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  #1291  
Old Yesterday, 06:52 PM
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Mary Pat Campbell
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NEW MEXICO
INVESTMENTS
PAY-FOR-PLAY

Spoiler:

http://www.santafenewmexican.com/new...b0ae71aab.html
Quote:
Report: Investment deals may violate state’s pay-to-play rules
Nearly a decade after Gov. Bill Richardson’s administration was tarnished by a scandal involving state investments, an online magazine has blasted current Gov. Susana Martinez over more than $1 million in political contributions by firms that were awarded hundreds of millions of dollars in investments by the state of New Mexico.

The story, published Wednesday by the New York-based International Business Times, says people associated with eight firms that handled $757 million in state investments contributed more than $1.2 million to Martinez, her political action committees and national Republican organizations that have supported her.

And one company that since 2001 has been awarded $200,000 by the State Investment Council once hired a polling firm co-owned by the wife of Martinez’s political consultant, Jay McCleskey.

A Martinez spokesman on Wednesday called the article “a shameless attempt to generate clicks online with a story that is short on facts and long on innuendo.”

While it’s not clear whether any of the money dealings described in the story were illegal, the article prompted state Rep. Bill McCamley, D-Las Cruces, to ask state Attorney General Hector Balderas to investigate any possible violations of state law.

“When it comes to campaign cash from managers of state investments, Martinez turned a blind eye to the ethical standards she championed,” says the article, written by David Sirota and Josh Keefe of International Business Times and Andrew Perez of Maplight, a California-based nonprofit that tracks the influence of money in politics. “During her tenure, New Mexico has been giving lucrative investment deals to financial firms whose executives have delivered big campaign donations to Martinez and to groups that have supported her election campaigns — a situation that may have violated the very pay-to-play rules that were passed in the wake of New Mexico’s previous scandals.”

The bulk of the investments discussed in the article were made by the state Educational Retirement Board, which oversees the $12 billion pension fund for teachers and other school employees in the state. Martinez does not sit on that board and appoints only two of its six members.
….
The firms named in the article that were awarded investments by the Educational Retirement Board include:

Crow Holdings, a Dallas real estate investment firm that received a $50 million investment from the board months after its founder, Harlan Crow, contributed $50,000 to the Republican Governors Association. In late 2013, the company gave another $100,000 to the governors group. The next year, the Educational Retirement Board awarded the firm another $35 million investment. The Crow company gave the Republican group another $100,000 in 2015 and was awarded another $30 million investment.

Apollo Global Management, which received a $50 million investment from the board in 2013. Apollo executive Josh Harris gave the Republican Governors Association $25,000 in 2010 then $25,000 in 2012 while Martinez was on the organization’s executive committee.

Prudential was awarded a $50 million investment from the retirement board in 2011 and another $35 million in 2014. Since Martinez has been governor, Prudential has given $200,000 to the Republican Governors Association and another $50,000 to the Republican State Leadership Committee, a Washington, D.C.-based group that raises money for Republicans running for state offices. The group has given more than $1.7 million to Martinez-related PACs since 2012.

Bain Capital, founded by 2012 Republican presidential nominee Mitt Romney, received $40 million from the teachers’ pension in 2014 and another $50 million in July. Less than three weeks after the board approved the 2014 investment, Bain’s founding partner, Robert White, gave $50,000 to the Republican Governors Association, which later that year would buy television commercials for Martinez’s re-election.

EnerVest, which received a $37.5 million investment from the board in 2015. Before this investment, its chief executive officer, John Walker, according to the article, “steered more than $61,000 to Martinez-linked groups.”

BP Capital, an energy investment firm half-owned by Texas financier T. Boone Pickens, got a $30 million investment from the board in 2013. Pickens gave the Martinez campaign $10,400.
https://maplight.org/story/new-mexic...to-play-rules/
Quote:
New Mexico Politicians Call For SEC Enforcement Of Pay-To-Play Rules
This story is a collaboration between David Sirota and Josh Keefe of the International Business Times and Andrew Perez of MapLight.

