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  #851  
Old 10-04-2013, 01:33 PM
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RUSSIA

http://stream.wsj.com/story/latest-h...9/SS-2-345239/

Quote:
MOSCOW–Russia’s government is temporarily seizing $7.6 billion in savings from non-state pension funds while it carries out inspections, a move critics say looks like a “confiscation” aimed at plugging a hole in next year’s state budget.

Prime Minister Dmitry Medvedev told ministers Thursday that the government needs to check that the money Russians channel to private pension funds is safe. To do this, it will seize 244 billion rubles ($7.6 billion) from non-state pension funds and put them into the state pension fund.

Pension funds hold more than $100 billion in assets. Nearly half of that is mandatory savings managed by state-run bank VEB. Non-state pension funds and funds affiliated with state-controlled companies hold the rest.

Government officials say they’ll just hold the money on the state pension fund’s books for a year while the checks are carried out. But analysts say they suspect the government will be tempted to use the money to plug shortfalls in the pension system, instead of channeling funds from the state budget, as it has previously.
Stealing from private pensions to give to public pensions -- that's a winning idea.
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  #852  
Old 10-04-2013, 05:23 PM
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BELL, CALIFORNIA

not exactly a directly pensions story, but we've covered this guy starting back in 2010:
http://www.actuarialoutpost.com/actu...zo#post4576363

http://www.actuarialoutpost.com/actu...zo#post4578753


A little bit of closure here:
http://touch.latimes.com/#section/-1.../p2p-77650604/

Quote:
In January of 2011, the attorney representing Robert Rizzo told me his client would beat the 69 public corruption charges against him. Citizens had a right to be ticked off about the Bell administrator's staggering $800,000 a year in compensation, lawyer Jim Spertus said, but no crimes had been committed.

Now Spertus is singing a different tune, and apparently, Rizzo will be doing his own singing, soon.

"Mr. Rizzo wants to make amends to the citizens of Bell for engaging in wrongdoing," Spertus said in explaining Rizzo's surprise "no contest" plea today, a week before scheduled jury selection, "and we've been able to negotiate a fair and just outcome that will hopefully establish that Ms. Spaccia was the mastermind behind all the greed that led to the charges."

Spertus was talking about Rizzo's deputy, Angela Spaccia, who's got her own corruption trial pending.

That's beautiful, isn't it? An attempt to spin Rizzo as a poor sap who now finally admits his grotesque ripoff of Bell citizens, but claims he was sucked into it by Spaccia. Can we expect him to testify against her now, or will Spaccia cut her own deal?

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  #853  
Old 10-05-2013, 03:13 PM
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followup on the Rolling Stone story

http://www.rollingstone.com/politics...s-too-20131004

Quote:
More recently, I've written many times about the failure of Democratic Party politicians like Barack Obama to do anything about the outrageous carried interest tax break, under which hedge fund billionaires like the ones manning the board of the Manhattan Institute and making millions managing the pensions of states like Rhode Island pay a maximum personal tax rate of 15 percent.

In fact, not only have Democrats not done anything about that outrage, there have been many prominent ones – like for instance Cory Booker and Bill Clinton, two politicians who both benefitted from finance-sector largesse in their respective careers – who stood up and defiantly took bullets for the industry when Obama offered highly muted criticisms of Mitt Romney's finance-sector past last summer.

In a way, I should probably thank Henn, because had he not written his piece, I wouldn't have remembered this key point. Not only are states like Rhode Island paying millions in fees to outrageously expensive money managers, but those millions will be taxed at a rate far below what the teachers and police and sanitation workers who are being forced to swallow cuts in those states pay on their dwindling incomes. This is thanks in large part to a tax loophole preserved for years by cowardly Wall Street-supplicating politicians hailing, as Henn correctly notes, from both parties, Republican and Democrat.

There's another section of Henn's piece that coincides with another industry-friendly online criticism of the Rolling Stone piece, an article written by Andrew Biggs for the American Enterprise Institute. I've actually also seen the following argument in a few letters sent to me from pro-industry types in just the last few days, so it feels like a collectively-agreed-upon talking point of very recent vintage. And it's really, really weird stuff.

Both writers essentially say that the central thesis of the RS piece – that hedge funds are pushing reform because it's in their own financial self-interest – is "illogical" or a "non-sequitur," despite the undeniable fact of the hundreds of millions in fees paid out to money managers who have gone to great lengths to keep the details of their compensation secret.

