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  #471  
Old 06-01-2010, 07:11 AM
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ILLINOIS
http://blogs.suntimes.com/backtalk/2...n_pension.html
Quote:
It looks as if the state Legislature can't even embrace the best of the worst ideas out there for handling a $13 billion deficit.
A plan to borrow $3.7 billion to make a required payment to the state pension systems stalled in the Senate Thursday after it became clear there weren't enough votes for passage. The measure passed the House, on a second try, on Tuesday.
Senate President John Cullerton told us he plans to reconvene the Senate in about two weeks. He hopes at least two yes Republican votes will materialize by then.
As of today, no Senate Republican has come out in support of borrowing in a show of solidarity with their caucus. Last year, 11 Republicans voted in favor of pension borrowing.
….
Skipping a pension payment costs much more than borrowing. If the state skips, it could lose at least $20 billion in investment income over 20 years. Borrowing $3.7 billion now would cost about $1 billion.

http://www.businessweek.com/ap/finan.../D9FVRL700.htm
Quote:
Illinois legislators ended their spring session Thursday without providing money for state pension systems, a decision that blows a nearly $4 billion hole in a budget already deep in the red.
Democratic leaders said they may return to the Capitol this summer if they can scrape together enough votes to approve a plan to borrow enough money to make the state's annual payment to retirement funds for many state employees.
Gov. Pat Quinn scolded legislators for adjourning without finishing their work.
"Our task is not complete, and there's more that must be accomplished before this session officially ends," the Democratic governor said in a statement.
With lawmakers unwilling to raise taxes or dramatically cut spending, the legislative session produced a budget -- with a $13 billion shortfall -- built on borrowing, unpaid bills and one-time revenue maneuvers. Lawmakers left many key spending decisions to Quinn.
….
A major state-employees union said taking the pension money out of the state's nearly empty treasury would do "grossly irresponsible" harm to other government programs. Union leaders believe Illinois should borrow money to make the pension payment.
"We believe the plan to borrow ... is the best of a series of bad options," said Anders Lindall, spokesman for the 40,000-member American Federation of State, County and Municipal Employees.
….
Senate Democrats said Thursday they had not found any Republicans willing to support the measure, which requires a three-fifths majority to pass. Democrats have a large enough majority to approve it if they were united, but some Democrats oppose borrowing.
Senate President John Cullerton, D-Chicago, said legislators could pass the borrowing plan this summer if Quinn can find some Republican support.
"They voted for it last year. It wasn't a bad idea last year," Cullerton said, suggesting the current opposition is political.
Republicans countered by saying they went along last year on the promise that more substantial budget reforms would be made this year. They said Quinn failed to follow through.
"There is no comprehensive solution. All he wants is to borrow more money now," said Senate Minority Leader Christine Radogno, R-Lemont.
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  #472  
Old 06-01-2010, 07:12 AM
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GREECE:
http://www.reuters.com/article/idUSN2713908320100527
Quote:
Greece is fully committed to implementing a program agreed with the EU and International Monetary Fund and is not seeking to reopen issues, including pension reforms, an IMF spokeswoman said on Thursday.
….
Senior Greek government officials said on Wednesday that Greece is trying to renegotiate the terms of pension reform stipulated in the IMF and European Union rescue deals sealed this month.
Pension reform is a critical performance criteria for the debt-stricken country, which negotiated a 110 billion euro ($135 billion) rescue package with the EU and IMF to help it deal with its debt crisis.
Labor Minister Andreas Loverdos said in an interview on Wednesday he was pushing to have the option "to negotiate to the end".

…The European Commission said on Tuesday it had sent a letter to Greece to remind it to stick to the terms of the deal regarding the pension reform.
Reminds me of “negotiating” with my child about stuff she has absolutely no leverage on.

DD: I want to read Captain Underpants!
Me: It's nice to want things. No library books today.
DD: What if I clean up the family room?
Me: I said no.

[time passes]

DD: Look, I finished my homework. Can I have Captain Underpants now?
Me: That's good of you. No, you can read another book.
DD: I DON'T WANNA READ ANOTHER BOOK! =stomps off=
...and then 5 minutes later, I see she's reading her book of Abraham Lincoln jokes.
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  #473  
Old 06-01-2010, 09:08 AM
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Quote:
Originally Posted by campbell View Post
GREECE:
http://www.reuters.com/article/idUSN2713908320100527

