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  #571  
Old 07-13-2010, 01:47 PM
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Are early retirement subsidies a material part of the funding problem?
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  #572  
Old 07-13-2010, 01:49 PM
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When people are retiring at age 50, with 70% of final salary.... yeah, that's a big problem.

Mind you, that's not necessarily "early retirement" - in the U.S. such retirement ages are more common for cops and firefighters. But in Greece, all sorts of ridiculous jobs had very low "full" retirement ages.
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  #573  
Old 07-13-2010, 06:43 PM
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I have a better idea: Lump sum payout equal to the sum of the last 5 years of base salary ... zeroes count.... overtime does not.
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  #574  
Old 07-16-2010, 02:07 PM
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Pension Tsunami is showing lots of political discussions on many different plans.

http://www.sacbee.com/2010/07/16/289...igh-price.html

This is an interesting example why we need to change the accounting rules.
Show the full actuarial value of these special deals and make the agencies pay for it in the same year (no amortization), so we can see what the actual cost would be.
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  #575  
Old 07-16-2010, 02:32 PM
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Ok ok, I'll post something by tomorrow....

I been busy! Greenwich is way cool!
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  #576  
Old 07-17-2010, 10:40 AM
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tomorrow came and went

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  #577  
Old 07-17-2010, 10:50 AM
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It did?

From where I sit, tomorrow is only a day away.....

You ought to wait til Sunday [today's tomorrow, as opposed to today, which was yesterday's tomorrow.... [when I posted]] before you rag on me.
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  #578  
Old 07-17-2010, 12:09 PM
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CALIFORNIA
http://calpensions.com/2010/07/16/pe...d-lift-sb-400/
Quote:
A 17-page CalPERS sales brochure told legislators a decade ago that a major increase in state worker pension benefits would not increase state costs, but annual state payments to the pension fund have soared from $159 million to $3.9 billion since then.

The professionally designed pamphlet apparently helped build a persuasive case in 1999 for SB 400, which sailed through the Senate on a 39-to-0 vote and passed the Assembly 70-to-7.

But now Gov. Arnold Schwarzenegger wants to roll back pensions for new state hires to pre-SB 400 levels. The governor with only a half year left in office has said he won’t sign a new state budget without pension reform.
Searching... searching... not seeing the word "actuary" in there.

Sacramento
http://www.businessweek.com/ap/finan.../D9GV30P01.htm
Quote:
A judge has ordered Sacramento County's retirement system to make its pension information public.

In a ruling this week, Sacramento County Superior Court Judge Allen Sumner decided the names of retirees and how much they receive should be released.

The lawsuit was brought against the Sacramento County Employee's Retirement System by The Sacramento Bee and First Amendment Coalition.

The groups are seeking details of pension spending, which has come under scrutiny as local governments and the state deal with growing deficits.
And more on the same [it's posted at the site of one of the parties of the lawsuit, but it looks like it originally came from somewhere else]
http://www.firstamendmentcoalition.o...sion-pay-data/


From a Calpers official
http://www.dailynews.com/opinions/ci_15527489
Quote:
N the debate over the future of public pensions, there has been a lot of misinformation and misunderstanding about pensions, including in the pages of this paper. I would like to set the record straight by correcting a few pension myths and providing a fuller picture.

First, here are some important facts you should know:

The average CalPERS pension is about $25,000 per year.

Half of CalPERS retirees receive $16,000 per year or less.

Seventy-eight percent of retirees receive $36,000 per year or less.

It's been reported that some of our members earn a pension of more than $100,000 a year. While true, it represents less than 2 percent of all our retirees, specialized skilled employees or other high-wage earners who worked 30 years or more and served in high-level management positions.

Pension costs for the state of California are less than 5 percent of the state's general fund.

It is important to remember that pensions are a shared responsibility. Every dollar paid to CalPERS pensioners comes from three sources - investments, employers and members. Approximately 63 cents of every dollar currently paid in pensions comes from our investments.
....
The studies ignore our diversified investment portfolio that has been time-tested during our 78-year history. If CalPERS had followed the recommended approach in the study, we would have given up billions of dollars in investment earnings that have helped finance pensions.
Oh, do tell. So the average performance is what matters, not what it's doing relative to the liabilities? And the volatility doesn't matter at all as long as the average is high?

