problems have plagued the City of San Diego, California, since the late 1990s. Pension reform became a key element in San Diego’s 2012 mayoral race.The prevailing candidate stood alone among three challengers, as the only one who seemed to recognize the depth of the legal implications of pension reform that will be discussed herein. The idea has become widely held that implementing public pension reform is essential to restore pension plans to financial health and sust ainability. The premise of this study is that it is possible to accomplish necessary reforms without alienating stakeholders, and without exacerbating the problem by doing further battle in the courts.In the end, pension abuses can be eliminated, sound principles of pension finance can be sustained, and the public interest can be preserved. TABLE OF CONTENTS CAPSTONE PROJECT APPROVAL FORMii ABSTRACTiii LIST OF TABLES AND FIGURESv Chapter I: Introduction7 Background7 Problem Statement10 Purpose and Objectives11 Limitations of our Study11 Summary of Remaining Chapters13 Chapter II: Pensions in Peril14 Chapter III: Social Security23 Chapter IV: Reform Propositions34 Chapter V: Legal and Constitutional Hurdles43 San Diego Pension Issues:43 ERISA Pension Reform:47 Contracts Clause:48Due Process & Takings Clause:49 The Due Process and Equal Protection Clause:49 The Eyes of a Nation May Be Upon San Diego51 Chapter VI: Union Participation53 The Meyers-Milias-Brown Act (MMBA):53 The Public E mployment Relations Board (PERB):54 Chapter VII: Pension Obligation Bonds56 Chapter VIII: Conclusions and Recommendations62 LIST OF TABLES AND FIGURES 2. 1 Illinois State Retirement System Rate of Return on Investment†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.. †¦.. 16 3. 1 Summary data for 2010 and 2011†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦19 3. 2 Select Unfunded Accrued Pension Liabilities†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. 29 Chapter I: Introduction Background.The life cycle in America and most developed countries is to spend the first five years learning to walk, talk, and manage our bodily processes. We then spend a dozen to 16 years gaining an education and figuring out what we want to be when we grow up. Once we determine that, some of us then need to continue with another several years of education to gain an adva nced degree or two, and learn the specialized skills of our chosen occupation. We then spend the next 30 or 40 years working 5 or 6 days a week earning a living to support our families and raise up a new generation to repeat the process.By this point we are 60 to 70 years old and ready to retire in some level of comfort and dignity, without having to work anymore – retirement and our â€Å"declining years,† they say. That lasts another dozen years, give or take a decade. The level of comfort and dignity one enjoys during those final years is measured mostly by the wealth we have managed to accumulate during the 3 or 4 decades we toiled at those chosen professions we spent so many years preparing for. For most of us, that wealth consists mainly in something modern society calls a pension.Because most of us lack the discipline, sophistication, or skills needed to set aside and invest money during our working years, the task of accumulating pension funds is left mainly up to our employers, who in turn hire highly specialized teams of people to administer those pension funds. Some of them do that extremely well; others not so much. Because not all employers offered pensions, in 1935 Congress passed legislation authorizing the federal government to tax workers and their employers, in exchange for guaranteeing a basic pension. That legislation was the Social Security Act.Social Security was never intended to replace employer-provided pensions, or to discourage workers from accumulating their own retirement funds. Rather, the intent was that Social Security would provide a guaranteed base upon which workers and their employers could build. Employer-provided pensions are not gratuities. They are offered as a part of the compensation package designed to entice workers to spend 20, 30, or 40 years working for those employers. In the case of Social Security, once again, this is not a gratuity; but rather something workers and their employers pay for over th e entire course of one’s working life.As such, these pensions are something to which workers are therefore entitled. â€Å"Entitlement† is one of those terms that takes on an entirely different meaning, depending upon who says the word. Some wealthy people tend to use the term in a pejorative sense, as if it is something to which recipients are not actually due. Some people at the opposite end of the social ladder toss the word around as if it represents a basic right that is owed to them by society, like the air they breathe.For our purposes, we use the term to describe a set of benefits one actually does earn through years of working, paying taxes, and making contributions, either directly or as an element of one’s compensation. State and local government employers provide pensions through public sector retirement systems. For reasons we will explore later, many government workers are not covered by Social Security, and hence are not entitled to Social Securit y benefits. Whether or not these workers are covered under Social Security, their pensions have been promised as a part of the compensation package by which they were enticed to work for their employers.Pension funds accumulate from three sources: employer contributions, worker contributions, and investment income. Some States and local government entities have done a better job than others, in administering, managing, and contributing to these retirement systems. Because pension funds generally accumulate over long periods time, the 20, 30, or 40 years of the employee’s working life, the largest part of pension funds have historically come from investment earnings. Indeed, typical public sector retirement systems throughout America rely upon those pension funds earning 7. 5% to 8% or more annually.Shrewd investment strategies have often returned even greater earnings. But during the past dozen years, several things have occurred to interfere with such growth. First was the d ot-com bubble burst in the Spring of 2000. Then came the terrorist attacks of September 11, 2001. Then came the â€Å"Great Recession† and mortgage crisis starting in 2007 and escalating over the following several years. Each of these factors played an increasingly damaging role in depleting pension funds, yet were never anticipated by those who designed and managed the funds, or by the local politicians who exercised control over contributions to the pension funds.In some cases, such as in the City of San Diego, City Councils actually chose to take pension holidays to suspend contributions. San Diego promised pension benefit formula increases in exchange for the privilege of suspending pension plan contributions. In retrospect such a plan makes no sense whatsoever, but to some it seemed like the right thing to do at the time. In San Diego the practice ultimately led to a nationally publicized scandal, involving charges of reckless fiscal mismanagement, and leading the New Yo rk Times to dub San Diego, â€Å"Enron by the Sea† in 2004. Broder) An audit report in 2006, prepared by a New York risk management company, and which cost the City $20 million to prepare, summarized the problem: â€Å"San Diego officials cultivated and accepted a culture of financial