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  #381  
Old 06-25-2011, 09:37 AM
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Originally Posted by jbken View Post
Would anyone go to the ABCD on this one:

http://burypensions.wordpress.com/20...ve-bargaining/
maybe you should attend this:
http://www.actuary.org/webcasts/prof_june11.asp

and ask the presenters how this work represents a responsibility to the public
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  #382  
Old 06-27-2011, 11:17 AM
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try out a link to the new site I post at: (I post at the old site, too, but I like the layout of the new place...and nice Cassandra pic they slapped on the post)
http://www.conservativecommune.com/2...up-27june2011/

full post behind the spoiler, and as per usual, not all of it is on public pensions - just most of it
Spoiler:


GREECE? ISN'T THAT THING OVER YET?

No, it's not. Various parties are having fits over having to deal with reality, and I'm not just talking about the Greek populace.

A vote is being taken on Wednesday (or at least, that's the current schedule) in Greece on their latest austerity package....and this is just to get the short-term cash flows promised in various bailout plans previously.... it doesn't take care of their long-term debt problem.

A Bank of England official warns of bank exposure to PIIGS debt, though my understanding is that French and German banks have it much worse. I like the timing of the stress test results release - I'm thinking it will be coming out right about the time the credit agencies will say Greece is actually in default.

Other eurozone countries aren't looking too hot, either.

Leo Kolivakis writes about many things, some personal, but you should scroll down to item 4, where he talks about Greece. An excerpt:


Quote:
Let me share with you the ugly reality on Greece's woeful tax collection system. Everyone in Greece knows this, but let me give it to you straight. A close buddy of mine, a radiologist, is now vacationing in Greece with his family. His aunt recently had to replace a heart valve and she slipped an enveloppe of 12,000 euros to the cardiovascular surgeon so he would do it. In Greece, this enveloppe is called "fakelaki" and if you don't have the money, you're dead. Specialist surgeons working at public hospitals are typically the worst offenders, but there are others notorious for accepting huge sums and they declare nothing. And most of them pay off Greek tax collectors who are equally corrupt and greedy.
The U.S. has a long way before getting that corrupt, but those officials deliberately trying to weasel themselves around the rule of law (see the PUBLIC FINANCE section) had best beware and be aware... what you may think is a show of power may be what ultimately undermines it.

GENERIC PENSION ISSUES

Joshua Ruah, the Northwestern prof who has been slicing and dicing public pension obligations in all sorts of ways, has put out a new paper: the revenue demands of public employee pension promises....and he's asked for responses. Here's some of the responses he's gotten so far. And another response (from governmental pension plan administrators) in the NYT.

Stronger pensions disclosures during muni issues? Sounds like a good idea to me. I wonder why he thinks it helps only bondholders -- ask the pensioners of Prichard whether they would've been well-served by better disclosures earlier. Good info protects not only bondholders but also public employees and taxpayers.



PUBLIC UNION INFLUENCE: MELTING! MELTING! OH, WHAT A WORLD!

Our first story comes from across the pond: UK looks to rein in their public unions. This should be fun. I think various U.S. states should take notes, including the bit about not paying union leaders who don't actually work for the state.

Striking Canada Post workers discover that the government has a lot more power than they do. Huh. How did that happen?

(note: Crown Corporations are just government-run and -owned entities. I recently found out that in some provinces, you get regular car insurance through a Crown Corp. Interesting)

What will the unions in Wisconsin do now? I'm thinking whining is a continuing strategy.

Some take the "defeat" in NJ as a harbinger of tough times for public unions across the U.S....meh. Were they all fired? Their pensions repudiated? No. It was hardly a defeat.

Yet.

Buck up, unions - you've got at least one guy on your side.


PUBLIC FINANCE

Laws? Limits? Ceilings? Pfft. Like that could stop a latter-day messiah who has stuff to get done. I'm curious what the legal status of such debt issues would be.... and I bet institutional investors that suck up these issues would like to know this as well.

