Actuarial Outpost
 
Go Back   Actuarial Outpost > Actuarial Discussion Forum > Pension - Social Security
FlashChat Actuarial Discussion Preliminary Exams CAS/SOA Exams Cyberchat Around the World Suggestions


Reply
 
Thread Tools Search this Thread Display Modes
  #751  
Old 05-23-2017, 05:05 PM
campbell's Avatar
campbell campbell is offline
Mary Pat Campbell
SOA AAA
 
Join Date: Nov 2003
Location: NY
Studying for duolingo and coursera
Favorite beer: Murphy's Irish Stout
Posts: 83,266
Blog Entries: 6
Default

CALPERS
CALIFORNIA
GOVERNANCE

http://www.sacbee.com/news/politics-...151749282.html

Quote:
With one member bowing out, CalPERS has an unexpectedly open election

An outspoken member of the CalPERS Board of Administration is not seeking re-election, setting up a wide-open race to succeed him.

J.J. Jelincic, an eight-year incumbent and CalPERS investment officer, told the pension fund in late March that he planned to run for another term.

But, he did not file paperwork to run by this week’s deadline. He posted a message on his website saying he would not be on the ballot.

Jelincic’s message further urged voters to press candidates for more information about CalPERS’ investment strategies. He did not return a phone call from The Bee by deadline.

“I originally ran for the CalPERS board because I thought the board was not doing its job and was too often being manipulated by staff. After eight years on the board, I can tell you it was even worse than I realized,” he wrote.

Three candidates have filed paperwork to run for Jelincic’s seat. They are State Personnel Board member Richard Costigan, state scientist David Miller, and Long Beach Unified School District member Felton Williams.

.....
The CalPERS board has 13 members. Some are elected by public employees and retirees, others are appointed by the governor and two are statewide elected officials.

http://www.nakedcapitalism.com/2017/...-jelincic.html

Quote:
Board Member JJ Jelincic Calls Out CalPERS’ “Roy Cohn,” General Counsel Matt Jacobs

CalPERS’ “most effective director” JJ Jelincic may be leaving at the end of the year, but he is not going quietly.

Jelicic criticized the star chamber that recently sanctioned him in his most forceful terms to date. From the Board of Administration meeting last Wednesday, starting at 4:08:
...
Quote:
Board Member JJ Jelincic: Joseph McCarthy had his Roy Cohn and his secret list of commies in the State Department.

Bill Slaton has Matt Jacobs and his list of secret charges.

I have my own secret file and I’m going to share some of it with you today.

When Jon Ortiz left the Sacramento Bee, it was a great loss to the paper. Here, I have a reprint of his article from December 28, 2013 entitled “Securities and Exchange Commission looking into CalPERS stock purchases”.

What’s really amazing about this story is Misters Slaton, Jacobs and Feckner all believe it was based on my March 14, 2016 comments during an open Investment Committee. Who knew Jon was a time traveler?

How did these gentlemen figure it out?

Why do I believe they think that? I can’t tell you. The belief is based on a super-secret document. If I told you, I would undoubtedly be sent to yet another training.

On the other hand, Bill Slaton could actually come up with charges. If he did so and would make those charges public, just like he did his demand for my resignation, I would have the ability to offer a public defense.

I think it is called transparency.
.....
Jelincic was repeatedly promised that his disciplinary hearing would be held in public. CalPERS engaged in a bait and switch. To his credit, even though Jelincic’s persecutor Bill Slaton proposed a star chamber, board president Robert Feckner initially agreed Jelincic’s request for a public process. Feckner also pointed out that since the claim was that Jelincic had engaged in leaks, that there would be no harm in discussing the allegations, since the matters at hand would be public. 1

Feckner reaffirmed that commitment after the mid-January board meeting, on January 23, as you can see from the first document embedded at the end of this post. Feckner’s retreat from transparency and fair dealing started on February 10, as shown in the second embedded document. This was the sole content of an e-mail to Jelnicic, with a cc to Feckner’s assistant Karen Perkins. The commitment to putting the matter on the agenda and having the Board render judgment has been abandoned; now we have a private process, with the initial meeting supposedly for Slaton to present his charges, and Jelincic to have an opportunity to respond, specifically:
Quote:
But whether or not you say anything at the meeting, my thought is that you’ll have two weeks to get back to me, at which time we’ll meet again and you can say whatever you’d like and present whatever documents you’d like. After that, I’ll determine whether any action is necessary.