Reminds me of “negotiating” with my child about stuff she has absolutely no leverage on.
Reminds me of this video:

http://www.youtube.com/watch?v=aw0aB...layer_embedded

taken from Mish's blog:

http://globaleconomicanalysis.blogsp...ew-jersey.html

Unfortunately, the difference between negotiating with your child and negotiation with an innumerate 50 year old is the 50 year old has a vote.
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  #474  
Old 06-01-2010, 10:53 AM
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Yes, but if he doesn't have the power to print his own money.... reality will intervene at some point.
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  #475  
Old 06-01-2010, 09:56 PM
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CALIFORNIA
editorial – Monrovia, Ca
http://www.pasadenastarnews.com/opinions/ci_15197793
Quote:
But an effort to repeal a 60-year-old tax that was passed by citizen vote precisely to fund the pensions of a city's employees is hardly the way to approach the problem of public workers' retirement funding within a municipal budget.
This kind of scattershot attempt at pension reform is especially irresponsible when it suggests no new funding mechanism to fill the multimillion-dollar budget gap that would be left.
Yet that's just what a small group of Monrovians are suggesting as a way to deal with the cost of City Hall retirements - just get rid of the mechanism that pays for them. Then what? Well, they don't say. So that means that $4.2 million that goes to pay for other city services for Monrovians would instead have to be diverted to the pensions. In a small city, that's a lot of money. We can't see any advantage to Monrovians in the scheme.

Monrovia in 1950 instituted a municipal property tax that's tacked on to homeowners' annual county tax bill in order to pay for city workers' pensions. Just over 1/8 of 1percent of a property's value goes toward the tax. This year, all but about $800,000 of the retirement cost was paid for by the tax; the rest came from Monrovia's General Fund.

You could argue - and we would - that Monrovia city workers over the decades have negotiated pension deals that are literally too good to be true, in that they contribute nothing from their salaries toward the retirement benefits. But such is the case in almost every single city in California. In that sense, the fault lies not with the workers and their unions - rather, it lies with the city council members who failed to do the simple math and buckled under to unreasonable demands.
Since we elected those councils, the fault, in other words, lies with ourselves.
...and who got those councils elected.... was is money from public unions?
http://www.redlandsdailyfacts.com/sa...ty/ci_15200959
Quote:
Candidates know partnering with big labor can mean free and nearly unlimited manpower for grass-roots political campaigning during election time.
While Republican primary front- runner and billionaire Meg Whitman is spending millions on her gubernatorial campaign, Democratic candidate Jerry Brown is counting on union muscle in his campaign for the governor's seat.
"We're going to attack whenever we can, but I'd rather have you attack," Brown told union members at a recent labor meeting in Sacramento.
California's labor unions are expected to do just that for the election this month and in November as they mobilize on behalf of Brown, who has received endorsements from public employee unions.
….
Public employee union organizations in California have spent millions to influence public policy protecting their pension funds. With $212 million spent in the past decade, the California Teachers Association topped a list of major special-interest donors that have spent millions to influence state policy through campaign financing and lobbying. The California Fair Practices Commission, which studies campaign finance, released the report this year.
Among unions and special interests, the report revealed the California Teachers Association made the largest contributions to a political party - the Democrats - with a total of $6.5 million in the past decade.
Ross Johnson, chairman of the California Fair Practices Commission, said the vast amount of special-interest spending drowns out the voices of average voters and intimidates political opponents and elected officials alike.
...so can we go back to blaming the public employees now?
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  #476  
Old 06-01-2010, 09:57 PM
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ILLINOIS

Someone pointed out this site to me, that's about Illinois budget problems in general, but of course, pensions figure very largely here:
http://www.illinoisisbroke.com/news.aspx
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  #477  
Old 06-03-2010, 12:08 PM
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Default Critique of Josh Rauh's projected pension insolvency

http://www.nasra.org/news/article.asp?newsid=188

NASRA has a rebuttal of Josh Rauh's analysis of when some public pension plans are projected to run out of money. But in my opinion, they missed the most obvious criticism: when Josh Rauh says 'run out of money', he means something different from what most people think 'run out of money' means.

To most people, 'running out of money' implies that you're broke, busted. Your assets are down to zero, bupkes, nada, nothing, etc.

Josh Rauh, however, is perhaps somewhat like Jerry's friend in one Seinfeld episode. She finds herself in a washroom stall adjoining one occupied by Elaine. Encountering an empty roll, Elaine asks her neighbor if she might spare at least a square. Jerry's friend replies "I haven't a square to spare." To her, being almost out of TP = being out of TP, with the question of how 'almost' is almost left to the viewer's imagination (IIRC).

http://www.seinfeldscripts.com/TheStall.htm

Josh Rauh uses a methodology that matches future contributions with normal costs, and sets these aside, ignoring them thereafter, because the liability cancels out the asset. However, in reality, contributions go into the trust, whereas the liability associated with the normal cost is for a deferred payment. So, Rauh's projection of insolvency dates is clearly flawed.

