Role of the Actuarial Profession in the Public Pension Crisis

Jeremy Gold summed it up well in his presentation at the 2015 MIT Center for Finance and Policy Annual Conference:


Provocative excerpts:
.

.
Full presentation:
.

138 responses to this post.

  1. Posted by Tough Love on September 28, 2015 at 4:05 pm

    I couldn’t agree more, but would go FURTHER. While I’m quite sure each INDIVIDUAL actuarial assumption used in calculating the Plan liability and normal cost falls within the (quite wide) range of “reasonable” assumptions (many being at the upper end of the range resulting in LOWER liabilities and LOWER ARCs), the actuaries have a very clear responsibility to be reasonably sure that the Totality of ALL assumption when taken TOGETHER, does not combine in a way to produce implausible/unreasonable results.

    There is no doubt in my mind that many Plan actuaries fail to meet that standard …. and the actuaries who sign off on such should be held accountable …. not financially responsibly (as the Plans don’t* really “lose” any money from such actions …. just shifting the shortfall to later taxpayers) but publicly censured (or more?) by the Disciplinary Board.

    A VERY good start toward appropriate reforms would be for the Actuarial Profession’s governing bodies to clearly state that State Statutes/Regulations MUST be ignored (and provide no defense) if using unreasonable assumptions when considered as a whole …… inducing that they MUST NOT even PROVIDE the Plan with a valuation using such unacceptable assumptions and/or methodology.
    ——————————————————————-
    * One might argue that there is a REAL $$$ cost of unreasonable assumptions under the argument that had those who decide on the richness of Plan formulas and provisions would have granted less generous ones had they know just how costly these Plans would be under more reasonable/appropriate assumptions.

    Call me a skeptic, but I believe it’s a rare Elected Official who truly SEEKS such truth, most KNOWINGLY looking the other way to please their Public Sector workers (with rich pensions & benefits), who will return the favor with generous campaign contributions and election support.

    Reply

    • Posted by Jim Palermo on September 28, 2015 at 4:25 pm

      TL, I was among that small group of elected officials seeking the truth from the actuaries. For many years my village in suburban Chicago used very dated mortality table which lowered the ARC and boosted the funded ratio. My board colleagues insisted that we ‘trust the expert’. Later, when we hired a new actuary, the other trustees were surprised when our ARC increased by 20%. By using false assumptions, our village was spending money it didn’t know it didn’t have because too few elected officials asked the right questions.

      Reply

      • Posted by Tough Love on September 28, 2015 at 6:27 pm

        I don’t doubt you, but the REAL question is whether your Board Colleagues WOULD HAVE (had they HAD more accurate cost estimates) materially actually ACTED upon it ?

        Most don’t, because they don’t want to upset the (Campaign contribution / election support) apple cart, and do not have the stomach for the gut-wrenching battle that would assuredly follow by your Public Sector Unions/workers (ESPECIALLY, Safety workers).

        Reply

        • Posted by Jim Palermo on September 29, 2015 at 12:18 am

          For a couple years I recommended the village hire its own actuary; fellow board members balked at the ~$5,000 fee. Political contributions weren’t the issue, our local elections are typically uncontested. Other trustees were likely embarressed they didn’t recognize the poor assumptions and didn’t want to institute the costly changes.

          Reply

          • Posted by Tough Love on September 29, 2015 at 12:44 am

            Quoting …”Other trustees were likely embarressed they didn’t recognize the poor assumptions and didn’t want to institute the costly changes.”

            So because of likely “embarrassment”, they allowed the continuation of a plan design that likely costs TWICE what they thought …. and what they have been telling their Taxpayers?

            I’d bet that if it were THEIR money on the table (not that of the Taxpayers) they would have overcome that “embarrassment” quite quickly.
            ——————————–
            See my reply to John’s comment below

  2. Posted by anon2 on September 28, 2015 at 4:08 pm

    Is there a transcript of his presentation anywhere? the youtube version will make autogenerated closed captioning that looks pretty good, but I’m not seeing an option to extract that.

    Reply

  3. Posted by Anonymous on September 28, 2015 at 6:52 pm

    Actuarial have been and should continue to be held financial responsible for their negligence if applicable. I know some are link fixated so I’ll follow up this post with an example. Again for those link fixated, Google the web and you’ll find other examples. Like most private sector out of court settlements, no wrongdoing is admitted and the settlement is for pennies on the dollar – CAPITALISM!

    Reply

  4. Posted by PatB on September 28, 2015 at 9:40 pm

    John- Is this actuarial practice common with private sector plans?

    Reply

    • It is a completely different set of issues with private sector plans. for the most part in my small-plan world nobody would seriously solicit low liability bids since the person doing the hiring of that actuary would b the person who would take most, if not all, of the hit when the plan terminated while underfunded.

      The other notable difference is that private sector actuaries started out being given discretion as to the choice of actuarial assumptions and then their choices were limited by a range and now the funding assumptions are practically given to us.