I assure you that you and Bill will have ample opportunity to present information and respond before any decision will be made.

The next day, Jelincic sent a notice of adverse interests to CalPERS’ general counsel, Matt Jacobs. For non-lawyers, this was a legal notification to CalPERS that its position was opposed to Jelnicic and that CalPERS’ lawyers therefore could not represent him. Jelincic’s status as an adverse party also implies that any documents or communication to him or his legal representative with respect to this disciplinary matter would not be subject to attorney-client privilege. There is precedent for board members being adverse to CalPERS, the highest profile example occurring in 2001, when state controller Kathleen Connell sued CalPERS.


.....

Slaton and Jacobs had over two months to prepare for a session that was promised to be held in public. The very fact that they maneuvered it into private strongly suggests whatever “complaints” Slaton had would not stand up to scrutiny.

__________________
It's STUMP

LinkedIn Profile
Reply With Quote
  #752  
Old 05-23-2017, 05:10 PM
campbell's Avatar
campbell campbell is offline
Mary Pat Campbell
SOA AAA
 
Join Date: Nov 2003
Location: NY
Studying for duolingo and coursera
Favorite beer: Murphy's Irish Stout
Posts: 83,266
Blog Entries: 6
Default

CALPERS
CALIFORNIA

https://www.calpers.ca.gov/docs/boar...item-8a-01.pdf

Quote:
Reporting on Participating
Employers
Quarterly Report
Finance & Administration Committee
May 16, 2017
....
[slide 3]

CalPERS Retirement Program
3,018 - Total Employers in Retirement Program

1,496
School Districts

1 State of California

1,521
Public Agencies

__________________
It's STUMP

LinkedIn Profile
Reply With Quote
  #753  
Old 05-23-2017, 05:31 PM
campbell's Avatar
campbell campbell is offline
Mary Pat Campbell
SOA AAA
 
Join Date: Nov 2003
Location: NY
Studying for duolingo and coursera
Favorite beer: Murphy's Irish Stout
Posts: 83,266
Blog Entries: 6
Default

http://crr.bc.edu/working-papers/act...tion-approach/

Quote:
Actuarial Inputs and the Valuation of Public Pension Liabilities and Contribution Requirements: A Simulation Approach

byGang ChenandDavid S. T. Matkin
WP#2017-4

Abstract
This paper uses a simulated public pension system to examine the sensitivity of actuarial input changes on funding ratios and contribution requirements. We examine instantaneous and lagged effects, marginal and interactive effects, and effects under different funding conditions and demographic profiles. The findings emphasize the difficulty of conducting cross-sectional analyses of public pension systems and point to several important considerations for future research.

The paper found that:

Discount rates, salary growth rates, cost methods, and mortality tables all influence funding ratios and contribution requirements. Without considering these effects, comparisons of funding ratios across pension systems will produce biased results.

The discount rate assumption is the most influential actuarial input on funding ratios and contribution requirements. We show that a plan can postpone required contributions by raising its discount rate assumption, but its funding condition deteriorates in the long run. In contrast, if a plan reduces its discount rate by one percentage point, and its investment returns continue at the level that was previously assumed, it will take approximately seven years for the funding ratio to return to its original level and an even longer time period for the ARC to return to its original level (though the exact length of time depends on investment returns and the baseline discount rate assumption).

The effects of actuarial inputs greatly depend on plan characteristics such as demographic profiles and asset levels, and also interactions with other actuarial inputs. Because of the interactive effects, it is difficult to standardize funding ratios or pension obligations by only controlling for a single actuarial input. With better data on plan characteristics (such as information on mortality tables and age distributions), simulations could be used to standardize pension liabilities. In the absence of that information, improved consistency in financial reporting (such as requiring a single cost method) is an effective way to facilitate better comparisons of financial conditions across pension plans.

The policy implications of the findings are:

The valuation (or measurement) of public pension liabilities and contribution requirements is highly sensitive to the choice of several actuarial assumptions, which should be considered when assessing the financial condition of public pension systems.

The sensitivity of liability and contribution requirement valuations to actuarial assumptions and methods depends on the demographic profile of pension participants.