Though the bondholders are probably a bit more concerned with the CBO cashflow projections.

VDH points out that Thatcher's inevitabilism is coming due: i.e., other people's money is running out. Bribing people with their own money has always been a difficult balancing act to keep up, and the problem has been in the West is that they've not been producing enough people to keep that going. Oh, tant pis.

Ex-mayor of L.A. warns about the coming bankruptcy of cities, agreeing with Meredith Whitney...with you-know-what playing a major role. Some cities think that they see the light at the end of the tunnel...right before they get hit by a train, I'm thinking.

CALIFORNIA

Public employees in Costa Mesa take on "big" boss to win big pensions.... well, if they can hang onto them. These are chickens I wouldn't count on hatching if the nest eggs aren't even there. I guess they'll learn what "municipal bankruptcy" means soon enough. It doesn't mean that pensions get paid, if the plan is underfunded.

California school admins living large in retirement. I am not fond of the "100K PENSIONS!!!" stories, because it's not individual pensions like this that are necessarily breaking the back of plans. You can have a whole bunch of relatively small amounts killing you, if paid to enough people, for long enough. But these things grab headlines, and stir up envy... and it's always amusing to see the politics of envy redound upon those who love to use it themselves (which is often the way.)



FLORIDA

Having to contribute to your benefits to the tune of 3 percentage points? A crippling tax. Oh baybee. Can we use that when the feds want to increase our taxes to pay for the gravy train they want to continue? If that's such a hardship, of course, the workers are always free to quit.

HAWAII

Pension reform bill signed requiring higher retirement ages and service levels.

NEW JERSEY

After the NJ pension reform passes, the lawsuits begin. Huzzah! Let us not forget the tough times lawyers have fallen upon with their loss in the Walmart case.

The unions also promise to hit back in votes. Good for y'all! That means you're going to stop voting for Democrats, right? Or are you just going to admit that you're stuck? (see article for answer - like with the open borders crowd, reparations extortionists, and gay rights activists, they know they're stuck with the Dems. So.... )

Christie taking his victory lap.

John Bury pricks everybody's balloons in this quarrel.

NEW YORK

The legislature continues to debate letting districts borrow money and pretend they're real contributions to the pension plans.

The NYT whines that it was bullying in NJ but it's bargaining in NY. I don't know - sounds like some of the NY unions don't see Cuomo's actions in quite so benign a light.

OHIO

Employees run for the exits, trying to get theirs while they can.

RHODE ISLAND

Yet another group to look at the state's pension mess and give suggestions for a fix. They've been given a task that's well-nigh impossible:
Quote:
In tackling a subject that ultimately may mean breaking promises, Raimondo has said that any solutions need to ensure fairness among the new employees, veteran workers and retirees. Newer state employees and teachers bear a greater burden now, she says, because most of their contributions to the retirement system pay for their predecessors’ benefits.

Raimondo stresses that solutions must be fair to taxpayers, as well.
What happened to the last set of suggestions? Let's see... raising the minimum retirement age from 59 to 65 (drastic!), and offering up a DC/DB hybrid akin to what federal employees get... shot down even before it got to a legislative committee.

What I'm saying is I'm adding this group to my list of intentions for St. Jude.

UK

Isn't this cute - an "industrial action" from public employees over their pensions being changed. Yes, those schoolteachers are working hard in the mines and the clerks are grinding away with their wrenches. Supposedly, the Tories are asking parents to sub for teachers (yes, I suppose if you've seen it on a Simpsons episode, it's a gimmick).

Some angst over making the women's retirement age the same as men. I always wondered about this -- in the developed countries, women have always lived longer. Why were they given younger retirement ages?