So I'm guessing Calpers is not much for asset/liability risk assessments. They just analyze the two separately, do they? I'm sure they will work out well for them.
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  #579  
Old 07-17-2010, 12:12 PM
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ILLINOIS

La la la, merrily we ride along in this handbasket... where are we going?
http://www.chicagotribune.com/news/o...,1470649.story
Quote:
Shortly before Tim Baldermann retired as Chicago Ridge's police chief, the town boosted his salary by more than $70,000, handing the 44-year-old as big a paycheck in retirement as he earned full time on the police force.

The deputy police chief, who sat on the pension board, received a similar deal. As it did for Baldermann, the town added Dennis Kapelinski's unused vacation time to his final salary — in exchange for opting out of insurance coverage — and gave him a 20 percent raise just before he retired, documents show.

....
Towns have long been aware of the financial time bomb created by pension deficits, but what happened in Chicago Ridge was hardly unique. Some municipalities are sweetening deals for their top police and fire administrators even as they call for pension reform in Springfield.

Illinois' pension system — including police, fire and public-sector employees — is the most underfunded in the nation, according to the Pew Center for the States, with only about half the assets needed to cover a staggering $60 billion in liabilities.
....

The worst-funded pension among full-time police departments is in Willow Springs, the figures show. Its police pension is just 16 percent funded — with $575,000 in assets versus $3.5 million in liabilities.

It's also a town that has been generous to a retiring administrator. Three weeks before former Police Chief Jerome Schultz retired in 2002, the town boosted his salary from about $60,000 to about $80,000 a year, records show.
.....

Unlike its broader regulatory powers over insurance companies and brokers, the Department of Insurance has little power over local police and fire pension boards, which are staffed by five unpaid trustees who often have no financial backgrounds.
I can just feel this will end well....


From the conservative website, National Review Online:
http://www.nationalreview.com/excheq...eltdown-update
Quote:
The state of Illinois — broke, overleveraged, and still refusing to get its accounts in order — is up to something interesting: selling bonds to meet its pension obligations. As one of the many states that refuse to set aside adequate money to fund its public-employee pensions, Illinois is headed to the debt markets to raise $3.7 billion for pension liabilities to get it through the year. This is a double dip: In January, Illinois sold $2.4 billion in bonds for pension obligations. Actually, make that a triple dip: It sold $10 billion in bonds to fund its pension liabilities in 2003. “States don’t traditionally fund their pensions with debt,” says CNN in a nice bit of understatement, “but the practice frees up other money that can be used for operations.” The double whammy here is that Illinois’s pensions are in trouble because it already spent the money it needed for its pension contributions in past years on other spending: Which is to say, Illinois is borrowing money it will have to repay eventually to repay the pension money it already spent to pay for other spending it couldn’t afford then and can’t afford now. If you’re wondering where Barack Obama developed his fiscal finesse, you don’t have far to look.

Naturally, it gets worse, and every taxpayer in the United States will be partly on the hook for Illinois’s fiscal incontinence. That’s because they’re also using something called “Build America Bonds,” a financial instrument created by Obama’s stimulus bill, to fund what amounts to a social-services program under the guise of a “capital project.”
MISSOURI
http://www.google.com/hostednews/ap/...rp8-QD9GV4OK00
Quote:
The good pension perks of government work are about to lose a bit of their luster for new Missouri employees.

State lawmakers gave final approval Wednesday to legislation requiring new state workers to pay a portion of their wages toward their pension funds and to stay on the job longer before drawing their retirement benefits.

Supporters said it was an essential move to stave off a future insolvency for Missouri's main pension funds, which currently are financed exclusively by investments and state subsidies. Opponents equated it to a tax on state workers, who already have been targeted with layoffs and denied cost-of-living raises to try to balance Missouri's budget.

The retirement system changes — effective only for workers hired beginning in 2011 — are projected to save the state $659 million over the next decade. Part of those savings are intended to offset a 10-year cost of up to $150 million for new automaker tax breaks authorized under a separate bill passed Wednesday.

The retirement legislation passed the House 84-53, getting just two more votes than the required minimum. It passed the Senate 25-5 and now goes to Gov. Jay Nixon.

Under the bill, new state employees will need to contribute 4 percent of their pay toward their pension benefits. They also will need to spend at least a decade working for the state to qualify for a pension, instead of the current five years.

And the state's standard retirement age would be increased from 62 years old to 67 years old. State employees currently also can retire when their age plus the number of years working for state government equals 80, so long as they are at least 48 years old. That option would be increased to a sum of 90, with workers needing to be at least 55 years old.