management and reporting premised upon non-transparency, obfuscation, and denial of fiscal reality. † (Kroll, p. 3) San Diego may have garnered the headlines, but was certainly not alone in its failure to grasp reality when it came to pension finance.San Jose was another, among countless cities, that promised enhanced pension benefit formulas without committing to the requisite pension contributions needed to support them. Problem Statement. Unsupported promises, together with investment losses, unrealized projected earnings, skipped contributions, and even inaccurate mortality assumptions, have put pension plans in crisis in nearly every State and local government throughout the United S tates. There are a few exceptions, of course, but calls for â€Å"pension reform† are rapidly becoming nearly universal.Public sector pensions provided to employees of state and local governments, like all other forms of government worker compensation, are paid in large part from tax revenues, which suggests to some that taxpayers should have something to say about them. In actuality, that may not be the case, any more than taxpayers should exercise direct control over salaries or other employment benefits. Nevertheless, the political process in both San Diego and San Jose, California, brought major pension reform proposals to local voters in 2012.Proposals call for slashing benefits, and even elimination of defined benefit pension plans. Understandably, such ideas have met considerable opposition from employees and the unions who represent them. The fact that these are the 8th and 10th largest U. S. cities respectively, means that all States and political subdivisions facing similar fiscal problems will be paying close attention to what happens in these two California cities. In the process there has been a lot of finger pointing, largely at labor unions, as politicians and city leaders are slow to admit their own roles in the creation of the crisis.Closer scrutiny may suggest that labor unions are less culpable than the politicians are willing to admit. Purpose and Objectives. The purpose of this study is to explore some of the challenges in pension reform. We will suggest some guidelines for bringing stakeholders together to deal with the problem. Finally, we will suggest a possible solution to the financial crisis faced by states and their political subdivisions stemming from widespread unfunded pension liabilities. Limitations of our Study. We have not gone into excruciating detail regarding San Diego’s pension scandals, though it may have been instructive to do so.Neither have we discussed uncounted millions of dollars in wasted legal fees that stemmed from confrontations that might have been avoided, had the City of San Diego taken a more cooperative approach toward labor. While relevant to the present discussion, these details were a bit beyond the scope of this study. We looked at a thirteen pension plans as a representative sample. Twelve of these were chosen specifically because they were held out as being exemplary in the late 1990s, to support the idea that public retirement systems outperform Social Security.A number of these plans were highlighted in a Pew Institute study suggesting that Social Security should be privatized, rather than run by the federal government. It is noteworthy that, with the exception of just one, all of these non-FICA pension systems are today in serious trouble. Another plan was selected to illustrate just how bad off one State pension system had become, underscoring the magnitude of the nationwide problem. We did not study the intricacies of each plan to discuss why they have togeth er amassed hundreds of billions, or even trillions of dollars in unfunded pension liabilities.We presume the reasons were common among them all, and that they represent the majority of public sector pension plans in trouble today throughout the United States. We also did not go into great detail to examine the single non-FICA plan that has managed to operate for several decades without a dime in unfunded pension liabilities. The Galveston County alternative to Social Security plan is quite unique among public sector pension systems, with only two neighboring Texas counties following its lead. The plan deserves further study, but this is beyond the scope of our presentation.Even if its adoption were to become widely accepted in the future, however, it would not address current issues faced by the nation’s other public sector retirement systems. Additionally, this study does not attempt to examine the legislative steps that may be involved in making any solution work. The U. S. Supreme Court has had little to say on the subject of modern pension reform, but we can expect that to change in the near future as current challenges to State and local pension reforms make their way through the court system.Stay tuned, as it is only a matter of time before the nation’s highest court will have an opportunity to weigh in on the topic. Summary of Remaining Chapters. In Chapter I we have introduced the concept of pensions, and their place in society as something to which workers are entitled. We have noted that in today’s tight fiscal environment, State and local governments have become challenged to continue providing pensions. Chapter II discusses the widespread nature of the problems leading to the call for pension reform nationally. In Chapter III we put Social Security in perspective.Chapter IV touches upon some of the proposals put forth in the political processes of 2012. Chapter V notes that there are legal and even constitutional implications s tanding in the way of draconian pension reforms. In Chapter VI we discuss bringing unions on board to seek solutions in cooperation with management, rather than continuing in a pattern of confrontation. Chapter VII discusses one creative way to handle widespread unfunded pension liabilities, and suggests a way to make it work for the benefit of everyone involved. Chapter VIII closes by offering our conclusions and recommendations. Chapter II: Pensions in PerilThere has been much talk in recent months concerning pension reform. At issue is the fact that defined benefit pension plans are unfunded to an alarming degree. This is true nationwide. State and municipal pension funds in many state and local governments currently have less than half of the assets needed to meet their obligations to current and future retirees. The Stanford Institute for Economic Policy Research conducted extensive research on California public pension systems, releasing its report in February, 2012. They anal yzed the 24 of the largest public pension systems in 20 California municipalities.While most pension systems nationally release financial reports assuming long term investment returns of near 8%, the Stanford study applied a more conservative estimate of 5%. Authors of the Stanford study, Evan Storms and Joe Nation, PhD. , make the alarming finding that these 24 systems, in aggregate, are only 53. 6% funded. To illustrate the issue, as of 2010, the San Diego City Employees Retirement System (SDCERS) had accrued liabilities of $9. 871 billion. This estimate is based upon Stanford’s assumed discount rate of 5%, a more conservative estimate than the 7. 75% used in SDCERS official projections.The higher the assumed rate of investment return, the lower the liabilities appear. Sugarcoating the issue by making unrealistic assumptions may ultimately make the matter worse. This is money required to meet the obligations due current retirees, as well as to meet vested benefits already e arned by current employees. To meet this nearly $10 billion obligation, SDCERS has assets only approaching $4. 