Making more optimistic assumptions reduces the liability and contribution valuations in the short term, but, over time, more optimistic assumptions can have substantive and harmful effects on pension liabilities and contribution requirements.
full paper

http://crr.bc.edu/wp-content/uploads.../wp_2017-4.pdf
__________________
It's STUMP

LinkedIn Profile
Reply With Quote
  #754  
Old 05-24-2017, 04:43 PM
campbell's Avatar
campbell campbell is offline
Mary Pat Campbell
SOA AAA
 
Join Date: Nov 2003
Location: NY
Studying for duolingo and coursera
Favorite beer: Murphy's Irish Stout
Posts: 83,266
Blog Entries: 6
Default

MICHIGAN
http://www.detroitnews.com/story/new...orm/102056638/

Quote:

Michigan GOP lawmakers unveil pension reform plans

Lansing – State House and Senate Republicans on Tuesday unveiled their plan to close Michigan’s teacher pension system to new hires and move them into 401(k)-style plans despite an impasse with GOP Gov. Rick Snyder that has already strained annual budget negotiations.

Frustrated legislative leaders suspended budget talks with Snyder last week after the governor continued to voice concerns over transition costs associated with the pension reform plan, which could be significant.

Snyder met earlier Tuesday with Senate Majority Leader Arlan Meekhof and House Speaker Tom Leonard. There was “no progress but a polite discussion,” according to a Senate Republican spokeswoman.

.....
Identical bills introduced in the state House and Senate would close the state’s current “hybrid” pension system to new hires on Sept. 30 and set a new schedule for attempting to pay down $29.1 billion in unfunded liabilities or debts that have accrued in an older traditional pension plan.

New teachers and staff in participating K-12 schools, community colleges and universities would be enrolled in privately managed investment funds and would qualify for employer matches of up to 7 percent, similar to current 401(k)-style plans for all state employees.

“There is an opportunity here to change the course of Michigan, to stop digging the hole and to give a responsible retirement system to the teachers,” Meekhof said.

In addition to 401(k)-style retirement plans, the legislation would allow teachers and school staff to select annuity options offered by insurers that would provide set retirement payments based on deposits and investments.

The legislation makes clear that pension benefits for current retirees and active plan members are constitutionally guaranteed. They are a “contractual obligation of this state that shall not be diminished or impaired,” according to the bill.

http://www.freep.com/story/news/poli...1-k/339290001/

Quote:
GOP lawmakers forging ahead with teacher pension reform without consensus from Gov. Snyder

LANSING — Lawmakers in the House and Senate forged ahead today with a plan to cut new teachers out of pensions and switch them to a 401(k)-type plan, despite a lack of progress between the Republican leadership in the Legislature and Gov. Rick Snyder on how to reform Michigan's teacher pension system.

Rep. Thomas Albert, R-Lowell and Sen. Phil Pavlov, R-St. Clair, introduced bills that would close off the Michigan Public Schools Employee Retirement System – or MPSERS – to new teachers, beginning on Sept. 30 and put them into a defined contribution plan in which the state would contribute 4% of a teacher’s wages toward the retirement fund.

The employee could then contribute up to another 3%, which would be matched by the employer — for a total of up to 10% each year. The employer match would be covered by the state. Teachers currently in the MPSERS system would continue to get their pension benefits.
......
The state adopted a hybrid system for new teachers five years ago that combines a traditional pension plan with a tax-deferred investment account or teachers can pick an option that is just like a 401(k). Most new employees choose the hybrid plan, said Doug Pratt, spokesman for the Michigan Education Association. And it is fully funded with no debt.

But Albert called the hybrid system “A Band-Aid for a bullet wound.”

“Big problems require big solutions,” Albert said. “We can help the next generation of teachers and students by being responsible now and laying the financial groundwork for them to be successful. We need to stop passing this debt along to our kids.”

Pavlov said the bills would allow new teachers to have more control over their retirements.



https://www.usnews.com/news/best-sta...-provide-401-k

Quote:
Republican Bills Close Pension to New Hires, Provide 401(k)
Republicans who control the Michigan Legislature have introduced long-expected legislation to close the school employees' pension system to new hires and provide them a 401(k) only.

.....
"We're going to convince him that the math works," said Senate Majority Arlan Meekhof, who along with House Speaker Tom Leonard has halted high-level budget talks with the Snyder administration while pushing the retirement switch they hope to move in concert with a spending plan that typically is enacted in June. "If we don't stop digging the hole, it just gets bigger and bigger and bigger."