      Reply

      • Posted by Tough Love on September 28, 2015 at 10:39 pm

        Re your 1-st paragraph ……… Yes, THAT’s called “having some SKIN in the game” …. which NONE of the scoundrels running Public Sector Plans have.

        Expanding on your 2-nd paragraph for the less-informed……… That “range” of assumptions TYPICALLY generates a pension liability and Normal Cost DOUBLE that which would result if using the assumptions/methodology commonly employed by Public Sector Plans.

        Reply

  5. Posted by Anonymous on September 29, 2015 at 7:40 am

    In the 60’s they had a saying for this, “do unto others then split”. Kinda like do as I say not as I do, which government and corporate America are genius!

    Reply

  6. Posted by dentss dunnigan on September 29, 2015 at 8:56 am

    Yep pensions will be paid all right …but by whom….Millennials, why are you not angry about …

    Having to pay Social Security when it won’t be there for you.
    Paying exorbitant taxes for public pension handouts and boomer retirements at age 50 for which you receive negative benefits.
    Obamacare for which you overpay to support the obese and the nicotine addicts.
    Enormous student debt burdens for which you received little benefit.

    Read more at http://globaleconomicanalysis.blogspot.com/#xMfQyht4UDIeHiVU.99

    Reply

    • They are not angry because no one is telling them how screwed they are. It will really hurt when they are old themselves, but by then the perpetrators will be long gone.

      https://larrylittlefield.wordpress.com/2014/08/10/generational-equity-and-the-legacy-of-todays-politicians-update/

      You forgot to include the worse family circumstances those under age 50 grew up with, on average, compared with their own.

      https://larrylittlefield.wordpress.com/2014/08/13/generation-greed-and-the-family/

      But Obamacare isn’t bad for the young as you claim — except in New York.

      https://larrylittlefield.wordpress.com/2013/11/23/new-york-government-of-by-and-exclusively-for-todays-seniors-leaving-nothing-for-those-coming-after/

      Reply

      • Posted by Anonymous on September 29, 2015 at 1:38 pm

        Appreciate the doomsday reality check, I guess? Just wondering where you, your parents, and children fall on the economic food chain, yes it matters – alot! We need to know what’s got us to this point so we don’t repeat the same mistakes. We don’t need more Ron Paul economic outlook videos, we need middle ground real workable solutions. Both sides have to drop their staunch ideological BS and “compromise” for the greater good.

        Reply

        • Posted by Tough Love on September 29, 2015 at 2:30 pm

          Quoting Anon …… “We need to know what’s got us to this point so we don’t repeat the same mistakes. ”

          Greed ……….. insatiably greedy Union/workers and self-interested, vote-selling, contribution-soliciting, taxpayer-betraying Elected Officials, MORE than willing to trade their favorable votes on Public Sector pay, pensions, and benefits, for Public Sector union campaign contributions and election support.

          CUT the pensions (for all CURRENT workers).

          EQUAL, but NOT better.

          Reply

          • Posted by S Moderation Douglas on September 29, 2015 at 3:59 pm

            It should be sufficient to cut the pensions of only the lower 30% – 40% of workers….those with only a high school education.

            The greedy ones.

          • Posted by Tough Love on September 29, 2015 at 4:12 pm

            If you recall (or conveniently forgot ???), Safety workers were excluded from the Studies that have been discussed on the blog.

            At least in NJ, except in the bigger cities, most Firemen are volunteers, but Police with “BASE PAY of $125K+ after only 5 years and Total Compensation packages of EASILY $200K+ (again after only 5 years) THEY are the workers whose compensation screams for reduction.
            ————————————————-

            And while you claim that those in the Public Sector with Masters degrees are under-compensated, I remain highly skeptical. Most Public Sector workers with Masters degrees are Teachers with a Masters in “Education”. I highly doubt that that is as difficult to obtain (or as meaningful) as a Masters Degree in a subject matter …. as are ALL of those in the Private Sector.

          • Posted by Anonymous on September 29, 2015 at 4:31 pm

            Ah yes GREED (aka, CAPITALISM) which isn’t just UNIONS! Interesting through the past decades that have brought us to the “brink” America’s top 1% net wealth accumulation has grown exponentially. Fair and equal indeed, I’m not talking socialism or wholesale wealth redistribution but who’s kidding who. Yeah I know two wrongs don’t make a right – question is which right was wronged first?

          • Posted by S Moderation Douglas on September 29, 2015 at 5:09 pm

            Actually, I believe the EPI study, the CRR study, and the SLGE included all public employees, and they all concluded public workers were either underpaid or roughly equal. Biggs and Richwine did a 2011 study (Are California Public Employees Overpaid?) in which they included all state and local workers, concluding a 30% public worker overall advantage. “Correct valuation of benefits”, again, was the big difference in AEI and the other studies.

            The 2014 Biggs study is the only one to exclude safety workers.
            ………………………………………….
            Quoting TL,

            “And while you claim that those in the Public Sector with Masters degrees are under-compensated,…….”

            Moderation made no such claim. I am The Messenger. Keefe said it. Munnell said it. Biggs said it.