4 billion. This represents a funding ratio of only about 44. 4% of the amount needed to fulfill the City’s promises to its employees. According to Stanford’s research, the City of San Diego’s 2010 unfunded liability was $5. 489 billion. Storms & Nation, p. 38) The County of San Diego was similarly situated, with assets of nearly $8. 2 billion to meet accrued liabilities of $15. 693 billion, a shortfall of nearly $7. 5 billion. (Storms & Nation, p. 28) The City and County of San Diego are by no means unique in the state. The four pension plans for the City and County of Los Angeles have assets totaling near $70 billion and accrued liabilities of over $90 billion, a $20 billion shortfall. (Storms, pp. 19 and 23) The City and County of San Francisco has assets of close to $16 billion against liabilities of well over $26 billion, or a bit over $10. billion in unfunded liabilities. (Storms & Nation, p. 22) The Stanford study included the 24 largest county and municipal pension systems in the State of California and reveals a total aggregate unfunded liability of $135. 7 billion. This represents approximately 46. 4% of the total accrued liabilities of these 24 city and county pension systems. (Storms& Nation, p. vii) The Stanford study examined 2010 results, and suggested that long term investment assumptions in excess of 5% should not be relied upon.On July 21, 2011, the San Diego County Employees Retirement Association (SDCERA) announced preliminary investment results for fiscal year 2011. SDCERA had managed an outstanding 21% gain. This amazing return added $1. 6 billion to the SDCERA pension fund. Surely the SDCERA Board should be commended on such outstanding results. A few such years can do wonders in restoring this particular fund to health. But just as surely, such results cannot be expected to continue each and every year. Neit her can other funds rely upon such results. Indeed, few have ever done so well.In 2012 the SDCERA fund realized investment income at the rate of only 6. 5%. While most State retirement systems have reported billions of dollars in unfunded liabilities, Illinois may be the poster child of sickly State sponsored pensions. As of 2011, the 5 Illinois State pension plans report funding ratios of only 43%, with a total unfunded pension liability of $83 billion. The shortfall in 1996 was only $20 Billion. In the intervening 15 years the unfunded liability multiplied 4 times, from 20 Billion to over $83 Billion, well over $4 billion each year, on average. The nearly $64 billion question: How did this happen?This question was studied recently by the Civic Committee of the Commercial Club of Chicago. Investment losses, resulting mainly from the mortgage crisis starting in 2007, are estimated by the Committee report to account for nearly 22% of the shortfall. (Civic Committee, p. 11) Investment returns play the major role in pension fund growth, but they are unpredictable, as illustrated in the following chart, taken from the Civic Committee of the Commercial Club of Chicago report on the Illinois State Retirement System: Another major impact comes from changes in actuarial assumptions, due to an improvement in mortality rates.This phenomenon may be good for life insurance companies, paying less in death benefits, but defined benefit pension annuities cost more to fund when people are expected to live longer, since retirees will collect their pensions for longer periods of time. The Centers for Disease Control and Prevention recently reported that, â€Å"In the most recent period from 1969 to 2010, significant progress in the prevention, diagnosis, and treatment of cardiovascular diseases likely contributed to the 41 percent decline in age-adjusted mortality. † (Hoyert) The drop in mortality rates has been quite dramatic. For all but the oldest age group (85 years and over), mortality risk fell more than 50 percent between 1935 and 2010. . . [F]or persons 65–74 years of age, death rates declined by 62 percent, while death rates decreased by 58 percent for those 75–84 years of age, and declined 38 percent for persons 85 years or more. † (ibid. ) Applying these statistics to pension plans, particularly defined benefit plans with cost of living adjustments (COLAs), it only stands to reason that the costs to keep the retirement checks flowing to retirees who are living longer, will have a major impact on pension funds.According to the Chicago study, in 1970 a 60 year old was expected to live to the age of 78. By 2007, however, a 60 year old was expected to live to the age of 82. 5. Paying benefits to a 60 year old retiree receiving a pension of $50,000 per year, therefore, has thus increased by over $225,000, estimating that he will be receiving that benefit for about 4. 5 years longer than might have been the case 40 years ag o. †Such variances, multiplied across the hundreds of thousands of articipants in the state pension plans and without corresponding increases in employee contributions, can have a significant impact on the plans’ unfunded liabilities. † (Civic Committee, p. 14) The same phenomenon can be applied to other pension plans throughout the United States. Couple improved mortality factors with reduced investment earnings, and catastrophic losses resulting from the â€Å"Great Recession. † Add to this the fact that states and municipalities are also suffering from dramatic the tax revenue reductions. It quickly becomes evident that pensions are in peril.The Civic Committee report states that, â€Å"If Illinois fails to address its pension system through a set of comprehensive and lasting reforms, all of its citizens will ultimately suffer. Participants in the underfunded pension plans will be put at risk. The state’s ability to provide vital public services will be severely hampered. And a growing financial burden will be imposed on Illinois residents. † (Civic Committee, p. 1) Official reports from pension funds throughout the country estimate unfunded liabilities totaling close to a trillion dollars as of mid-2011.That figure, however, is based upon future average investment earnings at the rate of approximately 8%. While there have been years in which pension systems have attained such a return, or even greater, to rely upon such returns long term, in today’s tight economy, may seem unrealistic. Accordingly, such an assumption grossly understates the magnitude of the problem. In July of 2010 the National Center for Policy Analysis estimated unfunded public pension liabilities throughout the United States in excess of 3. 1 trillion dollars. Collins & Rettenmaier) Even this estimate may be optimistic. In July of 2012, Andrew Biggs, Ph. D. , a scholar with the American Enterprise Institute in Washington, D. C. , released a report suggesting a more accurate calculation for public sector unfunded pension liability may be closer to $4. 