Conservatives noted that while Snyder and legislators previously moved to address some of the debt, the teacher's pension unfunded liability grew by more than $11 billion to $29 billion from 2010 to 2016.

Democrats and labor unions criticized the legislation. And liberal activists who had traveled to the Capitol for a lobbying day held an impromptu, lively rally outside Meekhof's office to protest the new bills.

Sen. David Knezek, D-Dearborn Heights, said "anybody with a sound mind" would reject the proposal after examining financial implications that could total billions of dollars initially.

"It's easy for someone to talk about balancing a spreadsheet," he said. "But ... what impact is this going to have on the lives of everyday people?"

Steven Cook, president of the Michigan Education Association, the state's largest teachers' union, cited teacher shortages and said "continuing to attack livelihood and retirement security" of school employees would only encourage more educators to leave the profession.

"If there is additional (school aid fund) dollars available, they should be added to the per-pupil payments to school districts, not poured into the latest Lansing ideological shell game," he said.

__________________
It's STUMP

LinkedIn Profile
Reply With Quote
  #755  
Old 05-24-2017, 04:44 PM
campbell's Avatar
campbell campbell is offline
Mary Pat Campbell
SOA AAA
 
Join Date: Nov 2003
Location: NY
Studying for duolingo and coursera
Favorite beer: Murphy's Irish Stout
Posts: 83,266
Blog Entries: 6
Default

ILLINOIS

http://www.chicagomag.com/city-life/...ension-Reform/

Quote:
Will Illinois Ever Solve Its Pension Problem?
Almost four years after the first try, pension reforms seems politically realistic—and perhaps legally as well.

One of the Rauner administration’s most prominent and controversial demands is to find a way to reduce how much the state spends on its retired employees. For political and ideological reasons, Illinois Democrats are supported by labor, and support it in turn, so pension reform is not popular among the Democratic base.

Yet pension reform has had plenty of momentum, even pre-dating the Rauner administration. The reason, at its most basic, is that Illinois’s pension obligations are currently too huge to feasibly pay without untenable tax hikes, service cuts, or both.

If anything, the most concerted and successful attempt at pension reform was too aggressive—if not politically, than legally, which is why it (rather predictably) was ruled unconstitutional by the Illinois Supreme Court.

That bill, passed in 2013 by a Democratic House and Senate and signed by a Democratic governor, would have cut cost-of-living increases for retirees. It was expected to save $160 billion over 30 years. At the time, ABC7 did a good breakdown of what reducing cost-of-living adjustments would have done to retiree pensions. For example, a Department of Children and Family Services caseworker with 20 years of experience who started at $50,000 in retirement, could receive up to $90,000 after 20 years of retirement. The bill would have reduced the latter number to $63,000, for a total cut over those 20 years of over $260,000.

But Illinois has arguably the strongest protections against altering retiree pensions in America, a legal reality that dates back nearly 50 years to the constitutional convention of 1970. Even back then, the framers of the new state constitution knew how tightly the state would be bound to its pension agreements.

And because it was understood then, it was pretty well understood in 2013. Senate President John Cullerton’s then-chief legal counsel, Eric Madiar, warned in a thorough analysis that unilaterally cutting benefits wouldn’t fly. So Cullerton proposed a different plan wherein retirees could choose between their cost-of-living increases and subsidized health care. (The legal theory was that by offering a choice—as crappy as it was—rather than simply cutting benefits, the choice that the retiree makes is a new contractual agreement, and therefore constitutionally acceptable.)

It still seemed like a moon shot, as I described it at the time. Either way, the unilateral approach won the day, and one and a half years later, lost in the Supreme Court. It didn’t help that the decision coincided with the income tax increase—the court pointed out that the state, far from having its hands tied in terms of pension costs, managed to raise taxes in order to start digging out of its hole.

Cullerton’s plan kept floating around; his latest pension reform effort is a revised version. Doug Finke of the SJ-R has a good explainer here; in short, an employee would have a choice between:

taking a three percent cost-of-living adjustment, but not be able to count raises toward his or her final pension, or
taking smaller cost-of-living increase, but raises would be counted towards the pension.

The key is to this proposal is that raises aren’t guaranteed income, so the amount of the pension based on those raises isn’t (theoretically) constitutionally protected. And by offering employees a choice between the two options, whatever pension they get is the result of a contractual agreement.