Sen. Tom Udall, a New Mexico Democrat, called for federal regulators to begin applying an anti-corruption rule to outside political groups in the wake of an International Business Times/MapLight investigation revealing hundreds of millions of investment dollars flowed to firms whose executives donated to organizations supporting Republican Gov. Susana Martinez.

A 2010 Securities and Exchange Commission rule, implemented in the wake of previous New Mexico pay-to-play scandals, was designed to deter financial firms from donating to public officials who influence state investment decisions. The rule included provisions designed to prevent firms from circumventing the rule by routing campaign cash through third parties. IBT/MapLight, however, identified $757 million in state pension dollars invested with eight companies linked to donors who delivered a total of $1.2 million to Martinez and affiliated political committees.

“We have to make sure that the campaign finance rules that are still on the books are updated to reflect these new and dangerous circumstances -- to ensure that no one is able to circumvent these laws by using super PACs, dark money groups, or other campaign spending vehicles,” Udall told IBT/MapLight on Thursday. “The public deserves to feel confident that decisions made with public money are not being influenced by big money donors.”
…..
Donors connected to firms that manage money for New Mexico state investment funds have delivered $1.1 million to the RGA since 2010, according to federal campaign finance records reviewed by IBT/MapLight. Martinez was elected to the RGA’s leadership committee immediately after winning election in 2010. She was the organization’s chair from 2015 to 2016. The RGA, which spent $2.5 million supporting Martinez’s two gubernatorial bids, was her largest single political donor.

Meanwhile, a Republican member of the State Investment Council -- which oversees a $21 billion endowment funded by taxes, leases, and royalties from oil and gas production that supplements the state’s budget -- agreed with Udall, and worried that campaign donations could be influencing the council’s investment decisions.

“I would be very much in favor of super PACs and groups like the RGA being covered by those same rules so we don't have pay-to-play, or the appearance of pay-to-play,” said New Mexico Land Commissioner Aubrey Dunn.

Dunn is running for a congressional seat currently held by Rep. Steve Pearce, who is running for the 2018 GOP gubernatorial nomination.

Dunn has clashed with his fellow Republican Martinez over proposed ethics rules backed by the governor, who chairs the investment council. The council barred Dunn and Democratic State Treasurer Tim Eichenberg from participating in closed-door meetings because of their refusal to sign an updated ethics code. The two officials said the confidentiality rules in the code would have made the panel less transparent to the public.

“I’m extremely concerned,” Dunn told IBT/MapLight. “We’re doing these complex investments when really we could be doing an index fund or something else with equal or better returns. I think we’re taking on extreme risk and not getting the return for that risk. I am concerned that pay-to-play may be involved in those kinds of investments.”

Meanwhile, Rep. Bill McCamley, D-Las Cruces, called on New Mexico Attorney General Hector Balderas Jr. to investigate whether state or federal pay-to-play rules had been broken.

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  #1292  
Old Yesterday, 06:53 PM
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Mary Pat Campbell
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PENNSYLVANIA

FEES
Spoiler:

http://www.cpbj.com/article/20170919...es-other-costs

Quote:
State pension weighs cuts to investment fees, other costs
Board members of the Pennsylvania State Employees' Retirement System hope to consider a plan to reduce investment fees before year's end.

The board directed its staff to work alongside investment consulting firm RVK to study how best to cut costs over a three-year period and come up with ideas for the board's consideration later this year.

Board members also ordered two other studies during their monthly meeting last week: one to look into ways SERS could cut costs by consolidating certain operations with the Public School Employees' Retirement System, resulting in a plan for the board to consider in the next six months; and one to find ways to increase participation in the state's deferred compensation program, resulting in a plan for the board to consider in the next three months.

The studies are a continuation of calls state officials have made over the past several months to reduce the amount of money flowing out of state coffers and into the pockets of investment advisers.
Gov. Tom Wolf and Treasurer Joe Torsella sent a letter to the boards of SERS and PSERS in April urging them to significantly reduce investment fees and certain administrative costs in an effort to make at least a small dent in both systems' large unfunded liabilities. The studies SERS now plans to conduct look specifically into the three recommendations Wolf and Torsella made in that letter.