6 trillion. (See Table 1) The wide differences among these estimates are accounted for by investment returns, or discount rates, that are more or less optimistic. Andrew Biggs understands pension accounting. He was formerly Principal Deputy Commissioner of the Social Security Administration.Dr. Biggs holds Masters degrees from Cambridge University and the University of London, along with a Ph. D. from the London School of Economics. (Biggs) Whether the actual number is 1 or 5 trillion, either number represents a seemingly insurmountable crisis for public pensions in the U. S. Faced with such a situation, governors, county administrators, mayors, and city councils throughout the nation are seeking creative solutions to handle their part of the shortfall. The urgent call for pension reform has reached crisis proportions in many State and local governments.During the preside ntial primary election in June of 2012, the cities of San Diego and San Jose, California, introduced ballot measures seeking voter authorization to reform the pension plans of their respective municipal employees. In both cities the ballot measures were passed by an overwhelming majority of voters, though one might wonder whether the voters were fully informed. On June 22, 2012, San Jose Mayor Chuck Reed hand delivered a letter to the U. S. Treasury Department summarizing his City’s fiscal problems as follows: San Jose's cost for retirement benefits has gone from $73 million ten years ago to $245 million this year.To cope with this increase, we have reduced our work force from 7400 to 5400 employees. We also made many organizational changes to be more efficient, and every employee in the city took a 10% cut in pay. Yet, our unfunded liabilities for retirement benefits continue to grow, and we are facing rising costs for at least another decade. Short of bankruptcy, we have a very limited range of steps we can take to control retirement costs. In addition to layoffs and pay cuts, we can require our employees to pay more for the cost of their benefits.Hundreds of cities in California and in other states have already done so. Starting in June 2013 our employees will have to pay an additional 4% of their pay towards unfunded pension liabilities. That amount will increase annually until it reaches 16% of pay or 50% of the cost of unfunded liabilities. San Diego and San Jose barely represent the tip of the iceberg. The problem, as Mayor Reed suggested, is national. Most State and local government pension programs today sense the need for some form of pension reform. Some have been quick to blame the problem on the greed of labor unions.Labor unions have a responsibility to represent their members, and to bargain for the best possible terms and conditions of employment, including pensions. But the unions are not the ones who write the checks or manage public p ension funds. Labor unions do not choose to take pension contribution holidays. The most highly compensated public employees, those taking the largest pensions, are often not represented by unions. So while unions make wonderful scapegoats, the most grievous of pension abuses that have brought public sector pensions to the brink of insolvency may not lie with unions or their members.Assigning blame to either faction does little to address the problem, and it is not within the scope of this report to point fingers at anyone. Rather we hope to point the way toward a workable solution. Before looking at proposed or potential solutions we should first understand the role of Social Security. While many public sector employees are not covered under Social Security, nevertheless, by law their public retirement systems are required to provide benefits that are at least comparable to those provided by Social Security. Chapter III: Social SecurityNo discussion of pension reform can be complet e without an understanding of Social Security, the basis of pension protection for the vast majority of American workers, though certainly not all. On August 14, 1935, Congress passed H. R. 7260, which came to be known as the Social Security Act, signed into law by President Franklin Delano Roosevelt. The intent was to provide a level of economic security in the wake of the Great Depression, providing protection for workers and their dependents against the loss of earnings due to disability, retirement, or death.The preamble of the Social Security Act describes it as, â€Å"An act to provide for the general welfare by establishing a system of Federal old-age benefits, and by enabling the several States to make more adequate provision for aged persons, blind persons, dependent and crippled children, maternal and child welfare, public health, and the administration of their unemployment compensation laws; to establish a Social Security Board; to raise revenue; and for other purposes. When first introduced, Social Security covered most private-sector workers. Excluded from coverage, however, were state and local government employees. Prior to 1951, State and political subdivision government employers were not required to participate in Social Security, due to concerns over the constitutionality of imposing federal taxes upon sovereign state governments. The Social Security Act was amended in 1950 to add Section 218.This amendment authorized voluntary State participation through â€Å"Section 218 Agreements,† so named after Section 218 of the Social Security Act: The Commissioner of Social Security shall, at the request of any State, enter into an agreement with such State for the purpose of extending the insurance system established by this title to services performed by individuals as employees of such State or any political subdivision thereof. [42 U. S. C. 418] (a)(1) Prior to 1983, continued participation under Section 218 Agreements was optional, wit h States having the right to withdraw from those agreements.Beginning in 1983, however, those public employers which were participating in Social Security were required to continue that participation. The city of San Diego was among many local governments that opted out of Social Security in 1982, prior to the effective date of that change in the law. Throughout the United States today there are approximately 86,000 public employers, with 23 million public employees, according to the Social Security Administration’s State and Local Government Employers Information webpage.Approximately 5 million of those government employees work for public entities that do not participate in Social Security, but rather provide coverage under public retirement systems meeting stringent â€Å"safe harbor† requirements. Under current law, Social Security coverage is extended to include employees of state and political subdivisions, unless they are covered under a retirement system that p rovides benefits that are comparable to those available under Social Security.The safe harbor requirements are spelled out in Title 26 of the Code of Federal Regulations, otherwise known as the Internal Revenue Code: Under section 3121(b)(7)(F), wages of an employee of a State or local government are generally subject to tax under FlCA after July 1, 1991, unless the employee is a member of a retirement system maintained by the State or local government entity. This section 31. 