But lawmakers and other elected state officials would continue to get more favorable treatment. The bill increases their own standard retirement eligibility from age 55 to 62, with six years of service necessary for lawmakers and four years for executive branch officials.
And a tie to a sweetener given to Ford:
http://www.businessweek.com/ap/finan.../D9H04VP80.htm
Quote:
The attempt to save Ford's private-sector jobs will be financed from the paychecks of new public-sector employees. That's because the automotive legislation is linked to a separate bill passed Wednesday requiring new state employees to start paying into their pension funds.

Over 10 years, the automaker incentives could cost Missouri $150 million. The pension changes could save a projected $659 million over the next decade for three of Missouri's main retirement systems. It would require state employees hired after January 2011 to contribute 4 percent of their paychecks toward the pension fund, delay their retirement and require them to work longer to gain eligibility for a pension.

"What we tried to do is maintain the solvency of our state pension fund," Nixon said, adding that the fix was much better than what he was seeing in other states.
Well, money is fungible....

NEW YORK
from the liberal site firedoglake
http://seminal.firedoglake.com/diary/59846
Quote:
Today, the Comptroller of the City of New York along with the presidents of several large unions sent a letter to some of the biggest baddest banks in the foreclosure mess and told those banks to get their acts together and start making mortgage modifications.

In a press conference in lower Manhattan, Comptroller John Liu, Michael Mulgrew, President, UFT, George Gresham, President, 1199 SEIU, John Samuelsen, President, TWU Local 100, and New York Communities for Change announced a letter sent to Citigroup, JPMorgan Chase, Bank of America and Wells Fargo demanding that the banks do “everything possible” to avert foreclosures.

The heft and power of these entities as depositors and investors is such that they expect the banks to sit up and take notice. The banks have a deadline of September 1st or 45 days to respond with a plan.
....
One of the things that frustrates me is that neither the servicers nor the trustees of RMBS will tell you who the investor is. They will often say that the investor won’t let them modify. This makes no sense.

As I previously pointed out, the investor almost always does better by modification than foreclosure. The servicer does better in foreclosure. Yet the trustees, who owe a fiduciary duty to get the best return for the investor, seem to prefer the foreclosure route which results in a near total loss for the investor.

The investors have the ability to force modifications by suing the trustees to make them do those modifications.
Hmmm.


OREGON
http://www.businessweek.com/ap/finan.../D9GV08PG0.htm
Quote:
Oregon has joined a lawsuit against the former mortgage giant Countrywide Financial over pension fund losses.

The state said in press release Wednesday that the Oregon public retirement system lost $29 million after buying $200 million in mortgage-backed securities.

The state says that contrary to documents that Countrywide provided, the loans in the investment fund didn't meet credit and appraisal standards.

State officials said in a press release that the Iowa public pension fund is the lead plaintiff in the suit. It was filed earlier this year in California, where Countrywide had headquarters.

GREECE
http://www.forbes.com/2010/07/14/gre...analytica.html
Quote:
Greek civil service unions have declared a 24-hour public-sector strike Thursday in protest against reform of the public pension system that will raise the pensionable age, reduce the replacement ratio (pension level relative to earnings during employment) and cut upper-range entitlements by about 7%.

The pay-as-you-go pension system is fragmented, inequitable and has unfunded liabilities of about 400 billion euros ($509 billion), or 170% of GDP. The average dependency ratio of 1.7 workers per pensioner is below the viability ratio of 2:1 (to be healthy, it should be at least 3:1). In addition to regular subventions, the government was forced to make emergency grants of 2.5 billion euros in 2009 to meet pension outlays, and could be looking at another 3.8 billion euros this year. Total state pension commitments are equivalent to 13.5% of GDP. Without change, that could rise to an unsustainable 26% by 2060; the reforms are designed to limit it to 16.5%.
And the accompanying protest?
http://www.businessweek.com/ap/finan.../D9GUVFJO1.htm
Quote:
Hundreds of Greek police, firefighters and harbor police in Athens are holding a peaceful protest against the government's pension reforms.

Unionists say the reforms will increase their minimum retirement age to 60, from around 53. They say it will be hard to do their job effectively at that age.

More than 400 people took part in Wednesday's protest in central Syntagma Square, in front of parliament. They displayed banners, including one that invited German Chancellor Angela Merkel to "come and join us on patrol."
...why? Maybe Angela Merkel should invite the police and firemen to Germany, so they can look at the people whose money they're taking.
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  #580  
Old 07-18-2010, 03:09 AM
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Nice actuarial presentation on the issue:
http://www.chicagofed.org/digital_as...ture/weiss.pdf

The following phrase comes up more than once:
Quote:
Little incentive or urgency to fix problem –or the “It won’t be my problem after I am out of office” mentality
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