Wolf believes that if both funds adopt these suggestions, they could cut their collective funding gap by 10 percent. He and Torsella, who sits on the boards of SERS and PSERS, both praised the SERS board's decision to look into their recommendations.

State officials are meanwhile sorting through the details of more comprehensive reforms that were signed into law in June. Officials say these changes will not solve Pennsylvania's current pension liability issues but could help the state save money in the long run.

http://www.nbcphiladelphia.com/news/...446797223.html
Quote:
$858 Million: 'Outrageous' Management Fees Paid By Pennsylvania's Pension Fund in the Last 5 Years

Management costs for the $26 billion state pension system are fourth highest in the country, the governor and state treasurer claimed earlier this year.
Officials who oversee Pennsylvania's $26 billion pension fund for state workers have begun studying ways to reduce management costs, which Gov. Wolf and Treasurer Joe Torsella cited in April as the fourth-highest in the country.
The governing board for the State Employees Retirement System (SERS) last week voted to begin working to reduce those management costs that go to financial firms, which Torsella described Tuesday as "outrageous."
More than 220 fund managers split $162 million in management fees in 2016, according to the most recent audit of SERS. Since 2012, management fees have totaled $858 million.
The size of the fund, meanwhile, is $1 billion less than it was three years ago. Its value was $26.3 billion at the end of 2016.
…..
And even after the SERS board reduced its expected annual return from 8 percent to 7.5 percent in 2012, investments have sagged below that figure the last three years: 6.4 percent in 2014, 0.5 percent in 2015, and 6.5 percent last year.
The pension plan is now funded at 58 percent of its total liabilities.
A spokeswoman for SERS said management fees have been reduced already.
"Since 2010, we reduced fees by about $73 million annually," spokeswoman Pamela Hile said in an email this week. "Our goal has always been and will continue to be driving the best value in the investment decision-making to maximize results at the lowest cost over the long term and multiple market cycles."
The "points" paid on its investments to those financial firms dropped to 62 last year from a recent high of 75 in 2012. Points are financial jargon for the percentage of fees collected on an investment. One percent equals 100 points.

CONTRIBUTIONS
Spoiler:

https://www.ai-cio.com/news/pennsylv...sion-payments/
Quote:
Pennsylvania Delays Pension Payments
State treasury holds up $581 million in obligations to PSERS.
Pennsylvania is delaying more than $1.7 billion in payments due to school employee pensions and Medicaid because the state government has run out of funds.

The payments are for the state’s share of pension obligation payments to Pennsylvania’s school employees pension fund, and for reimbursements for medical care under Medicaid. The Medicaid reimbursements, which are due Sept. 22, will be delayed for at least a week, and school officials said they expected the pension obligation reimbursements, which are due Sept. 25, to be delayed by a few days, reported the Associated Press.

The treasury delayed $581 million in the state’s share of pension obligations to the Pennsylvania School Employees Retirement System (PSERS), and $1.169 billion in payments to managed care providers for medical assistance services.

“Without a completed budget, the commonwealth’s Treasurer and Auditor General have said they are not currently inclined to authorize the normal short-term lending that would typically allow for seasonal cashflow interruption,” said J.J. Abbott, a spokesman for Pennsylvania Gov. Tom Wolf. “Delayed payments will remain stalled until funding exists to meet commitments.”

State officials expect rolling delays of payments, at least until spring, said the AP, unless the budget issues are settled before then.

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  #1293  
Old Yesterday, 06:53 PM
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Mary Pat Campbell
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ok, caught up on two weeks' worth of links
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  #1294  
Old Today, 06:36 AM
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Mary Pat Campbell
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KENTUCKY

http://www.dailyindependent.com/news...4bb225235.html

Quote:
Ky. Pensions Part 2: Higher Education faces huge cost increases

Kentucky’s public colleges and universities face massive pension payment increases come fiscal year 2019 as the state struggles to address its pension crisis, according to a new state memo obtained by the Daily Independent.

