Public Pension Propaganda (2) – The Lie

“The vast majority of statewide plans are in good financial shape.”

Hank H. Kim, Esq. Executive Director and Counsel National Conference on Public Employee Retirement Systems

So says a lawyer and purported expert in this field to a bunch of reporters. NCPERS averaged 216 responders to a survey who happened to have a funded ratio of 76.1% and Fitch ratings says 70% or above is adequate. 

Who’s to argue?

Mr. Kim is full of shit and if he were speaking in front of a group not made up of glorified stenographers he would have been called out.

1) There are thousands of state and local plans.  Sending out questionnaires and drawing conclusions from the 216 who get back to you is beyond silly.  Did Prichard, AL or Central Falls, RI return their surveys?

2) 70% is an abysmal funded ratio especially when you are using actuarial assumptions that understate liabilities and ‘smoothing’ methods that overstate assets.  Plans in the private sector under current funding rules would be required to limit benefits and develop a plan to return to solvency.   The Fitch 70% reference likely came from this article where

“Fitch noted the systems that pose the greatest risks are those with significant unfunded liabilities for which the government’s annual payments have been significantly less than an actuarially-determined ARC over multiple years. Plans with relatively low funded ratios prior to the market downturn — below 70% — will likely be in a weak position as market losses are fully reflected.”

so if below 70% is ‘relatively low’ then 70% or above is not ‘relatively low’ which some can interpret to be ‘adequate’ should it suit the purposes of the sponsors who pay their salaries.

11 responses to this post.

  1. Posted by Javagold on January 22, 2012 at 3:06 pm

    They are all adequately fundend……..until they are NOT. That time is coming very soon


  2. Posted by Anonymous on January 22, 2012 at 3:41 pm

    I wonder what the median funded ratio is for those plans which did not respond to the survey? I’ll bet there’s some bias there–seriously, what municipal treasure is going to raise his hand and announce to the world his police pension plan is 55% funded?


  3. Posted by Anonymous on January 23, 2012 at 7:01 pm

    Luckily in NJ we have a governor and legislators who care. They saved the pension system very creatively. They did not contribute for 16 out of 18 years and now they are going to take 7 more years to make a full payment. By then the pension should be in great shape.


    • Posted by Tough Love on January 23, 2012 at 9:17 pm

      Pressured by and easily swayed by Union campaign money and election support, our legislators violated their obligation to taxpayers and “promised” Public Sector way too large pensions. But stepping back, the taxpayers have probably put in funds consistent with what APPROPRIATE promises would have called for.

      So be it. What’s so wrong with the workers NOT getting the excesses associated with inappropriate (and perhaps criminal) collusion between their Unions and our legislators ?


      • Posted by Anonymous on January 24, 2012 at 6:27 pm

        Union should not be capitalized you whiny, sniveling, jealous little creep.


        • Posted by Tough Love on January 24, 2012 at 7:23 pm

          Looks like I hit a nerve …. getting scared your pension won’t be there?

          You should be …. Taxpayers have absolutely no intention of paying for this.


  4. Posted by bpaterson on January 25, 2012 at 1:25 am

    interesting how they are tossing around the word jelousy. No jelousy at all, just an outrage that so many are forced into paying dearly for a corrupted system of self dealing that we had no control over. The only jelousy I see can be equated to a person being jelous of the gun that the hold-up artist is pointing at him.


  5. Posted by Javagold on January 25, 2012 at 1:16 pm

    Jealous????….. Of what?…..worthless IOUs and being left holding the bag ….. Getting played for fools by the politicians and union leaders …… Only public pigs would think that is something to be jealous of


    • Posted by Tough Love on January 25, 2012 at 1:37 pm

      Christie is doing the best he can for taxpayers …. he STARVING the Plans. Under proper accounting most are only 50-60% funded now, and with the 1/7, 2/7, grade-in to full funding in 7 years, another $15 Billion will be added to the debt. At that point it will be clear to everyone it cannot be salvaged and we’ll finally stop the ridiculous talk about “funding” this grossly excess Plan albatross, and start seriously addressing the 50+% reduction to the unfairly promised BENEFITS.

      Christie’s plan is right on schedule !


  6. The main topics pensions appears to be inside reports weekly. Using this type of can bring confusion, so in the following paragraphs we look with exactly how in your free time GP’s may plan efficiently for his or her …


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