But, of course, it would save much less money than the SB1 bill that passed in 2013 ($700 million to $1 billion a year rather than $160 billion over thirty years). As with anything that would cut pension payments, there’s no guarantee that it would pass muster with the Supreme Court, though the latest approach seems to be the most realistic one thus far. And as Finke just reported, Cullerton’s newest approach was wrapped up into a bipartisan bill that just passed out of a House committee on May 16.

__________________
It's STUMP

LinkedIn Profile
Reply With Quote
  #756  
Old 05-24-2017, 04:46 PM
campbell's Avatar
campbell campbell is offline
Mary Pat Campbell
SOA AAA
 
Join Date: Nov 2003
Location: NY
Studying for duolingo and coursera
Favorite beer: Murphy's Irish Stout
Posts: 83,266
Blog Entries: 6
Default

ILLINOIS

http://www.chicagobusiness.com/artic...misconceptions

Quote:
Here's what you probably don't know about Illinois pensions
Comments Email Print
By: JARED RUTECKI
BETTER GOVERNMENT ASSOCIATION

SHARE
Facebook123
Twitter
LinkedIn5
Google +0
John Hyun/Flickr
Photo by John Hyun/Flickr
Illinois' budget mess is the stepchild of Illinois' pension mess, and for that perhaps nothing incites more steam-coming-out-of-the-ears fury from critics than the volume of six figure annual retirement payouts—topped by one at $581,000—pledged to former public workers.


Yet a BGA analysis of 2017 data from major pension funds for state and municipal employees vividly illustrates the disconnect between high-rolling pensions, legally protected but irksome as they may be, and the deep financial plight experienced by many of those funds.


Simply put, the state's 17 largest pension funds are slated to pay out more than $17.3 billion in benefits to some 483,000 retirees and survivors this year, totals that underscore the broad reach of pension checks for former public employees. Those payments do not come direct from tax money, though there is indirect correlation that can render the public confused and budgetmakers dyspeptic.

Just four percent of all beneficiaries this year are in line for pension paydays exceeding $100,000, with the biggest checks largely going to once high-paid former school administrators and physicians at public teaching hospitals. Payments for the overwhelming majority of pensioners, most of whom don't qualify for Social Security, are far more modest.

The median pension in 2017 for retired suburban and Downstate teachers stands at $52,016, the analysis shows, while the median for general state workers is $28,946. For university workers, the median pension stands at $26,101, while for non-public safety municipal workers outside of Chicago it is $9,064.

The median represents the mid-point of all individual pensions paid out by a retirement system. It is different from an average, which can be skewed by those outsized, six-figure payouts.

.....
The analysis from the BGA, the latest in a series of annual pension updates dating to 2012, was made with data obtained through the Freedom of Information Act.

It examined pension records for funds covering public school teachers and university employees, state, Chicago, and Cook County employees, and tens of thousands of other public workers in the suburbs and Downstate. Excluded from the analysis were records from hundreds of smaller, municipally operated pension funds covering police and firefighters outside of Chicago.

The raw pension data for 2017 is now posted under the tools and data section of the BGA website.



Quote:

.....
In fiscal 2016 alone, the state obligation to TRS and the other four employee pension funds it maintained was $6.8 billion, an amount so large it consumed more than 26 percent of the day-to-day operations budget of Illinois government, according to Ralph Martire, executive director of the Center for Tax and Budget Accountability.

But Martire said only $1.6 billion of that amount, less than 24 percent, was needed to cover the so called normal cost of pensions, benefits actually earned by employees in 2016. The other $5.2 billion amounted to late payment charges.

"The real problem is a debt-service problem and a tax-policy problem," said Martire, whose Chicago-based think tank contends Illinois finances are being crippled by insufficient taxes.

The pension debt, combined with low tax revenue, has been a strong influence on Illinois receiving some of the lowest credit ratings among the states, a dubious distinction that drives up the cost of borrowing.

