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  #21  
Old 01-25-2012, 03:13 PM
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http://burypensions.wordpress.com/20...-63011-update/

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The June 30, 2011 valuation reports are out.
You might be seeing numbers tossed at you regarding deficits in the state pension of $40 billion and a funded ratio of 67%. They’re way off. Based on actuarial reports for the three largest plans I put the real deficit now at $162 billion and the real current funded ratio at 30%. Let’s take this in stages as we replace official figures with real-world ones for the three largest plans.
OFFICIAL NUMBERS @ 6/30/11 (in billions)
……………………………TPAF………..PERS……..PFRS……………TOTAL
Actuarial Assets………32.2…………29.1………23.2……………..84.5
Liabilities……………….49.9…………43.3……….30.9…………..124.1
Deficit………………….-17.7…………-14.2……….-7.7……………-39.6
Funded Ratio………..64.5%………67.2%…….75.1%………….68.1%

The funds did not really have $84.5 billion in assets at June 30, 2011. The ‘actuarial value’ in this case means an average of the the asset values over the last five years which in the private sector is used to ‘smooth’ valuations but in the public sector is used to distort. Just because the plan held Lehman stock that was worth something in three of the last five years they get to pretend they really have more money now.

.....
Now remember these numbers were as of June 30, 2011. The latest report from the Division of Investments shows assets at $69.6 billion and we can add another year of accruals to the liability side:

BURY/COLA WITH MARKET VALUE @ NOW (in billions)
……………………………TPAF………..PERS……..PFRS……………TOTAL
Market Assets…………25.6…………24.0………20.0……………..69.6
Bury/COLA Liab………95.0…………79.0……….58.0…………..232.0
Deficit………………….-69.4…………-55.0……. -38.0…………..-162.4
Funded Ratio………..26.9%………30.4%…….34.5%………….30.0%

For the year ended June 30, 2011 there was about $7.6 billion paid out in benefits from these three funds. With early retirement incentives, the return of cost-of-living adjustments, longer life expectancies, and baby-boomer retirements this payout number should exceed $10 billion in three years by which time the fund will be depleted (after returning the interest-adjusted contributions made by employees) unless, of course, New Jersey politicians step up and do the honorable thing. There’s a debate as to whether you can put a number on that happening.
You can go to the link to check out each of the adjustments he makes.
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  #22  
Old 01-25-2012, 04:34 PM
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John Bury does some good work here.
But the actuarial valuation ginned up by 50% is just witchcraft.
What do the actuaries state for liabilities and the range of possible results with different investment scenarios? Is there any published information from the state's paid actuarial talent, one that shows the liabilities on a market basis?
Nonetheless, I like his posting on the issues of market assets or the potential liability if the courts give back the cola. Keep it up.
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Old 01-25-2012, 04:41 PM
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Quote:
Originally Posted by Duffer View Post
John Bury does some good work here.
But the actuarial valuation ginned up by 50% is just witchcraft.
What do the actuaries state for liabilities and the range of possible results with different investment scenarios? Is there any published information from the state's paid actuarial talent, one that shows the liabilities on a market basis?
Nonetheless, I like his posting on the issues of market assets or the potential liability if the courts give back the cola. Keep it up.
As I say, people can go to his post as he walks it through, step-by-step.

If you don't like the dickering with the liabilities, at the very least the adjustment of asset values makes sense.
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Old 01-25-2012, 04:43 PM
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Quote:
Originally Posted by Duffer View Post
But the actuarial valuation ginned up by 50% is just witchcraft.
Witchcraft is putting it nicely.
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Old 01-25-2012, 04:51 PM
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Witchcraft is putting it nicely.
Yes indeed, witchcraft.

And then John Bury does his best to unwitch it.
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Old 01-25-2012, 04:54 PM
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What ever happened to the voodoo? Did we run out of voodoo?

Need more? and some hoodoo too too?

An order of mojo on the side?

http://www.13moons.com/index.php?mai...ndex&cPath=370
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Old 01-25-2012, 04:55 PM
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Quote:
Originally Posted by Wag, the Dog View Post
What ever happened to the voodoo? Did we run out of voodoo?

Need more? and some hoodoo too too?

An order of mojo on the side?

http://www.13moons.com/index.php?mai...ndex&cPath=370
I think somebody got some actuarial disciplining for mentioning the voodoo.

So =shhhhhhh= don't want to get this thread deleted.
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Old 01-25-2012, 04:58 PM
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Although there is no link on that page to public plan actuarial reports, there is a link to:

http://www.13moons.com/index.php?mai...a12c36f4989893

which provides statuary, an obvious contraction of state actuary.
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Old 01-25-2012, 04:59 PM
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Quote:
Originally Posted by Lane Meyers View Post
Witchcraft is putting it nicely.
And likely understating it.


37% would be the change attributable to the MV factor alone. For example, GAR94, NRA 62, the life annuity factor is 13.3 at 4.5% and 9.7 at 8.25%.

Add on the effect of pre-retirement interest; J&S annuities; mortality for a population with lifetime health benefits; opportunities for gaming the system (buying service credits, ERIs) and a case could be made for doubling the liability. But, being conservative.....
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Old 01-25-2012, 05:25 PM
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Originally Posted by jbken View Post
And likely understating it.


37% would be the change attributable to the MV factor alone. For example, GAR94, NRA 62, the life annuity factor is 13.3 at 4.5% and 9.7 at 8.25%.

Add on the effect of pre-retirement interest; J&S annuities; mortality for a population with lifetime health benefits; opportunities for gaming the system (buying service credits, ERIs) and a case could be made for doubling the liability. But, being conservative.....
4.5% is more than conservative. It's nonsense.
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