3121(b)(7)–2 provides rules for determining whether an employee is a â€Å"member of a retirement system†.These rules generally treat an employee as a member of a retirement system if he or she participates in a system that provides retirement benefits, and has an accrued benefit or receives an allocation under the system that is comparable to the benefits he or she would have or receive under Social Security. In the case of part-time, seasonal and temporary employees, this minimum retirement ben efit is required to be nonforfeitable.In simple terms this means that public employers who do not already voluntarily participate in Social Security under a Section 218 agreement, must now do so unless they provide benefits under a public retirement system which are at least as comprehensive and beneficial as those provided under Social Security. This is not a discretionary item, where a public employer may give its employees an option to participate or not. The employer must either participate in Social Security, or provide its employees with a retirement system that provides benefits which are â€Å"comparable to the benefits he or she would have or receive under Social Security. Another consideration is that Social Security OASDI benefits include a great deal more than a simple retirement plan paying retirement income to its participants. Social Security also offers income to a worker’s dependent children until their age 18. There is also a disability income insurance ele ment within Social Security, which is either non-existent or difficult to provide under a typical 401(k) style plan. 401(k) plans are investment vehicles that require the element of time in order to grow. Disability can strike at any time, and may not wait for a worker’s 401(k) plan to gain adequate resources.Disability income insurance costs are occupationally based. The greater the physical demand upon the worker, and the more hazardous an occupation is, the greater the cost to provide insurance coverage. Sanitation workers and safety employees, police officers and firefighters, for example, face physical demands and hazards that do not exist for clerical workers and executive level department heads. To replace the disability benefits guaranteed under Social Security through a plan of insurance, whether self-funded or through commercial insurers, would add a tremendous drain upon the resources of a Defined Contribution plan.In contrast, Social Security spreads that risk acr oss all workers nationally, regardless of occupational hazards. In the private sector nearly all employees are subject to payment of Social Security payroll taxes under the Federal Insurance Contributions Act (FICA), and eligible for coverage under Social Security’s Old-Age, Survivors, and Disability Insurance (OASDI). But approximately 5 million public employees in the United States are exempt from Social Security coverage, since their employers opted out of Social Security before 1983.As discussed above, Public employees may be exempted from Social Security, provided they are members of a retirement system maintained by a state or political subdivision. To be exempt from Social Security coverage, the retirement system must provide certain minimum retirement benefits. To meet the minimum requirement, IRS regulations require that a retirement system provide benefits to the employee that are â€Å"comparable† to those provided in the Old-Age portion of the OldAge, Survi vor, Disability Insurance (OASDI) program under Social Security. IRS Publication 963) Public employees who participate in a retirement system that meets the minimum requirements are said to have safe harbor. Such a retirement plan may be either a defined benefit or a defined contribution plan, but benefits derived from the plan must be comparable to those available under Social Security. In other words, any public pension plan that fails to provide retirement and disability benefits at least as good as those provided under OASDI, also fails to exempt the pubic employer from participating in Social Security.Drastic changes to public retirement systems may disqualify municipalities from continued safe harbor. Another consideration those anxious for reform may be overlooking is that this is an all-or-nothing proposition. Cities imposing major pension reforms limited to new hires may find that the new employee plan fails the safe harbor test, thus requiring Social Security participation from all employees, including those not previously covered. While this remains to be tested in the courts, the law seems pretty clear on this issue. Social Security has had its detractors from its very beginnings.Many people have believed private investment strategies could produce greater financial security than the government run Social Security program. Some have called for Social Security Privatization. In 1997, William Even and David MacPherson published a study that examined 7 public retirement systems not participating in Social Security, referred to as non-FICA plans. The study suggested that these 7 plans would provide greater retirement benefits than Social Security to the million covered employees. (Even ; MacPherson) In 1999, the Cato Institute published the Cato Project on Social Security Privatization.This study examined several other non-FICA public retirement systems administered by local governments, including the San Diego City Employees Retirement System (SDCERS) , the Massachusetts Teachers Retirement System, the Louisiana Police Retirement System, the Louisiana Firefighters’ Retirement System, the Public Employees Retirement System of Ohio, the Alternative Plan for Galveston County Employees. (Lips) At the time of these studies, each of the dozen retirement systems featured in were thriving, and reportedly capable of providing far greater benefits to their beneficiaries than would have been available under Social Security.They were spotlighted to illustrate that such funds were outperforming Social Security as a means of providing retirement security for public employees. In Chapter II we mentioned that as of 2011, according to a report published by the Stanford Institute for Economic Policy Research, the San Diego City Employees Retirement System (SDCERS) only had assets of $4. 4 billion to cover accrued liabilities of $9. 871 billion, an unfunded liability of $5. 489 billion. Due to differences in projected investment returns, the se figures differ dramatically from the official numbers released in SDCERS financial reports.SDCERS reports their unfunded liability at under $2. 2 billion. Either way you slice it, whether $2 billion or $5 billion, this is a great deal of money for any single municipality to come up with. Whichever figure you prefer to accept, the fund is no longer the healthy pension system it was at the time of the 1999 Cato study. The SDCERS fund was then considered among the best public employee retirement systems in the country, an example used to promote the idea of Social Security privatization. Today it has an unfunded pension liability approaching 56%. Select Unfunded Accrued Pension Liabilities Non-FICA Public Retirement System| UAL (billions)| Funded Ratio %| 1| San Diego City Employees Retirement System (SDCERS)| 2. 1| 68. 5| 2| Los Angeles City Employees’ Retirement System (LACERS)| 3. 7| 72. 4| 3| Maine Public Employees Retirement System (Maine PERS)| 4. 1| 66. 0| 4| Ohio Publ ic Employees Retirement System (OPERS)| 67. 8| 63. 0| 5| State Teachers Retirement System of Ohio (STRS Ohio)| 40. 6| 58. 8| 6| Colorado Public Employees Retirement System (PERA)| 30. 0| | 7| Nevada Public Employees Retirement System (NVPERS)| 10. 9| 70. 2| 8| California State Teachers Retirement System (CalSTRS)| 65. | 69. 4| 9| Massachusetts Teachers Retirement System | 13. 6| 58. 7| 10| Louisiana Police Retirement System| 0. 3| 55. 6| 11| Louisiana Firefighters’ Retirement System| 0. 4| 74. 3| 12| The Alternative Plan for Galveston County Employees | 0. 0| 100. 0| | | 239. 0| | With the exception of one, each of the other public retirement systems cited in the 1997 and 1999 studies are today facing massive unfunded liabilities. Based on their own 2010 or 2011 financial reports, 10 of those 11 retirement systems are facing total unfunded accrued actuarial liabilities (UAL) of $239. 0 billion. 