The idea of better funding was admirable, but the methodology was flawed, according to Martire. The state borrowed money against pension contributions to fund services, and buried taxpayers under a mountain of unfunded liabilities.

same piece is here:
http://www.bettergov.org/news/big-pe...g-pension-mess
__________________
It's STUMP

LinkedIn Profile

Last edited by campbell; 05-24-2017 at 05:05 PM..
Reply With Quote
  #757  
Old 05-24-2017, 04:49 PM
campbell's Avatar
campbell campbell is offline
Mary Pat Campbell
SOA AAA
 
Join Date: Nov 2003
Location: NY
Studying for duolingo and coursera
Favorite beer: Murphy's Irish Stout
Posts: 83,266
Blog Entries: 6
Default

KENTUCKY

http://www.bipps.org/news-release-bl...ension-report/

Quote:
News Release: Bluegrass Institute Pension Reform Team responds to PFM pension report

(FRANKFORT, Ky.) – The Bluegrass Institute Pension Reform Team (BIPRT) attended the Public Pension Oversight Board (PPOB) meeting on Monday to hear comments from PFM, the consultant evaluating the state’s retirement systems, regarding its latest report on the audit of Kentucky’s public benefits plans.
It is the belief of the BIPRT that the primary cause of Kentucky’s pension crisis is the benefit structure for employees and retirees. Specifically, retroactive benefit enhancements and unfunded benefits were granted to employees without the use of an actuarial analysis to determine the costs.
For this reason, we were disappointed to learn that PFM was asked to only analyze pension data back to 2005. This limited view of the data precluded PFM from incorporating the impact of large unfunded benefit enhancements granted to employees in the 1980s and 1990s, as we have well documented.
Sen. Jimmy Higdon, R- Lebanon, a member of the PPOB, correctly asked the actuarial representative from PFM about the work of the Bluegrass Institute and the absence of the impact of the benefit enhancements in their report. The response from PFM was that at least 20 years of data would have been needed to fully account for those costs.
If the commonwealth is going to enact real reform, we need to correctly identify the causes of our current dilemma. If we blame lack of portfolio performance, fees paid to external asset managers and lack of funding from Frankfort, we will be missing the true cause of the crisis.
We did find interesting the data presented by PFM comparing the benefits received by Kentucky teachers and public employees to comparable public and private sector employees in surrounding states. As one might expect, Kentucky employees receive, on average, much higher benefits.
The BIPRT is not against defined benefit retirement plans. If a defined benefit plan is to be implemented, however, certain rules must be followed. For decades, Kentucky broke these rules repeatedly leading to our crises today.
Download this detailed list of recommendations offered by the Bluegrass Institute to address this crisis and return our state to economic health and vitality.
list of recommendations: [warning: a powerpoint file...with animations! nooooo]
http://www.bipps.org/wp-content/uplo...5.18.17-4.pptx
__________________
It's STUMP

LinkedIn Profile
Reply With Quote
  #758  
Old 05-24-2017, 04:50 PM
campbell's Avatar
campbell campbell is offline
Mary Pat Campbell
SOA AAA
 
Join Date: Nov 2003
Location: NY
Studying for duolingo and coursera
Favorite beer: Murphy's Irish Stout
Posts: 83,266
Blog Entries: 6
Default

NEW YORK

http://www.nystateofpolitics.com/201...-year-at-192b/

Quote:
Pension Fund Closes Out Fiscal Year At $192B
The state pension fund closed out the 2016-17 state fiscal year valued at $192 billion with an estimated rate of return 11.42 percent, Comptroller Tom DiNapoli on Tuesday said.

“Strong returns over the fiscal year, particularly in the fourth quarter, were driven by rising public equity markets,” DiNapoli said. “New York state’s pension fund is at a record value based on prudent long term asset allocation. We continue to manage one of best funded, best performing pension plans in the nation and that’s great news for the more than one million men and women who participate in it, as well as for New York taxpayers.”

Private equity funds resulted in a 7 percent rate of return, while real estate returned 10.68 percent, DiNapoli’s office said.

New York’s pension fund is the third largest in the country which will provide retirement benefits to more than 1 million active state and local government workers.

DiNapoli’s office moved to reduce employer contribution rates in 2013-14 through 2015-16, with rates remaining stable in the current fiscal year that began April 1.

