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  #571  
Old 10-29-2014, 01:43 PM
Abnormal Abnormal is offline
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Now we know who bid on that block of homes.

Quote:
The identity of the sole bidder in the auction to sell more than 6,000 of Detroit’s foreclosures is no longer a mystery. Herb Strather, a local casino and real estate developer, won the lot for just under $3.2 million. “This is more than just an acquisition of parcels. It’s an opportunity to redevelop the city I was born in and I plan to die in,” Strather said in an interview.

Wayne County acquired the more than 6,000 parcels when previous owners didn’t pay taxes. The county created a “blight bundle” by grouping together about a thousand properties in good shape with roughly 2,000 vacant lots and another 3,000 properties that must be demolished. The wrecking work, which by the terms of the auction must be completed in six months, could cost more than $24 million.

etc ...
http://www.businessweek.com/articles...sino-developer
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  #572  
Old 10-29-2014, 01:56 PM
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Gabriel Roeder Smith & Company is getting sued.

I've been reading some of their pension valuation "assumptions"....and I literally almost dropped my phone.

7.9% investment return and 4% payroll growth...in Detroit?

lulz....they are so screwed. They should have never signed of on such assumptions. If need be they should have refused the business coming from the city.
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  #573  
Old 10-29-2014, 01:59 PM
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Quote:
Originally Posted by jas66Kent View Post
Gabriel Roeder Smith & Company is getting sued.

I've been reading some of their pension valuation "assumptions"....and I literally almost dropped my phone.

7.9% investment return and 4% payroll growth...in Detroit?

lulz....they are so screwed. They should have never signed of on such assumptions. If need be they should have refused the business coming from the city.
Yeah, I posted it in the public pensions watch thread.

iirc, GRS has been the Detroit actuarial firm for a long long time.
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  #574  
Old 10-29-2014, 02:00 PM
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Also, tell the U.S. public pension actuaries that these are insane assumption sets.

They will really appreciate it.
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  #575  
Old 10-29-2014, 02:05 PM
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Originally Posted by campbell View Post
Yeah, I posted it in the public pensions watch thread.

iirc, GRS has been the Detroit actuarial firm for a long long time.
Since 1938, so I'm guessing they were most likely pretty cosy with the scheme trustees.

The litigation may bankrupt them tbh.
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  #576  
Old 10-29-2014, 02:18 PM
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Quote:
Originally Posted by jas66Kent View Post
Gabriel Roeder Smith & Company is getting sued.

I've been reading some of their pension valuation "assumptions"....and I literally almost dropped my phone.

7.9% investment return and 4% payroll growth...in Detroit?

lulz....they are so screwed. They should have never signed of on such assumptions. If need be they should have refused the business coming from the city.
lol what
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  #577  
Old 10-29-2014, 02:20 PM
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from comments in 1977:

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Originally Posted by campbell View Post
Related to the decreasing payroll issue: [will download a pdf if you click]



https://www.soa.org/library/proceedi...a77v3n415.aspx

Yes, from 1977

I can't copy/paste, so will paraphrase:

Topic 1: ERISA applied to public pension plans?

Richard G. Roeder: Our firm bases funding on level % of payroll

James B. Gardiner: What if aggregate payroll goes down?

Conrad M. Siegel: We'll get back to that in topic 4

.....

Topic 4: Proposals have been made to use less conservative actuarial cost methods, to either increase benefits or reduce costs (or both). What is the responsibility of the actuary if asked to endorse the weaker approach?

Albert Alazraki: explains situation with NY state pensions, where they were considering changing from 25-year amortization to 40-year amortization...actuaries were against it, NY didn't go through with it

"The New York State experience indicates that the temptation is great to solve 'one-time fiscal crises' by an alteration of the funding method. These one-time crises, of course, have an annoying habit of recurring from year to year."

Thomas P. Bleakney: well, I thought 40-year amortization was a good idea, and yeah, level % of payroll amortization is not kosher under ERISA, but we're not ERISA plans

Siegel: notes that an unnamed large pension system had switched to level % of payroll amortization, and that while it reduced costs immediately, the losses were catching up with the plan

....

and I still don't see anything about decreasing aggregate payroll...