            Do you really think it’s that easy to be a teacher? Or a policeman, for that matter. Many of whom have Bachelors or even advanced degrees.

          • Posted by lukeu on September 29, 2015 at 5:42 pm

            Okay, cut the pensions and pay all the workers for all of the years they were under paid plus interest. That would add up to a lot of money, say at least 8% a year for32 years for me. I think i would be better off. But of course you don’t really mean equal now do you?

          • Posted by Tough Love on September 29, 2015 at 9:20 pm

            Anon, Can we average in the unnecessary cost of all the dead-wood that hung around for the last ten+ years of their career (doing little) just to get that fat pension ?

          • Posted by Anonymous on September 30, 2015 at 8:03 am

            At this point, cut everything, pensions, SS, welfare, medicaid, medicare, tax breaks and loop holes for corporations, double dippers, disability cheats, make the illegals pay into the welfare and housing, CUT it ALL across the board. People will adjust!

          • Posted by Anonymous on September 30, 2015 at 5:39 pm

            Talk about deadwood, you spend hours of work time on this blog. I assume you let your employees do the same.

        • “Just wondering where you, your parents, and children fall on the economic food chain, yes it matters – alot! We need to know what’s got us to this point so we don’t repeat the same mistakes.”

          Rich and lucky is the way I would put it.

          My Silent Generation parents rode the wave upward, moving from an apartment in a two-family in an older cities in the 1960s, moving to the suburbs and then struggling and being forced to leave NY for work in the 1970s, doing well thereafter. I had a solid family life. But having come of age in the tough economy of the 1970s I made some different choices.

          With regard to personal finance, I wrote a series of post starting with this one.

          https://larrylittlefield.wordpress.com/2014/08/23/repost-how-then-should-we-live-thoughts-on-possible-adaptations-in-household-economics-in-the-wake-of-generation-greed/

          Follow along by clicking to the next one at the bottom, and you’ll get the choices we made and how that compares with the current situation.

          Reply

          • Posted by S Moderation Douglas on September 29, 2015 at 4:15 pm

            My humble yet wise father said once that he had a viable solution to all traffic congestion problems. No one shall be allowed to drive their vehicle on public roads unless said vehicle is fully paid for.

            You might have some good suggestions; I’ve never made it all the way through any of your posts. But I’m afraid if half of us lived within our means, the other half would be out of work.

            There must be a middle ground, as anonymous says.

            Moderation,

            in all things, especially moderation

          • Posted by Anonymous on September 29, 2015 at 4:48 pm

            Now this TL person is gonna talk about masters degrees??? Lol. My lord. What’s next??? What an idiot.
            Now even the value of a masters degree is coming under her scrutinizing gaze. Nothing will ever be good enough for good ol’ TL.
            What a friggin joke already

          • Posted by Tough Love on September 29, 2015 at 7:53 pm

            Yes Anon, my opinion…. so I’ll repeat it for you:

            “And while you claim that those in the Public Sector with Masters degrees are under-compensated, I remain highly skeptical. Most Public Sector workers with Masters degrees are Teachers with a Masters in “Education”. I highly doubt that that is as difficult to obtain (or as meaningful) as a Masters Degree in a subject matter …. as are ALL of those in the Private Sector.”

  7. Posted by S Moderation Douglas on September 29, 2015 at 5:27 pm

    I don’t think many people realize the importance of a teaching degree. One can be technically proficient in engineering or math, or history, a veritable expert on the subject matter, and not be able transfer that knowledge to a student. I’ve watched people try. It’s not pretty. That may be why so many teachers drop out of the profession after only a few years.

    Those who can’t teach, do something else.

    Reply

    • Posted by Tough Love on September 29, 2015 at 8:13 pm

      And VERY unfortunately, those who can’t teach but who DON’T want to do something else, CAN’T be fired … without GREAT expense and a HUGE battle by the Teacher’s unions.

      Reply

      • Those who can’t do anything else …teach, those who can’t teach, teach gym. Don’t mean to sound nasty but I have always heard this said in my circles. ha ha

        Reply

    • Posted by Anonymous on September 30, 2015 at 8:05 am

      Lets not forget that those master degrees for teachers are also paid for by the taxpayers at least in NJ! Yup, they are fully reimbursed by the school district that they work in for their masters and then get the pay bump,

      Reply

      • Posted by Tough Love on September 30, 2015 at 12:17 pm

        In the Private Sector you DON’T get a pay increase for simply earning another degree, you get it for high quality/quantity of productive contributions to the Company.

        Reply

  8. Posted by Anonymous on September 29, 2015 at 5:32 pm

    Jeremy Gold in his resume proudly proclaims himself to be the first pension actuary on Wall Street. Take a good look at the bait before swallowing it.

    Reply

  9. All the professions have failed. Actuaries, bond raters, accountants, executive pay consultants, property appraisers. All of them.

    The issue is Generation Greed.

    Reply

    • Posted by Anonymous on September 29, 2015 at 7:07 pm

      And the answer is?

      Reply

      • Posted by Tough Love on September 29, 2015 at 8:15 pm

        Defined Contribution(DC) pensions.