Cross-posted to POWIP.
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  #383  
Old 06-27-2011, 12:23 PM
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Originally Posted by jbken View Post
Would anyone go to the ABCD on this one:

http://burypensions.wordpress.com/20...ve-bargaining/
Why? Because the results of the study aren't what you'd want them to be?
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  #384  
Old 06-27-2011, 01:56 PM
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Why? Because the results of the study aren't what you'd want them to be?
No, because the results of the study were dictated by the client and an obviously faulty assumption (nobody would leave over 25 years) was used to justify an exorbitant benefit giveaway. This is either incredible sloppiness or incredible criminality and it's using the good name of the actuarial profession (in some circles) to deceive.
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  #385  
Old 06-29-2011, 02:20 PM
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Wisconsin and Jersey lead the way in actually dealing with public pension costs. The heavy lifting has just started though. There are lots of future tax dollars at play yet.

Of course, Pomeroy and the Segal team are singing Kum-By-Yah. No problem here, just move along.
http://abcnews.go.com/Business/defen...ry?id=13950342
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  #386  
Old 06-29-2011, 02:57 PM
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Originally Posted by jbken View Post
Would anyone go to the ABCD on this one:

http://burypensions.wordpress.com/20...ve-bargaining/
I agree with your assessment of this report. I encourage you to go to the ABCD on this.
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  #387  
Old 06-29-2011, 04:36 PM
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I agree with your assessment of this report. I encourage you to go to the ABCD on this.
Thanks, Dan. I really appreciate the time you spent to look it over.

I'm in the process of gathering more reports since the negotiator for the county and other county officials kept referring to this type of report as being used for all their negotiations going back to 2005 with 21 different unions. So after I get those reports to review and my suspicions are confirmed I will likely make some noise somewhere.
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  #388  
Old 07-01-2011, 01:08 PM
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from John's most recent post:
http://burypensions.wordpress.com/20...ons/#more-1092

Quote:
Basically those are the highlights of the Colorado decision. It comes down to the fact that COLAs were adjusted in the past (though usually up) so they can be adjusted in the future. Apparently since nobody sued when their COLAs increased it means they’re precluded from complaining now that they have decreased.

Using that logic then wouldn’t New Jersey be able to reduce all benefits since in 2001 there was a 9% benefit increase that applied to everyone, including retirees? Nobody sued then so what is to stop New Jersey, on account of the “global economic catastrophe”, from reducing all retiree benefits to what is affordable (basically 40% of what is being paid now)?

It will be interesting to see how the court cases work out.
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Old 07-05-2011, 04:25 PM
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via Kenny - Pension Plan McCarthyism - opinion piece from exec director of Missouri State Employees’ Retirement System

http://www.plansponsor.com/OpinionsA...?id=6442480472

Some excerpts:
Quote:
Now fast forward 50- plus years and we find ourselves facing another version of McCarthyism. This time the targets are public employee retirement systems, public employee unions and anyone who speaks up in defense of either. Outrageous examples are cited as if they are typical. The fact is that they are not typical but they have been repeated with such regularity that it is understandable that the masses would think them to be commonplace. Are there problems? Absolutely! Are the problems exceptions to the rule? Absolutely! Are the problems that exist being addressed? Absolutely! Is it likely that you will hear or read about either of the last two points? Absolutely not! (Grade school geography students who get their information from media reports on public pensions will soon be drawing maps of the United States consisting only of California, Illinois, and New Jersey.)

....
Short-termism and greed seem to be key drivers behind the reluctance to address the important long-term policy considerations. If you can cut personnel costs today, you can increase the next quarterly earnings report – getting rid of public sector defined benefit plans will take pressure off of corporations to think longer term. In the public sector, policy maker term-limits are also taking a toll on long-term planning. On both the private and public sides, interests are aligned with short term achievements.

