No Foolin’ Public Pension and Finance Roundup 3April2011

The old story — I been busy.

And since I announced my resignation at my current job on Wednesday…. well, I don’t know how much longer I’ll be around here. We’ll see. [I start a new job April 18]

But while I’m here, let me round up some morsels of DOOOOOOOOOM!

GENERAL

Mine workers rally for public employees. Aw, so touching when those who risk black lung walk for the cubicle warriors. Guys, once you realize that public employee unions are a whole different beast from private unions (i.e., with public unions, the “bosses” are bought & paid for by the unions, and it’s other people’s money they’re bargaining over), you might be a little less about the solidarity.

An econ prof from California going over various reasons that public pensions are sucking right now. Oh, Prof. Rasmus. Hung up on the blame. Guess what, hoss? Doesn’t matter who or what caused it. Not going forward. You might think it helps with the PR problem to blame Wall Street fat cats, but when you’re proposing to take money out of taxpayer hides, it’s just not going to fly. You can say “Soak the rich”, but generic taxpayers know there aren’t enough rich to be soaked…and even if there were, they wouldn’t sit still for it.

For a smart guy, Prof. Rasmus, you sure don’t know PR. I recommend reading Influence by Cialdini… might make your stuff more effective. [Why do I give advice to people I don't agree with? Because I know they won't listen to me.... or even read me in the first place. But I do recommend that book - lots of fascinating stuff in there.]

If “soak the rich” isn’t going to work, how about hedge fund returns? Nope.

On the other side, Arnold Brock makes the easy-to-predict statement that gold-plated public employee benefits are soon to die in the U.S. Thanks for the insight, Sherlock!

A view of the U.S. pensions crisis from across the pond.

I’ll believe it when I see it: GASB to ask for better public pensions reporting.

John Bury goes to the Enrolled Actuaries meeting – and here’s what he has to say: part 1: too much government, part 2: NJ is special, part 3: expecting more Prichards.

Frank Keegan covers the EA meeting, too. Actuaries get a taste of what real politics is like.

3 reasons why munis are still safe? In the short term, sure. That power to tax isn’t unlimited, dumbass. And “historically, defaults are rare” is just as meaningful as “historically, you don’t have the entire world financial system melting over total financial fantasies”… yeah, 2008 would like to talk with you.

CALIFORNIA

This bodes well: Contra Costa employees retiring at twice the rate of average levels. True, they’re not having to pay the older workers (who tend to be the higher salary workers workers)… but now they’re getting paid to do no work at all. And they were promised to be paid for their past work already. It might have been nice to have a few more years to accumulate assets to pay them for their pensions. Who knows, maybe the new retirees will take up dangerous hobbies.

Shocker: California GOP makes an issue of public pensions.

There might be a reason that ploy is getting play — there are some very real price tags hitting California municipalities. Now. For example, Lompoc finds pensions hitting its budget. And Kern County looks at its options. As does Riverside County.

Police and firefighter unions in California seem to have recognized reality.

Why are these pension proposals always dueling? Why can’t they be civilized and bicker over tea or something? [That one relates to San Diego]

Barebones run down of Gov. Brown’s pension proposals:

1. Eliminate Purchase of Airtime. ….

2. Prohibit Pension [contribution] Holidays.
….
3. Prohibit Employers from Making Employee Pension Contributions.
….
4. Prohibit Retroactive Pension Increases.
….
5. Prohibit Pension Spiking: Three Year Final Compensation.
….
6. Prohibit Pension Spiking: Define Compensation as Only Regular, Non-recurring Pay.
….

7. Felony Convictions. Prohibits payment of pension benefits to those who commits a felony related to their employment.

Sounds good to me going forward. But what does it do about the past screwups? Another on the same. What would the impact be on current fundedness shortfall? Not much. It would have had more impact if it had been passed 20 years ago….

GOP happy with that first look from Brown, but want more more more!

Heck, let’s throw in a pic: [doesn't matter if it gets cut off - the important stuff is to the left]

For all its pension problems, San Diego praised for its transparency as a muni issuer.

Oh, by the way, the teachers pension fund is about $56B short. No worries. I’m sure Hollywood has about that much loose in its collective couch cushions, right?

FLORIDA

Pensions a hot issue in Coral Gables for upcoming elections (April 12).

Florida Senate committee approves increased public employee contributions to their pensions. Still, there are some differences in the Florida GOP over how to handle the pensions issue.