        If you can’t afford to pay for it TODAY (which you MUST do under a DC Plans) it is HIGHLY UNLIKELY that you will be able to pay for it tomorrow.

        Reply

    • Posted by Anonymous on September 29, 2015 at 7:24 pm

      Don’t forget about ALL the media outlets with their own greedy self interests to protect!

      Let’s face it, things aren’t perfect, they never are, and never will be. At least not in this physical world, whole different unrelated topic of discussion.

      We can be part of promoting the problem through our continued negative thoughts and actions. Thereby distancing ourselves from those whom we need to get close to, our opponents, and understand their perspective. We have allowed discourse to be the norm when compromise is our solution!

      This and other significant issues could (should) have been resolved allowing NJ and our Country to move forward. Digging trenches are great for fighting battles but the war is ended at the Peace Summit.

      Reply

  10. The biggest part of this problem is that people are retiring at age 50-55. Retirement was not meant to be a 30 year vacation paid for by someone else. If a public wants to retire at age 55, that is their choice but pay for your own healthcare and no pension until age 65. Cops from the urban cities and dangerous areas like Camden and Newark Philadelphia might be an exception. Tough job.

    Reply

    • Posted by Anonymous on September 30, 2015 at 9:55 am

      Pointed and valid observation. Reasonable to negotiate, progress is possible.

      Reply

    • Posted by Tough Love on September 30, 2015 at 12:29 pm

      I agree, The Normal (full/unreduced) retirement age for all workers (but Police and Firemen (for whom it should be no less than age 62) should be the SAME as the Social Security NRA (66 for most people today). And for EACH year of age that you begin collecting before your NRA, your pension should be reduced by the TRUE actuarial equivalent reduction of about 5% per year of age.

      You are indeed correct that the very young full/unreduced retirement ages are one of the largest contributors to the Public Sector pension mess. And we shouldn’t be hoodwinked …… it should be increased to 66 for all CURRENT workers (with VERY few exceptions ….. e.g, perhaps those ALREADY 62).

      Reply

    • Posted by S Moderation Douglas on September 30, 2015 at 12:32 pm

      Most people are not retiring at 50 or 55. I can’t speak for all retirement systems, but mine, and I think it is typical, allows retirement at 50, with a greatly reduced formula (2%@60….or 1%@50)

      An employee who started at 20 could retire at 50 with 30% of pay. I don’t think many do that. Most who “retire” at 50 are “inactive” members. They worked in government long enough to vest, usually 5 years, or more, then went back to the private sector. They can begin to draw a pension at 50 while still working in their private sector jobs (they get no retiree health care.) I have a friend who did that. It makes her car payment.

      Safety workers are another matter. In the first place, there is a difference between what is “possible” or “allowed”, and what typically occurs. A cop “can” retire at 50 with 30 years service and receive 90% of pay (in California, although that is no longer possible for new employees.) But very few do. Many work until older, and many never work a full 30 years.

      Military can retire after 20 years, below age 40, and start another “career”. They begin drawing their pension immediately (50% of pay) and family healthcare ………for life. EEOC notwithstanding, it is much easier for a 38 year old to find a decent job than for a 55 year old retired cop.

      Reply

      • Posted by Tough Love on September 30, 2015 at 1:17 pm

        Quoting ….. “Most people are not retiring at 50 or 55. I can’t speak for all retirement systems, but mine, and I think it is typical, allows retirement at 50, with a greatly reduced formula (2%@60….or 1%@50)”

        Doesn’t work that way in NJ ….. the Taxpayers get financially screwed by the full/unreduced early retirements. A full pension beginning at age 55 is worth DOUBLE (yes DOUBLE) the identical pension beginning at age 65 …. and Taxpayers are typically responsible for 80-90% of total Plan cost.

        It doesn’t matter how many retire at 50, 52, 54,…. such retirements are unnecessary and unjust and EVERY one of them costs Taxpayers a fortune.
        —————————————————-

        There is ANOTHER element of this SAME issue that materially impacts NJ’s Taxpayers unfairly. If I recall correctly, for the 1-st 5 years that you retire earlier than your full/unreduced retirement age, Nj pension Plans only reduce your pensions by 1% …. when the true actuarial reduction should be 5% (for EACH year of age).

        Just one of the MANY MANY taxpayer rip-offs approved by our Democratically controlled Legislature BOUGHT-OFF with Public Sector Union campaign contribution and election support.

        Reply

        • In NJ public pension system early retirement (before the age of 55) results in 1/4 of 1% for each month prior to that age. This is equivalent to 3% per year! ALMOST the actuarial equivalent!

          Reply

          • Posted by Anonymous on September 30, 2015 at 2:59 pm

            And the age was increased in 2011 for anyone with less than 20 years of service. ? on the exact legislative details.

          • Posted by Tough Love on September 30, 2015 at 3:21 pm

            Pat, and WHAT’S the early retirement adjustment factors for early retirement ABOVE 55.

            The simply fact that you ONLY stated it for age 55 and BELOW makes me even more skeptical ……. and of you motives (to deceive).