The greed factor should not be discounted either – the simple hint that a defined contribution approach may be considered will result in an onslaught of service providers who are more than willing to help pave the way. Could that be because there are fortunes to be made in transitions from defined benefit plans to defined contribution plans? In the extreme short term, it seems that parties who are interested in decimating public sector defined benefit plans are more than willing to pay for so-called independent academic studies that, for the most part, reach the same shortsighted and flawed conclusion regarding public sector defined benefit plans. The current full-court press against defined benefit plans is seemingly, at least in part, attributable to the fear of the defined benefit plan opponents that if they don’t kill defined benefit plans soon they will recover from the “great recession” making it just that much more difficult to do them in.

....
It has been suggested that one way to downsize government is to make it sufficiently unattractive to workers that they will not be inclined to pursue a public service occupation. The irony in this is that the best way to downsize while sustaining or improving productivity is to attract and RETAIN a highly skilled and motivated workforce. Why are we not pursuing personnel and compensation policies that will facilitate that rather than move in lock-step with corporations in a race to the bottom? (The term “corporations” is used here to reference rank and file employees – executives typically have additional perks to prop up any shortfalls that might result from a market calamity that would reduce their defined contribution plan account balances.)

I would like to see the stats about how DB plans attract good employees. I bet there must be something out there, even if it's just to show it's a good way to get older people to work for you.
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  #390  
Old 07-08-2011, 05:16 PM
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http://www.nytimes.com/2011/07/08/bu...1&ref=business

Quote:
The board that writes accounting rules for states and cities plans to issue a proposed solution Friday to one of the hottest disputes in public finance, whether governments are truthfully disclosing the size and condition of their pension funds, and how to fix any deficiencies.

The suggested changes — which are voluntary rules — are an effort to straddle the gaping divide between public sector unions, their supporters and public pension consultants on one side and, on the other, economists who have criticized the official fund disclosures as misleading and fiscally unsound.

Among the recommendations to be proposed by the Governmental Accounting Standards Board is a new way to calculate today’s value of pensions that will be paid in the future, in response to complaints that the current method drastically understates what governments owe.

The rule makers would also bar actuarial techniques that some states and cities have been quietly using to make it look as if pension cuts for the workers they will hire in the future are already producing savings today. That would appear to affect states including Illinois, Rhode Island, Ohio, Texas and Arkansas.

A third change would require cities and towns that participate in big, state-run pension systems like the New York State Common Fund to report their share of the systems’ total obligations. Not all currently do so, making it impossible to trace such promises back to the municipalities that have to pay them.

....
The other side responds that most public pension plans look viable because they really are viable. It has urged the accounting board to preserve the current method, in which governments use their expected rates of return on the assets in their pension funds.

The accounting board’s proposed solution would require governments to blend the two rates. Each government would be required to project all the pensions owed in the coming decades and all the investment returns it expects. By analyzing these cash-flow projections, governments would be able to see whether they were setting enough money aside, and if not, which year in the future they would run out, called the “cross-over point.”

Until now, analysts who have warned that some pension funds could run out of money and tried to estimate when have been accused of fear-mongering and using faulty assumptions. Mr. Attmore said the rule makers hoped to keep the projections honest by making governments explain how they calculated their cross-over points.

In addition, governments would have to provide a sensitivity analysis, showing how changes in their assumptions would affect their final numbers.

After projecting how many years their pension assets would last, each government would use that information to calculate its own discount rate. It would be a blend, combining the rate governments now use for the years up to the cross-over point, and a more punitive low-risk rate for the years after that. The low-risk rate would be based on an index of tax-exempt municipal bonds, Mr. Attmore said.

Governments would then spread the cost over the estimated working lives of their employees. If the portion that workers have already earned exceeds the fair value of the pension assets, the excess would go onto the government’s balance sheet. Benefits that workers expect to earn in the future would not be shown on the balance sheet, Mr. Attmore said. Currently, all pension disclosures are tucked away in footnotes.

....


The Securities and Exchange Commission has been investigating certain states’ and cities’ pension numbers for possible fraud, but Mr. Attmore said he could not comment on the legal implications for governments whose current methods would not be allowed in the future.

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