..I see Massachusetts as being pay-as-you-go. Yikes. Evidently they had just switched to requiring funding

okay, since this relates, I am going to transcribe this verbatim:

Mr. Roeder: I think the key actuarial role of shifting to weaker assumptions has to do with power and the role of the actuary as a technician in the process of exercising such power. We call actuarial assumptions "financial assumptions" and we feel that the retirement boards have the ultimate responsibility to make the decision on what those assumptions should be. I think that as long as the actuary is allowed to fully express what he feels about the change in assumptions and can state exactly what he perceives to be the strengths and weaknesses of that change, he has fulfilled his basic responsibilities.

And then they move onto topic 5, which is actuarial responsibilities re: benefit design
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  #578  
Old 11-03-2014, 06:03 AM
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http://www.freep.com/story/news/loca...cuts/18009611/

Quote:
The historic hearings on whether Detroit will exit the nation's largest-ever municipal bankruptcy came to a quick end Monday after closing arguments, which were abbreviated by settlements with major creditors.

Moving the city closer to self-rule and something of a sense of normalcy, Judge Steven Rhodes said he would reveal his decision at 2 p.m. Nov. 7 after a fast-paced bankruptcy that defied predictions of drawn-out battles that could have stretched for years.

"We think we made our case and we met our burden," Detroit emergency manager Kevyn Orr said outside court after closing arguments from city lawyers, attorneys for creditors and even individuals who object to the plan.

Rhodes pressured Detroit's bankruptcy attorneys to justify better treatment for pensioners than financial creditors, making for an unexpectedly dramatic exchange.

.....
Still, Judge Rhodes must approve the plan after an exhaustive trial that lasted nearly two months. During the proceeding, Rhodes heard testimony from dozens of witnesses and examined hundreds of exhibits documenting the city's plan to slash more than $7 billion in unsecured liabilities and reinvest $1.4 billion over 10 years in basic services.

Bennett said the largely amicable plan is "very remarkable" after a tumultuous negotiation period with retirees, insurers, bondholders and unions.

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  #579  
Old 11-06-2014, 06:27 PM
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Meanwhile:

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The Deal to Sell 6,000 of Detroit's Blighted Properties Falls Apart



Just a week after his surprising bid to buy more than 6,000 tax foreclosures in Detroit, casino and real estate developer Herb Strather has withdrawn his offer, the Detroit Free Press reports. Strather’s bid was unexpected because the county and city stuffed the bundle with thousands of properties that would require an estimated $24 million to demolish, purposefully making the package so unattractive that no one would want it. That way the county could legally transfer the properties to the city, which has a newly rejuvenated land bank that’s leading the local blight-removal effort.

Strather didn’t immediately return a call seeking comment. Last week he told Bloomberg Businessweek that he’d hoped to keep some of the best parcels for his investment fund and find a way to get the city to use federal funding to demolish the decrepit properties. The Wayne County’s deputy treasurer, David Szymanski, said a plan like that wasn’t “going to fly,” and the land bank said it’s allowed to demolish only properties it owns.

Szymanski said his office met with Strather and laid out the expectations that the developer take responsibility for demolishing the blighted properties and participate in other programs the land bank runs that gives neighbors the chance to pay $100 for empty lots. Those expectations were public before the auction closed, and Szymanksi says, “I don’t know how somebody could interpret” the original guidance to allow a plan to offload the worst properties on the city. Szymanski says Strather also met with Detroit Mayor Mike Duggan before withdrawing his offer.

Strather was the only bidder, so the properties now go to the city. Szymanski says he anticipates the city will ask the county to transfer the properties directly to the land bank. The process could take as little as three weeks. “When you are talking about transferring 6,000 properties, it might take a few minutes longer,” he quips. Strather’s bid in the end will be more like a hiccup on the path of what was planned all along.
http://www.businessweek.com/articles...-apart#r=hp-ls
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  #580  
Old 11-07-2014, 02:16 PM
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Judge OKs Detroit's plan to get out of bankruptcy

Quote:
Detroit is cutting the pensions of general retirees by 4.5 percent, erasing $7 billion of debt and promising to spend $1.7 billion to demolish scores of dead buildings, improve public safety and upgrade basic services, among other key steps.
http://www.foxnews.com/politics/2014...ut-bankruptcy/

Quote:
Martha "Marti" Kopacz of Boston, said it was "skinny" but "feasible," and she linked any future success to the skills of Mayor Mike Duggan and the city council ...
Detroit is doomed!
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