            And P.S., 3% is not close to 5% …. not even remotely ….. that 2% differential ALONE translating to hundreds of thousands of UNJUST pension value for those with large pensions.

          • Posted by S Moderation Douglas on September 30, 2015 at 6:34 pm

            Tier 1 New Jersey

            The way I read it, for non-safety pensions, if you start at age 20 and retire at 55, under tier 1, your pension will be 64% of FAS.

            Retire at 65 and you will get 82%

            Retire at 50, 47% of FAS

            So “A full pension beginning at age 55” is not identical to a full pension beginning at age 65.

            https://www.google.com/url?sa=t&source=web&rct=j&url=http://www.state.nj.us/treasury/pensions/pdf/factsheets/fact04.pdf&ved=0CCEQFjABahUKEwiz3Ln0pJ_IAhWLS4gKHfMRAC0&usg=AFQjCNFkOjWiDkY8co1wbwBoquZZjJ3GsA&sig2=abit1XFDSCr-uzFVWU95Hw

          • Posted by S Moderation Douglas on September 30, 2015 at 7:48 pm

            Tier 4 New Jersey

            …if you start at age 20 and retire at 55, under tier 4, your pension will be 54% of FAS.

            Retire at 60 and you will get 65.6%

            Retire at 65 and you will get 75%

            Retire at 50, 39% of FAS

            Looks like a complicated system, if I did the math correctly. I held the starting age (20) the same for all examples so the years of service will be different.

            And 39% at 50 looks like a sizable reduction from full Maximum Annual Allowance.

          • Posted by Tough Love on September 30, 2015 at 8:07 pm

            Pat, Follow-up to my earlier comment. Here’s my source:

            http://www.state.nj.us/treasury/pensions/pdf/handbook/persbook.pdf

            And here is the entire section on Early Retirement adjustments:
            ——————————————————————————–

            Early Retirement

            Available to members who have 25 years or more of
            pension membership service credit before reaching
            age 60 for Tier 1 and Tier 2 members, or before age
            62 for Tier 3 and Tier 4 members; or with 30 years
            or more of pension membership service credit before
            age 65 for Tier 5 members. The benefit is calculated
            using the appropriate Service Retirement formula;
            however, your allowance is permanently reduced if
            you retire prior to attaining certain ages as defined by
            your membership tier.

            For Tier 1 members who retire before age 55,
            your allowance is reduced 1/4 of 1% (3% per
            year) for each month under age 55.

            For Tier 2 members who retire before age 60,
            your allowance is reduced 1/12 of 1% (1% per
            year) for each month under age 60 through
            age 55, and 1/4 of 1% (3% per year) for each
            month under age 55.

            For Tier 3 or Tier 4 members who retire before
            age 62, your allowance is reduced 1/12
            of 1% (1% per year) for each month under age
            62 through age 55, and 1/4 of 1% (3% per
            year) for each month under age 55.

            For Tier 5 members who retire before age 65
            with at least 30 years of service, your
            allowance is reduced 1/4 of 1% per month (3%
            per year) for each year under age 65.
            ————————————————————–

            So just as I expected……………

            Your claimed 3%/year-of-age reduction only applies BELOW age 55. For Early Retirement ABOVE age 55 the reduction is only 1/12% /month or 1% per year of age.

            Given that the TRUE actuarial equivalent would be a reduction of 5%/yr, that’s ANOTHER giant Taxpayers rip-off, OFTEN costing hundreds of thousands of dollars per retiree exercising this option.

            Where does this Legislature-approved THEFT of taxpayer wealrth end ?

      • @ SMD I can only speak from my own experiences in NJ but most of the neighbors, friends, family members etc that were in public sector jobs retired no later than age 58. My one friend who was a state worker in the Treasury Dept retired at 49 with 25 years. Others include teacher, school employees, cops and county workers. This is a huge problem bc the life expectancies today can be well into the 90s. It is also a huge problem bc there seems to be so many public workers that I wonder if there is a private sector left in NJ.

        Reply

        • Posted by Tough Love on September 30, 2015 at 2:16 pm

          While many do live into their 90s (and others dies in their 50s, 60s, and 70s), the “life expectancy” of retiring Public Sector workers is in the mid-low 80s.

          Reply

          • Posted by Tough Love on September 30, 2015 at 2:19 pm

            Which brings up an interesting follow-up ………..

            John,

            Are NJ’s retirement options (100% J&S pension, 50% J&S pension, etc..) “priced” at the true actuarial cost of such options or are these too given away at below-cost ?

          • Can’t find the assumptions for actuarial equivalencies in the latest PERS handbook:
            http://www.state.nj.us/treasury/pensions/pdf/handbook/persbook.pdf

            but that Optional Settlements section has another feature never found in private plans:

            If your designated beneficiary dies before you, your monthly allowance will not be increased nor can you name a new beneficiary. Your age and the age of the beneficiary determine your monthly allowance — the younger the beneficiary, the more your pension is reduced to account for the longer life expectancy of the beneficiary. Should you and your beneficiary die before all your accumulat- ed pension contributions plus interest have been distributed in the form of a monthly allowance, the remainder will be paid to your estate.

