It is only a matter of time before the public pension crisis, as enabled by a cabal of actuaries devising assumptions and methods primarily to understate contributions, finds fall guys. It happened this week in Detroit and to Gabriel Roeder Smith & Company (GRS) as reported in the New York Times:
Politicians do some stupid things since their expertise is generally in propaganda and not in areas like public health or public pensions and their everyman ignorance can have disastrous consequences unless real experts assert themselves.
This week we saw New Jersey Governor Chris Christie embarrassing himself on the Ebola quarantine and being criticized by:
When politicians get in a room with only their immediate enablers to bang out solutions to real problems without consulting any real experts they often come up with moronic ideas, designed to solve through deception, but this one by the New Jersey “Legislature’s leading expert on pension issues” might be the dumbest one ever.
Apathy is not enough of a reason.
Kirby Goidel in America’s Failing Experiment (How We the People Have Become the Problem) argues that democracy failed us because the general pubic has been anesthetized to what our government is doing. But a patient in surgery is also also anesthetized and has very little knowledge of what their doctor is doing yet most times they are not butchered.
First some quotes from Goidel’s Introduction that make his point and then my take:
The costs of retiree health benefits for public employees are massive and the values placed on these benefits is still understated even after GASB 45.
Union County just got their 2013 OPEB valuation report and, for a government entity with a half-billion annual budget, it showed unfunded liabilities of $667 million. Much more on the numbers in this report later but, for now, one of the charts provided within that report gave a clear indication of where the unions are heading in bargaining these numbers down:
Donald Trump and Carl Ichan do not want to pay into the Pension Plan of the National Retirement Fund from which employees of Trump Taj Mahal get their pension and health care benefits and a judge is with them while union representatives are taking it personally:
But examine the funded status of that plan and you will see that it’s just business and doing business with a union that sponsors a multiemployer plan these days is not healthy.
It was disappointing to see that the Governor’s Pension and Health Benefit Study Commission initial report doesn’t provide any true detail as to how well funded parts of the pension system are………The truth is the New Jersey pension system is not one monolithic fund that is hemorrhaging cash daily. In fact, the state manages five pension plans for State and local employees. Of those five, the Police and Firemen’s Retirement System (PFRS) is financed mainly by local governments who, unlike the state, have been making their required pension payments……….If this Commission is truly focused on the health of the pension system they would spell out the differences in the system and focus on the funding ratios, level of benefits and employee/employer contributions of each plan. If they were to offer the public those facts, it would undermine their proposal that benefits must again be rolled back or employees must face the elimination of their pension plans.
If you really want the truth…..