.....
Biggs leaves out the fact that pension-reform advocates are not trying to "stop" pensions, they're mainly trying to convert them from a defined-benefit model to a defined-contribution model. The gravy train they're trying to "stop" is for workers, not money managers, who will actually earn more under reform, as states move more toward alternative investments. In no way is the financial services sector campaigning for an end to its pension gravy train. This is a pretty big thing to forget in this particular argument. It's actually the whole argument, isn't it? Readers, if I'm missing something, please let me know.



So Taibbi doesn't dispute that a big pot of money is invitation to corruption, but that public workers should get a cut of that take.

Fair enough.
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  #854  
Old 10-06-2013, 10:08 AM
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WASHINGTON

http://www.seattlepi.com/news/articl...ng-4870148.php

Quote:
Wash. identifies 4th case of pension spiking

SEATTLE (AP) — Washington's retirement system has confirmed another case of pension spiking, and officials said Friday they are now seeking to collect or save more than $125,000 by recalculating benefits.

In the latest conclusion, auditors at the Department of Retirement Systems determined that former Quincy Police Chief Bill Gonzales received a late pay raise and other benefits that were improperly counted toward his pension value. The state is seeking $5,506 from Gonzales to compensate for the overpayments, and officials project that they will save some $123,826 in the coming years due to reduced benefits.

Gonzales' case was spotlighted earlier this year as part of an Associated Press series about a pension system for law enforcement and firefighters.

Along with the Gonzales money, state officials have previously identified about $160,000 in past overpayments and future benefit reductions from three other pension-spiking cases in Lakewood. The state is also seeking more than $500,000 from the City of DuPont related to how it hired workers highlighted by AP.

....
Dave Nelsen, the legal and legislative services manager at the Washington state Department of Retirement Systems, said that raise was clearly a retirement incentive and should not be counted toward pensions under state rules. He also said the city was improperly counting money that was paid in lieu of medical benefits, but he doesn't believe anyone was trying to take advantage of the system.

"There's no sense of any sort of intent to hide things or misrepresent or mischaracterize," Nelsen said.

.....
Gonzales will still have an annual pension exceeding $46,000. It was previously about $56,000.

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  #855  
Old 10-06-2013, 10:29 AM
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great news everybody - this is really a false crisis.

http://www.salon.com/2013/09/26/expo...rker_pensions/

Quote:
Exposed: Enron billionaire’s diabolical plot to loot worker pensions
How an Enron billionaire, Wall Street and a major "nonpartisan" foundation are quietly robbing American workers

.....
Pew’s analysis, though eye-opening, was not particularly controversial. Writing in the Wall Street Journal, conservative Martin Morse Wooster acknowledges that the Pew Trusts are “treated as benign truth-tellers, so high-minded as to be beyond politics” – and the call to shore up Americans’ retirement security, indeed, upheld the organization’s promise 
to “generate objective data.” Based on indisputable evidence, it proved that the country’s move away from guaranteed pension income – and states’ willingness to raid worker pension plans to finance massive corporate subsidies – will have disastrous consequences.


What was surprising was the fact that at the same time one branch of Pew was rightly sounding this moderate non-ideological alarm to shore up retirement security, and Pew’s Economic Development Tax Incentives Project was warning of states’ wasteful tax subsidies, a more political branch of the organization was working in tandem with controversial Enron billionaire John Arnold to begin championing an ideologically driven plan to make the retirement problem far worse.

I know, right? It's not like there are any leftwing orgs that do this at all. All branches of their efforts align.

Quote:
But as outrageous as the blame-the-pensioners mythology from Detroit is, it is the same misleading mythology that is now driving public policy in states across America.

In Rhode Island, the state government slashed guaranteed pension benefits while handing $75 million to a retired professional baseball player for his failed video game scheme.

In Kentucky, the state government slashed pension benefits while continuing to spend $1.4 billion on tax expenditures.

In Kansas, the state government slashed guaranteed pension benefits despite being lambasted by a watchdog group for its penchant for spending huge money on corporate welfare “megadeals.”

In each of these states and many others now debating pension “reform,” Pew and Arnold have colluded to shape a narrative that suggests cutting public pension benefits is the only viable path forward. This, despite the fact that a) cutting wasteful corporate welfare could raise enough revenues to prevent such cuts; b) the pension “reform” proposals from Pew and Arnold could end up costing more than simply shoring up the existing system; and c) pension expenditures are typically more reliable methods of economic stimulus than corporate welfare.
.....
The result is a skewed national conversation about state budgets – one in which middle-class public sector workers are increasingly asked to assume all the financial sacrifice for balancing the government books, and corporations and the wealthy are exempted from any sacrifice whatsoever.