GEORGIA

Local governments in Georgia feeling the weight of public pensions.

ILLINOIS

Back to that proposal from Cullerton (that I had gotten corrected about): a comparison of how the Chicago teachers pensions are funded compared to the rest of the state’s teachers.

Chicago pays truckers to do nothing. This sweet deal has been around for almost 30 years.

KANSAS

Kansas House passes a bill for a defined contribution pension plan for state employees. Definitely for new hires, but also sounds like they’ve got some “incentives” built in to nudge current employees into the plan. Sounds iffy that the Senate would pass. A nothing followup on how people want stuff resolved.

MARYLAND

The public employee unions in Maryland expect a big [short-term] win. More from the teachers union on pension reform.

But wait — they shouldn’t have jumped the gun on that. Looks like the negotiations aren’t going too well.… anybody here want to bet on the next NFL season, btw?

NEW JERSEY

Gov. Christie proposes pension reforms. Not really a way to get headlines now, gov. Everybody’s doing it =now=.

Oh, delicious. Politician railing against double-dipping is doing it himself. (Did I mention it was a Democrat? Did I have to?) Perth Amboy citizen has some more ideas about preventing double-dipping.

But rest assured, even if his idea is not implemented, only a select few can exploit the loophole that Mr. DiVincenzo is using. Doesn’t that make you feel better? That such a clever man is a politician?

NEW YORK

NYC Comptroller talks about transparency through posting the asset-side info of the public pension funds online. Okay, would you like to post the liability side as well? Just so everybody can get a full picture.

A few NY municipalities talk about the strain of their pension costs.

NORTH DAKOTA

Legislative approval for increases on both employee and employer side for pension contributions. But do not approve of the addition of people with financial expertise to the pension investment board.

OHIO

A county politician calls for investigation into pension contribution amounts – they are getting a mite big, eh?

OKLAHOMA

Retirement age for new hires increased. Yay. That may reduce costs 30 years from now.

PENNSYLVANIA

Pittsburgh pension likely to be taken over by state, after all its shenanigans to avoid such an event. Still wonder what that last-minute correction/error was about at the end of 2010.

RHODE ISLAND

Nothing to see, folks, don’t look at the corpse, move along: Rhode Island pension trouble nothing new.

For something that’s nothing new, it’s getting pricey for such a small state. Here’s a bit of wisdom from a union leader:

Added Local 2882 President Cathy Paquette: “The answer to the pension problem … is, if you hire more state workers …You would get more people paying into the pension system, and you won’t have any unfunded liability.”

Just bask in that wisdom. Aaaaaaaah. Mmmmmmm.

In general, the cities aren’t enthused about the governor’s plans.

“It’s not going to be a carrot and stick. … It’s going to be a baseball bat, but not a baseball bat to the cities and towns, but to the taxpayers,” he said.

Talk about a contrarian: teachers need to be liberated from tradition pension plans. The idea is that DB pensions aren’t portable, and are a really bad deal if you move after 5-10 years on a job, which is not that unusual for someone of my generation (and I’m moving on after only a little more than a year in my current one….)

TEXAS

Mayor of Houston looking for savings by reducing pension contributions. The choice may come down to current jobs versus future benefits.

A look at double-dippers in Texas and elsewhere.

VIRGINIA

Governor sends back budget, seeking higher contributions to pension plan and pension reforms.

About Meep

Meep is a member of the Irish Catholic mafia, having a suspiciously high number of green-eyed, red-haired friends. While she doesn’t have red hair herself [except when she goes into the sun (rare for any vampire)], she does have green eyes. She’s a raving Papist and is a life actuary on the side [i.e., she counts dead people]. An amateur pain-in-the-ass [willing to go pro!], she likes covering retirement, mortality, math, and education issues.
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5 Responses to No Foolin’ Public Pension and Finance Roundup 3April2011

  1. Dan Collins says:

    Gee, we’d miss you if you left. Can you say anything about the new gig?

    Like or Dislike: Thumb up 0 Thumb down 0

    • Meep says:

      I’m finally going to get paid to write!

      After all these years of writing for free!

      It’s not a journalism gig, though. I’m doing insurance industry research & publication. So this should be fun…. (I have odd ideas of what constitutes fun)

      Like or Dislike: Thumb up 0 Thumb down 0

  2. Pingback: EPA Regulations Being Voted on in D.C. | POWIP

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