1.As of June 30, 2011 the unfunded actuarial liability (UAL) of the San Diego City Employees Retirement System (SDCERS) was 2. 1778 billion, a funding ratio of 68. 5%. Those are SDCERS own estimates. As shown above, however, reducing the assumed investment income rate to 5% changes the funding ratio to 44% and suggests an unfunded liability of between $5 and $6 billion. 2. The Los Angeles City Employees’ Retirement System (LACERS), administers pensions for employees of the City of Los Angeles, a city with an annual budget of near $7 billion. As of April, 2012, the fund reported $27 billion in unfunded pension liabilities. source: http://www. calwatchdog. com/2012/04/30/los-angeles-teeters-on-the-brink-of-bankruptcy/] 3. As of May 24, 2011, the Maine Public Employees Retirement System (MainePERS) reports an unfunded accumulated liability (UAL) of $4. 1 billion in the MainePERS State/Teacher Plan, amortized at a 2-year cost of $689 million on top of normal contributions of $159 million. [as reported by letter to Senator Richard Rosen and Representative Patri ck Flood of Maine’s Joint Standing Committee on Appropriations and Financial Affairs, May 24, 2011] 4.As of April 2, 2011, the Ohio Public Employees Retirement System (OPERS), with its 5 pension plans, including the Highway Patrol Retirement System, the Ohio Police and Fire Pension Fund, the Ohio Public Employees' Retirement System, the State Teachers' Retirement System, and the School Employees' Retirement System, has a total unfunded pension liability of $67. 8 billion, against assets of $115. 5 billion. That makes Ohio’s pensions only 63% funded. [source http://sunshinereview. org/index. php/Ohio_public_pensions] 5. The State Teachers Retirement System of Ohio (STRS Ohio) reported an unfunded liability of 40. 5 billion, as of November 10, 2011. [https://www. strsoh. org/]: On September 26, 2012 Ohio Governor Kaisich signed the Ohio pension reform bill passed by the Ohio Legilature on September 12, intending to improve the financial condition of its five Ohio pension systems. The bill continues to support Ohio’s Defined Benefit Pensions as â€Å"major economic drivers† for the state, and providing â€Å"a stable retirement income for public workers in Ohio. † [https://www. strsoh. org/legislation/main. html] At Ohio State University, faculty contribute 10% of their salary to the retirement plan, while the university contributes 10. % of the faculty member's salary to his or her retirement plan. An additional 3. 5% of salary is contributed to STRS to reduce unfunded liabilities. [http://hr. osu. edu/benefits/rb_strs. aspx] 6. The Colorado Public Employees Retirement System (PERA) faced a 30 billion unfunded liability in 2010. 7. The Nevada Public Employees Retirement System (NVPERS) has assets of $25. 8 billion, and has generated a net return of 9. 3% over its 28 year existence, exceeding its actuarial objective of 8%. That sounds great, until you realize that returns over the past 5 years average closer to 2. %. The Nevada PERS estimates its funded ratio at 70. 2% for 2011, its lowest level since its 1992 inception. This leaves the plan with an unfunded liability of 10. 95 billion. 8. California State Teachers Retirement System (CalSTRS), 152. 2 billion in assets, as of June 30, 2011, had an unfunded liability of $65. 5 billion, representing a funding ration of 69. 4%. [source: Pensions ; Investments Research Center, April 9, 2012, available at http://www. pionline. com/article/20120409/REG/120409899] 9. The Massachusetts Teachers Retirement System has one of the lowest cost o taxpayers, with employees required to fund the greatest portion of their own retirement. New employees pay 95% of the cost of their pensions. But the system still faces an unfunded pension liability of $13. 6 billion against assets of 19. 4 billion, in 2009, with a funded ratio of just 58. 7%. 10. The Louisiana Police Retirement System is a small system with assets of only $360. 9 million, but its unfunded liability is $313 mill ion. Its funded ratio is only 55. 6%. 11. The Louisiana Firefighters’ Retirement System, as of June 30, 2011, had an unfunded actuarial accrued liability of $416,177,743, against assets of 1. billion. This fund has a funded ratio of 74. 33%, which is very good compared to the rest of Louisiana’s retirement systems, facing a total shortage of 18. 5 billion, with a funding ratio of 56%. 12. The Alternative Plan for Galveston County Employees is unique among the reviewed plans, claiming no unfunded pension liability. This plan was patterned after Social Security, calling for the same level of contribution as with Social Security, from the employer and the worker alike. The plan also incorporates an insurance element that improves on the theme from Social Security.In addition to retirement benefits that a near double those of Social Security, Galveston’s Alternative Plan pays a death benefit equivalent to four times a worker’s annual salary. Two neighboring T exas counties adopted similar retirement plans in 1983. The Galveston model stands alone among all of the public retirement systems included in the 1997 and 1999 studies used to support the idea of privatizing Social Security. Galveston County’s approach seems worthy of further study and emulation, as a plan fair to participants, employers, and taxpayers alike.Chapter IV: Reform Propositions In the past dozen years, since the disaster of 9/11/2001, and especially since the mortgage industry meltdown in 2008 and 2009, pension reform has become an increasingly pressing issue. Some municipalities, including San Diego, and San Jose, California, have passed ballot measures calling for pension reform. These were known as Proposition B in San Diego, and Measure B in San Jose. San Diego and San Jose are the 8th and 10th largest cities in the U. S. respectively, so what happens in these communities with respect o pension reform will gain the attention of all cities throughout the nati on that are seeking solutions to the problem of unfunded pension liabilities. San Diego's City Charter included a provision that requires a majority vote of all city employees to approve any changes to retirement benefits. Proposition B called for that provision to be eliminated from the City Charter. (Prop. B) The ballot measure was intended to create a voter-supported mandate, granting the Mayor and the City Council authority to modify the City’s pension plans. These make up a major part of the compensation packages of city government workers.If the City denies its employee’s voting rights over control of their pensions, such a move could have serious property right implications. Implementation of such a plan may lead to very costly legal battles – for reasons we have explored in previous chapters. Among the most fundamental of employee benefits upon which the vast majority of U. S. workers have come to rely is the Social Security system, which we discussed in Chapter III. Social Security ensures a degree of financial stability to retired workers, or in the event of a disabling injury or disease that would prevent a worker from earning a living.This basic employee benefit has been a part of American workers’ life since passage of the Social Security Act of 1935. â€Å"The act instituted a system of mandatory old-age insurance, issuing benefits in proportion to the previous earnings . . . and establishing a reserve fund financed through the imposition of payroll taxes on employers and employees. † (Farlex) But what many voters may not have realized when they supported