Rauh explains his methodology in his paper. But that explanation is missing from other articles that merely summarize his projected insolvency dates.
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Last edited by Dan Moore; 06-03-2010 at 05:29 PM.. Reason: Added link
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  #478  
Old 06-03-2010, 06:12 PM
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http://www.moneynews.com/StreetTalk/...mo_code=A01D-1

Buffett is educatin' the folks in DC. Will the states get to bail out their pension excesses with US federal borrowing? Could be.
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  #479  
Old 06-03-2010, 07:39 PM
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Well, only Illinois really has a chance, b/c Daley et al will have the dirt on the current admin.

Look at what's happened to the Delphi guys. The feds will have no problem with state pensions getting hit.

In any case, it's not going to be the states/municipalities that will get hit first. It will be the muni bond holders.
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  #480  
Old 06-04-2010, 07:53 AM
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CALIFORNIA
editorial on proposed reform
http://www.pe.com/localnews/opinion/...g.18f2f07.html
Quote:
Manipulation of public pension rules increases taxpayers' costs and creates broad suspicion about public retirement benefits. State and local governments already face unaffordable pension costs, and the Legislature should ban schemes that artificially inflate that expense.

The state Senate took a small first step toward reining in pension abuses this week by approving SB 1425, by Sen. Joe Simitian, D-Palo Alto. The bill would curb the use of one-time bonuses, unused vacation time and end-of-career promotions to pad retirement payouts, a practice known as "pension spiking." The legislation would also require newly retired employees to wait at least six months before taking another public sector job. Those changes would save the state an estimated $15 million to $25 million annually. A bill with similar provisions, AB 1987, is moving through the Assembly.
….
Nor should the law allow public workers to retire, start collecting retirement benefits, and then return to public employment -- sometimes at the same agency. Pensions are supposed to provide security for retirees, not an extra monetary perk for people still in the labor force.
Simitian's proposed six-month waiting period barely obstructs that practice, however. There is no reason the public should ever pay retirement benefits as well as a salary to the same person at the same time. Those who want to continue working in public employ should not expect to collect pension checks until they truly retire.
....
Legislators should, for example, raise the retirement age for public workers from 50 or 55 to levels closer to those in the private sector. Government should limit the size of pensions employees can accumulate, as some can retire with benefits equal to 90 percent of their salary. And workers should contribute more toward their own retirements.
Oakland
http://www.eastbayexpress.com/ebx/th...nt?oid=1792232
Quote:
The one bright spot in Oakland has been the substantial drop in violent crime in the past eighteen months. But a massive layoff of police officers threatens to reverse that promising trend. Police Chief Anthony Batts told the Oakland Tribune that he has serious concerns about cutting so many officers and how it will affect crime fighting in Oakland. But the city council may have no choice — unless the well-paid members of Oakland's police officers' union agree to start contributing to their own pension plan.

Oakland awarded the union its generous benefits, which include the ability to retire at age fifty with nearly full pay for life, at a time of relative prosperity. The council figured that over-the-top pension benefits would help the city attract and retain quality officers when unemployment was low and the competition for cops was fierce. But in a time of record joblessness, it's clear that Cadillac pensions are not only unnecessary, they're foolish.

To his credit, City Councilman Ignacio De La Fuente, who helped broker the cops' sweetheart pension deal, openly proposed last week that the police union should begin shouldering its share of the burden. In an open letter to the community published on the local blog, A Better Oakland, De La Fuente said police officers should contribute at least 9 percent of their pay to their own pensions. Although it would amount to a significant pay cut, it's still less than the 13 percent that firefighters contribute to their pensions.

But the cops' union is under no obligation to reopen its contract. That's where the police layoff plan comes in. Union officials will be hard-pressed to watch 200 of their fellow officers lose their jobs so that the other 600 won't have to start paying toward their own pensions.
legislation on placement agents
http://www.fresnobee.com/2010/06/02/...placement.html
Quote:
The Assembly today passed legislation clamping down on placement agents, the middlemen at the heart of an influence-peddling scandal at CalPERS.

AB 1743 passed the Assembly on a 56-9 vote, only two more votes than it needed. Because the bill amends the Political Reform Act, it required 54 votes, a two-thirds majority.

The bill had failed to pass earlier in the day but was revived in a late-afternoon vote. It now goes to the Senate.

The bill, by Assemblyman Ed Hernandez, D-West Covina, requires placement agents to register as lobbyists. It also forbids the agents' clients from paying them on commission. Hernandez argued that commission fees invite corruption.

Placement agents are hired by private equity firms and other investment firms to help win deals from CalPERS and other public pension funds. One agent, former CalPERS board member Alfred Villalobos, has been sued by the state over allegations that he bribed three officials with the pension fund to influence investment decisions. Villalobos has earned more than $50 million in commissions from CalPERS deals.

Opponents said the bill would effectively kill the placement agent industry in California - and harm small, minority-owned investment firms that need to hire agents to gain access to pension fund decision-makers. CalPERS has said small firms have plenty of access to the fund.
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