          • Posted by Anonymous on September 30, 2015 at 3:01 pm

            TL the reduction are based on life expectancy actuarial tables. Guessing they’re dictated by IRS but I’m not sure.

          • Posted by Anonymous on September 30, 2015 at 3:25 pm

            I don’t know the statistical population but current workers with 20+ years as of the 2011 reforms are now in the 25 years of service range. Point is any attempt to increase the penalty for “early retirement” will undoubtly result in a mass exodus. Thereby negating any potential “savings” and creating more of a negative pension fund cash outflow. Freezing the DBP stops future accruals but does nothing to address the above.

          • Posted by Tough Love on September 30, 2015 at 3:26 pm

            Anon,

            The IRS does NOT dictate such adjustments for Public Sector Plans…… that I know.

            And of course they are “based on” actuarial tables …… but I’ll bet $-to-donuts the pension reduction (form the single Life annuity amount) is nowhere near it’s true actuarial value.

          • Posted by S Moderation Douglas on September 30, 2015 at 8:17 pm

            How do actuaries keep from being eternally depressed?

            “This paper provides strong evidence, based on a large file of current and former workers, that mortality is negatively related to lifetime income. For black and white males and females the difference in age of death between low and high lifetime income is on the order of two to three years. Workers with positively-trended earnings over their work life may live an additional six to eighteen months. Income-related mortality differences between blacks and whites are largest at low-income levels, particularly for males, and narrow substantially at higher income levels. On the other hand, gender differences in mortality appear to be large and persistent across income levels.”

            (Mortality and Lifetime Income Evidence from Social Security Records* Duggan, Gillingham, and Greenlees)

            Two to three years mortality difference for lower income? Even more for black males?

            Tough Love knows where I’m going with this……

            Maybe,

            We should increase the accrual rate for low income workers.

            Got a problem with EQUAL?

          • Posted by Tough Love on September 30, 2015 at 9:05 pm

            S Moderation Douglas,

            Under YOUR logic we should we also allocate via Taxation the cost of prisons based on the racial make-up of the inmates.

        • Posted by S Moderation Douglas on September 30, 2015 at 6:48 pm

          “The average retirement age of members of the Teachers Pension and Annuity Fund is 61.6 years. The average retirement age of the state and local Public Retirement Pension System, the state’s biggest plan, is 62.5.”

          from “State Watch: New Jersey’s pension money pit”

          The Trentonian, : 02/02/14

          (Sorry, I’ve been touchy about links lately. Sometimes the post gets delayed to check them out.)

          Although while searching for average retirement age, I did see more than one article about a “rush to retirement” or “mass exodus” as anonymous calls it. Two rushes recently, each following major pension changes. That could account for many younger retirements.

          “May you (we) live in interesting times” 

          Reply

      • Military pay prior to Reagan’s buildup in the 80’s and Public Sector pay prior to 1962, when some dimwit allowed them to unionize, were both paltry thus rationalizing the respective generous but imbecilic pension schemes. But low pay has not been the situation in either case for many years. Unfortunately the bureaucrats and union bosses were able to dramatically increase pay rates while keeping the same insane retirement terms. Retire whenever you want, but NO PAYMENTS BEFORE AGE 65!!!!

        Reply

    • I am looking forward to “retiring” from my 32-year state job this January, at the ripe-old age of 54! Of course, I will still WANT to work SOMEWHERE ELSE. The fact that I will get free health insurance only makes my compensation at the next job les than it would have been. I am a member of ……Generation Greed!

      Reply

      • Posted by Anonymous on September 30, 2015 at 2:54 pm

        Yeah and a covert operator too???

        Reply

      • Posted by Anonymous on September 30, 2015 at 3:38 pm

        You and many other public’s & privates. We’re all getting it from somebody, somewhere – like our parents said it $ grow on trees!

        Reply

      • Posted by Tough Love on September 30, 2015 at 3:38 pm

        With NJ’s finances spiraling out of control, you may need that next job ……………..

        Your category ……… full/unreduced retirement at age 54, free retiree healthcare, 9.19% RETROACTIVE increase in your pension formula some years back, etc, etc., etc., just screams for Taxpayers to ultimately renege on a good portion of those grossly excessive, unnecessary, unjust, and unaffordable “promises” ….. BOUGHT form our self-serving Elected Officials by your Unions with campaign contributions and election support.

        Reply

      • Pat, most likely if you work somewhere else at enough hours per week to qualify for health benefits that job private or public will actually pay you more in way of stipend bc you will not require their health benefits. Of course, most private sector employers might think twice about hiring you but I’m sure you will find something.

        Reply

      • Pat I agree that you better find additional employment as I wouldn’t put all of your eggs in that one basket to hell called a NJ pension

        Reply

        • Pat, maybe you could get a job on Wall Street like you were considering before your state job. ……and yes you are greedy. Not only are you being overcompensated for no good reason but now you claim to you still want to work and most likely will take a job away from a college graduate with student loans. Yes you are greedy and if you still want to work then don’t “retire” Retirement means that you are ready to stop working.