In the Tri-State region, Morehead State University faces an approximate $3.2 million increase in its pension obligations for the Kentucky Employees Retirement System (KERS). The figure represents an approximate 70 percent jump in the amount of money the university will have to pay for the KERS contributions. The memo from state budget Director John Chilton indicates the university is expected to pay $4.68 million in fiscal year 2018, then almost 8 million in fiscal year 2019.

Dr. Jay Morgan, president of Morehead State, said the numbers apply to staff covered by KERS and the university is also preparing for a spike of an additional couple of hundred thousand dollars in pension payment increases for faculty contributions.

“We think our new pension numbers will increase by 3.7 or 3.8 million,” Morgan said.

The increases require extreme efficiency on expenses but Morgan said the university will be able to handle the increases.

“We are looking closely at a lot of our expenses,” Morgan said. “Four million (more) will not cripple us but we will have to pay very special attention to new hires.”

Morgan added “we will be okay in the long run. We won’t like it but we will be okay.”

The proposed increases for the Kentucky Community and Technical College System are even more staggering. The memo from Chilton said KCTCS faces a nearly $8 million increase in pension contributions for a single year. KCTCS is expected to pay $11.5 million in pension contributions in 2018, and that number is expected to skyrocket to $19.5 million in fiscal year 2019, representing a 70 percent increase for one year.

KCTCS President Jay Box said the pension increases are coming in the face of proposed significant cuts to all of education.

“We’ve had 10 budget cuts in the last eight years,” Box said. "Our board of regents has mandated reserves for that very purpose because we are concerned there will be budget cuts at any time.”

Box said the pension costs are a significant concern.

.....
"On one side they are talking about potential cuts of 17.5 percent in the next fiscal year for everybody including higher education and k through 12,” he said. "So that’s 17.5 percent less money and on top of that we are going to have a pension increase that is going to result in another 8.2 million. We also have fixed cross increases we can’t control, utility costs, insurance costs, That is about another 8 million give or take. That 16 million in new costs without doing anything and then 17.5 percent cuts. Our operating from the state is about 182 million. It is a double whammy.”

Similarly huge increases are expected at Murray State, Northern Kentucky, Western Kentucky and Eastern Kentucky.

State legislators locally said they want to keep the promises made to those who have been in the system.

http://www.kentucky.com/news/state/a...174783431.html

Quote:
Bevin 'lost his courage' on pensions, tax reform, Rep. Kelly Flood tells teachers
Sep 22, 2017
Rep. Kelly Flood discusses the state pension crisis during a town hall at Frederick Douglass High School Thursday evening, September 21, 2017. Video by Matt Goins.
matt@mattgoins.com
Video at link



http://www.rcnky.com/articles/2017/0...eSYmh0.twitter

Quote:
With Increased Pension Costs on Horizon, Taylor Mill to Join Ft. Wright in Lawsuit