__________________
It's STUMP

LinkedIn Profile
Reply With Quote
  #759  
Old 05-26-2017, 02:05 PM
campbell's Avatar
campbell campbell is offline
Mary Pat Campbell
SOA AAA
 
Join Date: Nov 2003
Location: NY
Studying for duolingo and coursera
Favorite beer: Murphy's Irish Stout
Posts: 83,266
Blog Entries: 6
Default

NCPERS

http://www.ncpers.org/files/PR_2017%...20Research.pdf

Quote:
Dismantling Public Pensions Could Blow $3 Trillion Hole
In U.S. Personal Income over Next Decade, NCPERS Warns
Economic Growth Would Suffer if Pressure to Curb Pensions Continues Unchecked
Washington, D.C. -- A study by the National Conference on Public Employee Retirement
Systems (NCPERS) projects that the nation’s economy will suffer severe setbacks by the year
2025 if the dismantling of Defined Benefit (DB) public sector pensions continues at its current
pace.
Titled “Economic Loss: The Hidden Cost of Prevailing Pension Reforms,” the study cited the
following findings:
 By 2025, the study estimates $19 trillion in total personal income in the U. S.
would be reduced by $3.3 trillion.
 The study projects the 4% rate of national economic growth would be dragged
down to 3.29%.
 As states make changes that are negative for public pensions, their rate of
income inequality increases by an average of 15% over 10 years. That, in turn,
undermines the rate of economic growth by about 18%.
 Public pensions are in better shape than portrayed by their politically motivated
opponents.
 There are several strategies to adequately fund public pensions without
dismantling them, and some states are beginning to explore and implement
them.
 The study projects the economic damage that would occur in 2025 for each state
if the state stays on the path of dismantling pensions.

“The facts clearly demonstrate that the vast majority of professionally managed DB public
pension systems are adequately funded, are sustainable by implementing common-sense
policies, and benefit the economies of communities and states,” said Hank H. Kim, Esq.,
NCPERS’ executive director and counsel. “Our nation faces a growing retirement crisis that has
been exacerbated by the inability of defined contribution plans such as 401(k) plans to provide
a reliable income stream during retirement. DB public pensions, with their reliability and
superior cost management, should be a model for the private sector.”
The study, presented today by Director of Research Michael Kahn at NCPERS’ annual
conference in Hollywood, Fla., also includes a primer on how public pensions funding works.
“A great deal of criticism of public pensions is based on a faulty understanding of how longterm
liabilities are funded,” Kahn said. “Opponents of public pensions tend to whip up fear by
arguing that cities and states can’t cover their long-term pension liabilities with current
revenues. That’s like saying your 30-year mortgage is in trouble if you can’t pay it off from this
year’s salary.”
About NCPERS
The National Conference on Public Employee Retirement Systems (NCPERS) is the largest trade
association for public sector pension funds, representing more than 500 funds throughout the
United States and Canada. It is a unique non-profit network of public trustees, administrators,
public officials and investment professionals who collectively manage more than $3 trillion in
pension assets. Founded in 1941, NCPERS is the principal trade association working to promote
and protect pensions by focusing on advocacy, research, and education for the benefit of public
sector pension stakeholders.
Now do the damage of underfunding pensions! What loss comes from that?

The report:
http://www.ncpers.org/files/NCPERS_2...mic%20Loss.pdf

And I see they champion POBs to get underfunded pensions "fully-funded" (including some other bad ideas, like monetizing state assets, supposedly getting better results from putting everything in one big state pot, and "stabilization funds"). Let us know the economic loss of those, too.

John Bury's reaction:

https://burypensions.wordpress.com/2...udy-seriously/

Quote:
Hidden Cost of Taking NCPERS Study Seriously
Posted May 25, 2017 by burypensions in Public Pensions - General. 6 Comments
A study by the National Conference on Public Employee Retirement Systems (NCPERS) projects that the nation’s economy will suffer severe setbacks by the year 2025 if the dismantling of Defined Benefit (DB) public sector pensions continues at its current pace.


The study incorporates most of the dangerous bromides that have brainwashed unions and public employees into believing that an unregulated DB system is to the advantage of most of them.

.....
Kentucky may still be with us in five years but that does not mean they will be making full pension payments to their retirees. After all, Prichard, AL, Central Falls, RI, and Detroit, MI are still with us as is Puerto Rico. While on the state level we still have New Jersey but New Jersey retirees no longer have COLAs.
.....
Spending by taxpayers also stimulates local economies with that spending more likely not to be on hedge funds or in out-of-state retirement communities.
.....
What about investment decisions being made by politicians desperate enough to keep contributions down that they load these plan with alternative investments whose values can be easily inflated? No bubble worries?
......
Is it that public pensions invest in completely different asset classes or that those overseeing public plans invest with only the thought of what the current contribution would be since there is no need to think long-term when the plan sponsor is “here to stay”?
__________________
It's STUMP