          Reply

      • Posted by Anonymous on September 30, 2015 at 4:41 pm

        BTW bloggers, if you haven’t read between the lines on most of “pat on” comments, their playing the public’s – my opinion, decide for yourself.

        Reply

      • Posted by PatB on September 30, 2015 at 11:02 pm

        How about this plan: Find a comparable private sector job with a good 401k match, then retire from your public job. Live off the new job and save your entire pension check in the 401k and any other retirement savings plans that are available. Then really retire in 5-10 years with a much more secure nest egg.

        Reply

        • Posted by Tough Love on September 30, 2015 at 11:16 pm

          PatB, Unless you’re on a Disability retirement (under which all or a portion is Tax-free), it doesn’t work like that. Your entire pension payout is taxable income in the year paid, as well as any salary from a new job.

          Reply

        • Posted by MJ on October 2, 2015 at 8:09 am

          What a moron. I would ask for a refund on the supposed college.

          Reply

          • Posted by Anonymous on October 2, 2015 at 8:39 am

            “Private sector adjusted”, yeah on the middle and lower levels to pay for little or no change on the upper level. Really when it comes down to it the majority of us are being scammed by the minority – 1% litmus test!

          • Posted by Anonymous on October 2, 2015 at 8:40 am

            Absolutely, from that PRIVATE institution!!!

  11. Would we even notice a “mass exodus” of state workers? Please, just retire its not like you do all that much anyway,

    Reply

    • Posted by Anonymous on September 30, 2015 at 4:30 pm

      I know private sector darlings, PLEASE. Like I said we ALL get it from somewhere, this free market excuse is applicable to all you wine & cheese privates who CHOOSE to live in NJ!!!

      Reply

    • Posted by Anonymous on September 30, 2015 at 4:39 pm

      Your comment is typical of the “we’re better than” public’s attitude that most ignornat private’s possess. Irrelevant to the substantive point I made regarding the economic effect on the timing of future changes. But hey your from the private sector, all knowing, never wrong, and definitely full of it!!!

      Reply

      • Not all knowing, and sometimes wrong but yes way smarter, better educated and more realistic than most publics who have lived in a bubble for the last 20-30 years. I am well off but I have gotten it through actually producing something, providing employment, good compensation and skills to my employees and c0-workers not taking it from someone else who only sucks out of a community for no good reason. I have planned better financially so I couldn’t give a rat’s ass about your pensions or NJ for that matter. Not here anymore but can sympathize with family and friends who are still stuck for whatever reasons. I can also sympathize with my friends in the public sector who are hoping and praying that the pension scheme pays off as they have not planned very well and the chickens are coming home to roost. I am well versed in economics and finance although nothing more than an 8th grade education and basic comprehension skills could see where this mess is headed. Keep holding onto the dream darling and I hope it all works out although I would highly recommend employment after your retirement if anyone will have you as this pension mess is going to hell in a hand basket and there isn’t anything any of us can do about it. There is no honor among thieves and all yes all NJ politician are liars, thieves and immoral human beings. Nuff said

        Reply

        • Posted by Anonymous on September 30, 2015 at 6:57 pm

          OK live large in your bubble island. Guess you manufactured money to get yours, didn’t get it somehow, someway, from someone or somewhere else?

          Reply

          • Posted by Tough Love on September 30, 2015 at 8:26 pm

            Yes, perhaps by manufacturing or selling products or service that customers (who can choose to shop ELSEWHERE …. so your prices must be fair and reasonable …. which means NOT unnecessarily overcompensating your employees) freely choose to buy.

            Hardly the wayit works in the PUBLIC Sector…. with ZERO competition and forced taxation to pay MORE than the service are worth (or would cost if done by the Private Sector).

          • Posted by Anonymous on September 30, 2015 at 8:33 pm

            Zero competition? Are you under house arrest where you reside? Sure it’s different but it’s the same to, got a problem with free market when it comes to your choice of residency.

          • Posted by Tough Love on September 30, 2015 at 9:24 pm

            Anon, The benefits of “Choice of Residency” should be the focus of the States/Cities (not burdened by grossly excessive employee compensation) via marketing campaigns to attract PRODUCTIVE residents.

            Of course it is already evident. Detroit witnessed a huge decades-long outflow of PRODUCTIVE tax-paying citizenry as it’s expenses (think Public Sector pay, pensions, and benefits) vs revenue spiraled out-of-balance dropping service levels into the toilet. Heck, even their street lights were turned off.

            Until NJ’s Public Sector Union bought-off elected officials wake-up, NJ has ZERO chance of fixing this mess w/o erecting border-fences to prevent the productive from leaving. We’re ALREADY beyond the point of productive Companies choosing to move IN.

            And why …. just so the unjustly enriched…. Public Sector workers …. can keep their ill-gotten gains, even for FUTURE service not yet worked ?