.....
The bait-and-switch at work is simple: The plot forwards the illusion that state budget problems are driven by pension benefits rather than by the far more expensive and wasteful corporate subsidies that states have been doling out for years. That ends up 1) focusing state budget debates on benefit-slashing proposals, and therefore 2) downplaying proposals that would raise revenue to shore up existing retirement systems. The result is that the Pew-Arnold initiative at once helps the right’s ideological crusade against traditional pensions and helps billionaires and the business lobby preserve corporations’ huge state tax subsidies.

I have no issue with cutting corporate tax subsidies. But I think you'll find that's not what's driving, say, Illinois's budget problems.
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  #856  
Old 10-07-2013, 02:24 AM
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Quote:
Originally Posted by campbell View Post
great news everybody - this is really a false crisis.

http://www.salon.com/2013/09/26/expo...rker_pensions/

I know, right? It's not like there are any leftwing orgs that do this at all. All branches of their efforts align.

I have no issue with cutting corporate tax subsidies. But I think you'll find that's not what's driving, say, Illinois's budget problems.
The left has no better arguments than this?

Actually, that's rhetorical, because, in reality, they really don't.
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  #857  
Old 10-07-2013, 06:50 AM
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I do hate =targeted= corporate tax breaks - the ones that give breaks to specific companies are odious, and while the ones that give breaks to specific industries are less objectionable (such as tax breaks for film production), it's still concerning.

If one is talking about corporate tax breaks that are for all businesses, I don't think that's an issue. You hike up the corporate tax rates too high, and the companies go somewhere else. Most companies are able to move if you give them enough incentive to do so.

But it's pretty much a non-sequitur. The tax deals (in Illinois, definitely) tend to be dwarfed by the pension shortfalls, even under 8% discount rates.

Pretending that just taxing more will fix the problem for severely underfunded plans doesn't make the pensions one whit stronger.

If reform to more modest benefits are not allowed (as well as taking away the incentive to have extremely risky portfolios), the public DB pensions will eventually be destroyed without evil corporations doing a single thing (oh, those eeeeevil corporations, whose stocks and bonds we have in our pension fund).

Which is why I think Illinois pensions are going to be the first huge pension disaster in the U.S. Because they're not going to do anything, and legal wrangling will prevent alteration to current pensions ... so that they'll have no choice but to fail catastrophically.
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  #858  
Old 10-07-2013, 10:25 AM
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Illinois legislators get paid.

http://www.nbcchicago.com/blogs/ward...225390202.html
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  #859  
Old 10-07-2013, 10:29 AM
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Poor Quinn. No stick to beat the legislators with.
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Old 10-07-2013, 11:41 AM
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PENNSYLVANIA

http://paindependent.com/2013/10/cor...-pension-debt/

Quote:
HARRISBURG — The Corbett administration is not too keen about the prospect of borrowing billions to help pay off Pennsylvania’s unfunded pension liability.

That borrowing would be a key part of a pension overhaul plan introduced this week by state Rep. Glen Grell, R-Cumberland. His proposal would allow the state to borrow up to $9 billion from the bond market to make an immediate dent in the $47 billion in unfunded pension liabilities owed to retirees, while also creating a new category of benefits for future hires to save money in the long-run.

But borrowing that much money would add about $500 million to Pennsylvania’s annual debt service costs, which already total more than $1 billion per year.

That’s enough to give the administration reservations about the idea.

“Everybody has the recognition that we have to do something sooner rather than later,” said Jay Pagni, Gov. Tom Corbett’s new press secretary. “But we have to address not only the short-term issues with the public pensions but putting together something that will be sustainable and will address the long-term issues of the unfunded liability.”

.....
“By issuing bonds at the current low rates and shoring up the pension systems now, the systems’ unfunded liability would be reduced by $15 billion over the next 30 years, with the Commonwealth taking responsibility for the debt service,” Grell said in a press release Monday.

He also predicted the borrowing would send a strong signal to the bond-rating agencies that Pennsylvania is serious about meeting its long-term obligations.

But at least one ratings agency has warned against using bonds to pay off pension debt.

“If pension bonds merely shifted an issuer’s long term obligations from one similar form to another, in this case from an unfunded pension liability to bonded debt, they would tend to have a neutral credit impact,” experts at Moody’s wrote in a report earlier this year. “However, issuance of pension bonds changes the nature of the liability and typically creates additional risks.”

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