Proposition B in June of 2012, is that participation in Social Security is among the sacrifices San Diego employees made in accepting careers with the City.As explained in Chapter III, while virtually all private sector employers are required by law to participate in Social Security for the benefit of their employees, only some local government entities are exe mpt. The City of San Diego elected to withdraw from Social Security participation in 1982, and since then has not paid Social Security payroll taxes. Instead, San Diego and many similarly situated municipalities provide retirement and disability related financial security to its employees through the City’s pension plan.San Diego City employees are only eligible to receive Social Security retirement benefits if they worked in covered employment other than for the City of San Diego, or worked for the City prior to 1982. Instead, San Diego’s employees are covered only by the public retirement system provided by the City. Public employees in many other cities across the nation work under similar circumstances. But since the vast majority of voters are covered by Social Security, it likely does not occur to them that local government workers are not eligible.While pension reform became a political football in San Diego’s 2012 mayoral campaign, pension issues have pl agued the City of San Diego for over a dozen years. One of the four mayoral candidates, City Councilmember Carl DeMaio, wrote and promoted Proposition B, which was placed on the ballot for the presidential primary election held on June 5, 2012. Much controversy surrounded this ballot measure, following allegations that the City had circumvented the legally required process of meeting and conferring with its labor unions.Both outgoing Mayor Jerry Sanders and City Councilmember Carl DeMaio openly claimed authorship of the ballot initiative. Mr. DeMaio made it a key element of his mayoral campaign. But when the City was challenged as to its failure to negotiate with the City’s union concerning proposed reforms, they both claimed the initiative was citizen-initiated, and not an action of the City. Since both the mayor and a prominent member of the City Council each played a major role in the authorship and promotion of the initiative, it seems difficult to legitimize the claim th at this was not an official action of the City.As the ballot measure was presented to the voters, however, supporters of the initiative failed to mention or remind voters that San Diego’s pension plan had replaced Social Security for City employees 30 years before. Had voters understood the full ramifications to City workers, and the fact that they are not covered by Social Security, the election results on Proposition B may have been different. Indeed, had the voters who signed petitions to have the measure placed on the ballot known this vital detail, some may have withheld their signature.Promoters carefully avoided any discussion of Social Security as they cajoled voters to pass the measure, while opponents also failed to adequately stress the Social Security implications. Legal challenges were brought in the courts, charging that the City violated its legal obligation under the Meyers-Milias-Brown Act to meet and confer with the City’s unions regarding provisions of the ballot initiative. The City won the first round in this battle, succeeding in getting the measure placed on the June 2012 ballot. In San Diego Municipal Employees Association v.The Superior Court of San Diego County (San Diego County Superior Court No. 37-2012-00092205-CU-MC-CTL), the Court of Appeal for the Fourth Appellate District overruled that decision, but too late to have any impact. That decision came on June 19, 2012, two weeks after the election. The suggestion that San Diego’s Proposition B had a questionable legislative history, or that it was improperly brought to a public vote, is not to imply that pension reform is unnecessary, in San Diego or anywhere else. But Proposition B may not be the panacea San Diego voters were led to expect.There may be other actions San Diego can take to address its pension problems – actions that would be both more effective and more fair to City employees and taxpayers alike. Several such potentially more sensible app roaches to the problem were mentioned by Congressman Bob Filner, the only one among San Diego’s four mayoral candidates who resisted Proposition B. Congressman Filner recognized the proposition’s shaky legal foundation, and acknowledged that such a reform plan may meet with constitutional challenges we will explore in the next chapter.Proposition B involved several elements. One part of Proposition B imposes a wage freeze. Curiously, however, even after the wage freeze was announced, Mayor Sanders authorized pay raises for several members of his administration, totaling nearly $45,000 per year. Union officials might wonder why austerity measures like wage freezes apply to represented employees, but apparently not to another class of employees. If serious belt-tightening is called for, the City might do well to apply such measures universally.To expect the burden to be borne by the City’s unionized workers, but not by management employees, does not do much to pro mote labor peace. The proposition also modifies the police pension plan, raising the retirement age and lower the maximum benefit. Pension benefits for newly hired public safety workers would be reduced from a maximum of 90% to a lower cap of 80% of pre-retirement earnings. Key among the changes imposed by Proposition B is replacing the City’s Defined Benefit pension plan with a 401(k) style Defined Contribution plan that make no financial security guarantees.These would be for all new employees who are not a part of the Police Department. As to Social Security, close reading of Proposition B reveals that its author acknowledges the fact that City employees are not presently covered. It is suggested that the City may open the option for employees to become covered by Social Security, but that it is the intention of the City to maintain its safe harbor exemption from Social Security participation. In this respect San Diego’s Proposition B approach to pension reform may have a fatal flaw.Recall from our discussion of Social Security that municipalities can maintain exemption from participation in Social Security, but only if its pension plan provides benefits comparable to those available under Social Security. For the past 30 years the City’s Defined Benefit pension plan has fulfilled that requirement. The question is, will the 401 (k) style Defined Contribution plan proposed under Proposition B, meet the same stringent requirements? Unless the plan provides a level of benefits at least as comprehensive as Social Security’s Old-Age, Survivors, and Disability Insurance (OASDI), the answer is likely no.Defined Benefit Pension plans base pension benefits as a guaranteed fixed percentage of pre-retirement income, determined by a benefit formula that considers both rates of pay and years of service. These benefits are paid for by employer and employee contributions to the pension fund, and also by the investment income derived from the fu nd. When fund investments do well, contributions required from the employer are lessened. When investment income suffers, greater contributions are required from the employer to meet fund obligations.Defined Contribution Plans, in contrast, do not feature benefit guarantees, but rather base their security in a known fixed cost