Add Taylor Mill to the list of Northern Kentucky cities faced with a daunting increase in pension contributions.
The city can also be added to the list of cities in the region that may turn to a tax increase to offset the costs.
As the Commonwealth of Kentucky prepares to deal with a drastically underfunded pension system, the cost burden on cities in the state is expected to be substantial. Taylor Mill city administrator Jill Bailey told the city commission last week that the city could pay roughly $275,000 more than usual over the next two years.
Municipal leaders across the state are upset that the state system seems to be the drag, as cities have faithfully made their payments to the retirement fund for their employees.
Mayor Dan Bell explained that the Kentucky Retirement System (KRS) is only for the state employees and CERS is for County and city employees. Since the creation of both systems, governments were required by law to pay a certain amount into their particular system, which the cities and counties have been faithfully doing.
"It's called an inviolable contract," said Bell. "It used to be that about seven employees would be contributing for one retiree, but now it is two employees contributing for one retiree."
The problem came, according to Bell, when the state made bad investments with its retirement fund, and allegedly used some of the money for other costs, which has left the state retirement system at just 16 percent funded, making it the second-worst funded retirement system in the country, behind Illinois.
Not only is it underfunded, according to Bell, but since the two systems are connected, monies from the CERS, which is approximately 62 percent funded, are allegedly being used to help out the KRS, which could be illegal. The City of Ft. Wright currently has a class action lawsuit against the state that would force KRS to refund CERS. Wednesday evening, the Taylor Mill city commission voted unanimously to join the City of Ft. Wright in that lawsuit, and Mayor Bell promised to encourage other cities to join the suit at Saturday's Kenton County Mayors Group meeting.
Bell explained that Governor Matt Bevin will likely call for a special session of the legislature where the pension crisis is expected to be addressed, but no date has been set. Because of this uncertainty, cities and counties are left in the position of believing they are going to be saddled with this huge debt that they have no way of paying for except to pass it on to their citizens in the form of taxes.
So when Bailey brought up the subject of the tax rate, she told the commissioners that they could take a compensating rate, which would be .4640 per $100 of assessed value, or the compensating rate plus 1, plus 2, plus 3 or plus 4 percent, all of which would require a public hearing. She told commissioners that their personal property of .750 per $100 of assessed value is already the highest rate they can take, so it will stay the same.
Bailey asked the commissioners for their input and said they would set up a public hearing for compensating plus 4. She also said they have to set the waste collection fee, which will probably go up from $145 to $175 per year for each household, since the cost from Rumpke has gone up and the city passes that cost on, but no final decision was made.

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  #1295  
Old Today, 06:38 AM
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Mary Pat Campbell
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PENNSYLVANIA
INVESTMENT FEES
http://www.nbcphiladelphia.com/news/...446797223.html

Quote:
$858 Million: 'Outrageous' Management Fees Paid By Pennsylvania's Pension Fund in the Last 5 Years

Management costs for the $26 billion state pension system are fourth highest in the country, the governor and state treasurer claimed earlier this year.


Officials who oversee Pennsylvania's $26 billion pension fund for state workers have begun studying ways to reduce management costs, which Gov. Wolf and Treasurer Joe Torsella cited in April as the fourth-highest in the country.
The governing board for the State Employees Retirement System (SERS) last week voted to begin working to reduce those management costs that go to financial firms, which Torsella described Tuesday as "outrageous."

......
The "points" paid on its investments to those financial firms dropped to 62 last year from a recent high of 75 in 2012. Points are financial jargon for the percentage of fees collected on an investment. One percent equals 100 points.



....
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  #1296  
Old Today, 07:59 AM
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Mary Pat Campbell
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NEW YORK CITY

https://www.ft.com/content/8a9bb4ba-...4-932067fbf946

Quote:
New York police and firefighters seek pension fund protection

Investment in hedge fund designed to prosper when markets are rocky


New York’s police and firefighter pension funds have invested about $127m in a quantitative hedge fund that specialises in providing protection at times of turmoil, underscoring the rising interest in so-called “crisis risk offset” programmes as the stock market marches to new highs.

The New York City Police Pension Fund and the New York City Fire Department Pension Plan — which together manage more than $50bn — have allocated the money to Quest Partners, a $1.4bn New York-based hedge fund manager that uses computer-powered “positive convexity” strategies designed to do particularly well when markets are rocky.*

The investments were disclosed in the two pension funds’ latest monthly reports, for May 2017, and confirmed by Quest. The office of the New York City Comptroller, whose Bureau of Asset Management oversees the city’s pension plans, declined to comment further on the investments. The New York City Pension Funds Systems oversees $175bn in total.


.....



Quest Partners looks to buy cheap insurance against market volatility from other investors that attempt to juice up their returns by selling it. Often the desire to “sell volatility” is so strong that the cost of such insurance is below market value, according to Mr Koulajian.

While many pension funds are trimming their allocations to hedge funds after a long stretch of underwhelming performance and expensive fees, algorithm-powered “quant” hedge funds staffed by computer scientists and mathematicians rather than economists and MBAs have become increasingly popular.

The fire and police departments’ pension funds have invested almost $2.7bn in hedge funds, about 5.4 per cent of their overall assets under management, with the biggest allocation in both cases to DE Shaw, a pioneer of the quantitative investment industry.

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