LinkedIn Profile
Reply With Quote
  #760  
Old 05-26-2017, 02:12 PM
campbell's Avatar
campbell campbell is offline
Mary Pat Campbell
SOA AAA
 
Join Date: Nov 2003
Location: NY
Studying for duolingo and coursera
Favorite beer: Murphy's Irish Stout
Posts: 83,266
Blog Entries: 6
Default

CALPERS
CALIFORNIA
INVESTMENT FEES

https://www.forbes.com/sites/edwards.../#2c2b2eee2c2b

Quote:
How To Steal A Lot of Money From CalPERS, The Nation's Largest Public Pension

How hard would it be to steal millions from CalPERS, the nation’s largest public pension with $320 billion in assets? Easy-peasy.

Yesterday the Wall Street Journal reported a disturbing fact—a fact well known to pension insiders for years. That is, officials at CalPERS do not know the full extent of the fees the pension’s private equity managers take out of the pension.

At a 2015 meeting, the chief operating investment officer openly acknowledged that no one knew the performance fees paid.

Let’s clarify what’s going on here. Presumably the mega-pension knows, or can readily establish, all the fees—asset-based and performance—it pays its money managers pursuant to fee invoices. (A breakdown of other operational fees—which can be significant—can either be gleaned from investment fund financial statements or specifically requested from managers.)

What CalPERS doesn’t know is the performance and other fees its managers take directly from the funds they manage for CalPERS without asking, disclosing or invoicing.

.....
So, to re-cap the problem facing CalPERS: Private equity managers are taking billions from the pension but the pension has no idea how much. How comforting is that to pension stakeholders? You'd think that California’s largest state employee union, SEIU Local 1000 and AFSCME would be concerned about protecting the retirement assets of their members that are participants in the state pension.

Of course, if CalPERS doesn’t know how much money these private equity managers are taking out of the pension, it cannot possibly know whether the amounts taken are legitimate or wrongful—i.e., theft.


.....
In 2014, SEC staff found that more than half of about 400 private-equity firms it examined had charged unjustified fees and expenses without notifying investors. To be sure, CalPERS conceivably could have adroitly avoided the hoards of private equity wrongdoers but, based upon my knowledge of longstanding CalPERS due diligence lapses and monitoring weaknesses, don’t count on it. As I wrote in 2011, CalPERS involvement in an investment scheme is no assurance of integrity, or a "Good Housekeeping Seal of Approval."

....
How long has CalPERS known about potential theft by its managers? At least four years.

On March 22, 2013, I sent a letter to the CalPERS board reciting my credentials (for those board members who did not already know me) and emphatically stating, “It is apparent to me, even from a distance that the fund continues to lack many of the safeguards I would recommend to improve management and performance.” I received no response to the letter.

A few months later, on May 13, 2013, I sent a second letter to board member Jelencic, as requested, providing further detail regarding issues which in my expert opinion should be investigated fully by the pension. Included in these issues were specifically “undisclosed fees related to investment providers/vendors,” and “private equity and hedge fund conflicts of interest, fee abuses and malfeasance.”

I am told that when Mr. Jelencic brought my second letter to the attention of the board at a closed meeting, the Board President responded, “How is this letter different from any of the thousands of others we receive? The suggestion to meet with me was rejected, I am told by Jelencic. CalPERS today stated, "We cannot comment on issues that are discussed in closed session." (Please see update at the bottom of this article.)


If it’s true that the CalPERS board regularly receives thousands of letters from forensic experts and other credible whistleblowers alleging potential wrongdoing regarding pension investments—allegations of wrongdoing which the board routinely ignores—that’s really scary. Unions protecting government workers should be alarmed that such warnings go unheeded and demand to see all such correspondence.

My advice to would-be criminals: If you want to steal millions, escape detection and prosecution, then set your sights on the mother of all pension honey-pots, CalPERS.

__________________
It's STUMP

LinkedIn Profile
Reply With Quote
Reply

Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off


All times are GMT -4. The time now is 12:29 PM.


Powered by vBulletin®
Copyright ©2000 - 2018, Jelsoft Enterprises Ltd.
*PLEASE NOTE: Posts are not checked for accuracy, and do not
represent the views of the Actuarial Outpost or its sponsors.
Page generated in 0.92779 seconds with 9 queries