for the amounts paid into the plan. (Bennett-Alexander, p. 774) Defined Contribution plans may seem attractive from the point of view of the employer, but for the worker it means financial uncertainty. Eliminating the financial security features of Defined Benefit plans is a major change from long-standing past practice in San Diego and in cities similarly situated.The principle of past practice may give yet another basis upon which unions may mount a challenge to such a drastic change as to eliminate participation in Defined Benefit plans. Defined Benefit Pension Plans account for nearly 73% of union-negotiated retirement plans across the Nation, particularly in the public sector. (Carrell, p. 329) Income maintenance plans – pensions and other employee benefits such as severance pay, death and disability insurance, wage guarantees, supplemental unemployment plans, and the like – have generally been negotiated over long periods of collective bargaining by employee organizations and unions. Carrell, p. 328). In many cases, such as for San Diego city employees, these negotiated income maintenance plans take the place of programs made available to other workers through Social Security. Based upon one’s term of employment and level of earnings, Social Security’s OASDI provides guaranteed disability and retirement income to covered individuals and their families. Defined Benefit pension plans can be designed to be as good or better than Social Security. Benefits under Social Security are not in any way dependent upon investment returns, and the same is true, by definition, in Defined Benefit pension plans.The very nature of a Defined Benefit plan is that what is defined is the benefit, not the contribution. Benefits are established, and contributions may vary to meet the scheduled benefits. If investment returns fail to fund the plan at sufficient levels to meet plan obligations, the shortfall is simply overcome by making greater contributions to the plan. In a Defined Contribution plan, however, what is guaranteed is not the benefit, but rather the amounts to be contributed. Costs are fixed; benefits are contingent upon the fund’s resources, which come both from contributions and investment earnings.Simply put, benefits are directly dependent upon investment returns, which cannot be guaranteed. Highly compensated employees (HCE) see another attractive feature of 401(k) style retirement plans. Participating in such a plan offers very significant tax benefit, allowing voluntary contributions to accrue free of income taxes. Those workers whose income is lower, however, can neither afford voluntary reductions in pay, nor benefit to the same degree from 401(k) plan participation.From the perspective of lower paid workers, particularly those younger workers who do not sense retirement planning as being pertinent, every dollar an employer pays into a pension plan is a dollar that is not available in this week’s paycheck. While equally true for the highly compensated, that dollar has less significance. As explained in a recent study by the Center for Retirement Research at Boston College, high income workers benefit disproportionately due to higher participation rates, higher contribution rates, and higher tax benefits. Toder and Smith, p. 7) Defined Contribution plans may appear attractive to public employer budget analysts and some highly compensated employees, but they almost certainly fall short of being comparable to Social Security. To make them comparable, contribution rates would likely have to be set so high as to make investment returns unimportant. Sud denly then, Defined Contribution plans lose their attraction, as they may cost even more than the Defined Benefit plans they are intended to replace.That may be even more true considering the attorney and court fees taxpayers may be required to suffer to defend legal and constitutional challenges. During the San Diego mayoral race, candidate Congressman Bob Filner, noted that should Proposition B be implemented, there is a strong likelihood that much of the perceived savings might be spent instead on legal fees defending the lawsuits that would likely follow. Discussing the pension reform problem on the National scene, and the move toward cutting back on pension benefits, Stuart Buck, J. D. as noted, â€Å"[T]he problem is how to do this in a way that is most fair to workers and in a way that is consistent with state or federal Constitutional provisions that prohibit states from impairing the obligations of contracts. † (Buck. ) Chapter V: Legal and Constitutional Hurdles Pow er to grant pensions is not controverted, nor can it well be, as it was exercised by the States and by the Continental Congress during the war of the Revolution; and the exercise of the power is coeval with the organization of the government under the present Constitution, and has been continued without interruption or question to the present time.Justice Nathan Clifford United States Supreme Court United States v. Hall 98 U. S. 343 (1879) The establishment of pensions in recognition of public service is a practice so steeped in tradition as to be considered a right of passage. Any proposal that suggests taking such benefits away from public servants will be met with stern opposition in the courts. There are well-founded statutory, contractual, and constitutional protections that make it difficult for cities or other political subdivisions to impose pension reforms. The U. S.Constitution has several clauses that can be interpreted to protect pensions. Numerous State constitutions of fer similar protections. San Diego Pension Issues: The City of San Diego, California, presents an interesting backdrop for the discussion of the legal and constitutional implications of pension reform. During the past decade the City of San Diego incurred millions of dollars in legal expenses dealing with lawsuits stemming from scandalous pension dealings and futile attempts to make unilateral changes to its pension plans.Such money enriched a few lawyers, but only worked against the interests of the City and its taxpayers. Attempts by the City of San Diego to impose pension reforms again gained attention during the 2012 election year. One of the City’s mayoral candidates, City Councilmember Carl DeMaio, wrote a ballot proposition known as the â€Å"Comprehensive Pension Reform Initiative,† making pension reform the basis of his campaign. Of the four candidates in the 2012 San Diego mayoral race, only Congressman Filner seemed to acknowledge the legal and constitutiona l issues applicable to pension reform.During the campaign, candidate Bob Filner, a 20 year veteran of the U. S. House of Representatives, predicted that should Mr. DeMaio’s Proposition B pass voter approval, its implementation would be met by legal and constitutional challenges that may cost the City dearly to defend. Mr. Filner also noted that, â€Å"Proposition B does nothing to reduce the current pension deficit, it takes retirement security from employees who are not in the Social Security system – and it will result in years and years of more political wrangling and litigation over its legality and implementation. (Filner) Specifically, the legal implications of Proposition may involve charges of breach of contract. Under California law, employers enter into an implied and enforceable contract with employees as of the date of hire, with respect to the terms and conditions of employment. Employee benefits, including pensions, that are promised as an inducement to accept em