Pennsylvania Delays Pension Payments | Chief Investment Officer

Pennsylvania is delaying more than $1.7 billion in payments due to school employee pensions and Medicaid because the state government has run out of funds.

The payments are for the state’s share of pension obligation payments to Pennsylvania’s school employees pension fund, and for reimbursements for medical care under Medicaid. The Medicaid reimbursements, which are due Sept. 22, will be delayed for at least a week, and school officials said they expected the pension obligation reimbursements, which are due Sept. 25, to be delayed by a few days, reported the Associated Press.

The treasury delayed $581 million in the state’s share of pension obligations to the Pennsylvania School Employees Retirement System (PSERS), and $1.169 billion in payments to managed care providers for medical assistance services.

“Without a completed budget, the commonwealth’s Treasurer and Auditor General have said they are not currently inclined to authorize the normal short-term lending that would typically allow for seasonal cashflow interruption,” said J.J. Abbott, a spokesman for Pennsylvania Gov. Tom Wolf. “Delayed payments will remain stalled until funding exists to meet commitments.”

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State officials expect rolling delays of payments, at least until spring, said the AP, unless the budget issues are settled before then.

“We’ve been told it’s going out next week,” said Jay Himes, executive director of the Pennsylvania Association of School Business Officials, according to the AP. “After that, we’ve been told, ‘Don’t hold your breath.'”

The AP reports that insurers that administer benefits for 2.2 million Medicaid enrollees will be forced to borrow money to make timely payments to hospitals, physicians, and pharmacies that are required by federal law. It is the first time that the Pennsylvania state government has missed a payment as a result of not having enough money.

“I spoke with House and Senate leaders to try to finalize a budget that protects investments in critical programs important to the people of Pennsylvania,” said Wolf in a statement. “We made progress, and with more work, I believe we can reach a compromise in the coming days.

Tags: governor tom wolf, Pennsylvania, Pennsylvania Public School Employees Retirement System (PSERS), Pension, Treasury

A paper from the Sustainability Accounting Standards Board (SASB) and the Climate Disclosure Standards Board (CDSB) reveals how the two organizations are aligning with the recommendations of the G20 Task Force on Climate-related Financial Disclosure (TCFD).

The paper, “Converging on Climate Risk: CDSB, the SASB, and the TCFD,” reflects on how extreme weather events, such as those recently experienced in the Caribbean, South Asia, and the US, extend to material impacts on companies both regionally and worldwide. Lack of transparency around corporate exposure to such risks presents a challenge for investors to accurately assess them.

For financial markets to remain healthy and transition to a low-carbon economy, the TCFD developed a set of recommendations that companies can use for the voluntary disclosure of information about climate-related financial risks and opportunities. These recommendations can then be shared to keep investors, lenders, and insurance underwriters better informed.

“As the impacts of sustainability-related business risks on business and society—including those associated with climate change—have risen in prominence, a variety of reporting approaches have proliferated, creating confusion in the market over which one to use,” Jean Rogers, founder of SASB and chair of the SASB Standards Board, said in a statement. “Alignment between the SASB, CDSB, and TCFD provides streamlined guidance for issuers, more useful information for investors and other decision makers, and increased stability and resilience for the broader capital markets.”

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All three organizations’ work naturally aligns through shared philosophical and technical beliefs, such as focusing on climate risk and financially material opportunities as well as promoting the disclosure of material information in mainstream financial filings. The paper outlines how the SASB and CDSB will continue to improve their relationship with the TCFD. It also provides companies with the basics for moving forward with the TCFD recommendations via complementary frameworks.

“We have been working with the SASB for years through our Technical Working Group and, most recently, through our Board, and we are happy to strengthen our mutual agreement to support the work of the TCFD with this paper,” Richard Samans, chairman, CDSB, said in a statement. “As we work together to improve global climate and environmental reporting practices, we hope to provide companies with more comprehensive guidance on how to move the climate conversation from the sustainability room to the finance and governance level. We thank the SASB for the great work they have done on climate risk and mainstreaming climate disclosure, and we look forward to collaborating further in the future.”

Tags: Climate Disclosure Standards Board, Climate Risk, G20 Task Force on Climate-related Financial Disclosure, Sustainability Accounting Standards Board, Transparency