          • Posted by Anonymous on September 30, 2015 at 9:38 pm

            Your slanted view of private v public is evident. Next time the financial sector is going to collapse the PRIVATE sector better fix it without public sector involvement including taxpayer dollars. What a bigot, always with the convenient exceptions.

          • Posted by Tough Love on September 30, 2015 at 9:44 pm

            Anon, In case you’re not paying attention, the US Treasury made back MORE than it gave out to Private Companies in the Great recession.

            When it comes to Public Sector worker compensation, the Taxpayers ALWAYS lose.

          • Posted by Anonymous on September 30, 2015 at 10:13 pm

            Your so full of it and yourself. Made back more? I didn’t see any private sector entities stepping up to bail themselves out. Guess that would be called a hostile takeover. Taxpayers lost big in lost wealth including pension funds public and private. EXCUSES!!!

          • Posted by Tough Love on September 30, 2015 at 11:05 pm

            “!!!” …. ok, like BH is back….. so sad, thought you left for good?

    • Posted by Anonymous on October 2, 2015 at 11:25 am

      Evidently not you as you claim to not residing in NJ?

      Reply

  12. Posted by S Moderation Douglas on October 1, 2015 at 12:03 am

    I listened to the video, but without transcripts I might have missed something. Is his main argument that the use of higher discount rates, instead of risk free, resulting in insufficient ARCs?

    Or is there more. I know increased mortality rates have an effect, but what else is he implying?

    Reply

    • Posted by Tough Love on October 1, 2015 at 2:36 am

      It’s EVERY aspect of the valuation process (all assumptions and methodology). Everything is geared to minimize the Plan liability, the Normal Cost, and the Amount applied towards amortizing any underfunded liability.

      And of course the actuary’s deafening silence when he/she KNOWS that Statues or Regulations dictating assumptions/methodology are unreasonable.

      Reply

  13. Posted by Anonymous on October 1, 2015 at 8:44 am

    Let’s lay it out there, P&B Commission reforms adopted as proposed. How do the numbers shake out? What are the State and Local ARC to fund the accrued liability? I know, because of the dynamics, it’s a moving target, best guesstimate at a point in time . What revenue stream(s) are required to fund the ARC going forward?

    Reply

    • Posted by pat on October 1, 2015 at 10:32 am

      1. Raise the Gas tax – 25% of the increase will go to shore up the pension deficit, the remaining to FINALLY firm up the transportation trust fund and fix our roads/bridges. The tax is the lowest in the nation and artificially so.

      2. “smooth” the ARC over a greater number of years, perhaps 40

      3. Means-test SS entitlements and eliminate the CAP on the tax

      4. Health insurance/benefits should be taxable at a low rate

      5. Repatriate off-shore corporate “deferred income”

      6. Sell our own oil to the rest of the world

      7. Eliminate tax loopholes that allow hedge-funds managers to pay marginal tax rates

      8. Increase the capitol gains tax to 50%! (in the ’70s it was closer to 70%)!

      9.

      Reply

      • Posted by Tough Love on October 1, 2015 at 10:39 am

        I see LOTS of revenue (i.e tax) increase proposals, but where are the VERY justified pension & benefit reductions ….. from their current grossly excessive level (under ANY reasonable comparison to the typical pensions of similarly situated Private Sector workers) ?

        Reply

      • Posted by MJ on October 3, 2015 at 9:54 pm

        The gas tax will go towards paying off the bond debt and interest and NOT into the pensions

        Reply

    • Posted by Tough Love on October 1, 2015 at 10:35 am

      Since all current DB Plans would be frozen (zero growth from additional salary or service credits) under the P&G proposal, the Normal Cost would be zero and the ARC would simply be amortization of the (huge) unfunded liability (over 20, or 30 ? years). That alone is a big nut, ESPECIALLY because the P&B proposal calls for shifting the responsibility for the Teachers’ pension Plan to the Localities (along with their retiree healthcare subsidy), now BOTH a “State” responsibility.

      The P&B proposal calls for getting a large share of the money needed to amortize the ARC via reduction in employer healthcare subsidies to actives and retirees. I see this as the biggest “problem” with the Plan …… from the Taxpayers’ point of view (obviously many workers/retirees who still think that they might get all that was “promised” w/o such givebacks, hate it).

      In my opinion, there is WAY to much “risk” to taxpayer without an ironclad “guarantee” (in the from of an AUTOMATIC reversion to a “STATE” responsibility) if the savings from the healthcare reductions (in each and EVERY YEAR going forward) is inadequate to meet the share of lowered ARC requirements initially assumed in the proposal.

      Reply

      • Posted by Anonymous on October 1, 2015 at 3:23 pm

        The constitutional amendment needs to address the potential health care savings shortfalls. Specifically, the potential liability reversion to the State and the applicable dedicated funding mechanism.

        Reply

        • Posted by Tough Love on October 1, 2015 at 6:06 pm

          Personally, with Gov Christie’s term ending in a few years and a Democratic Legislature, I seriously doubt there will be ANY material givebacks offered by the Unions that will end the funding stalemate.

          Unfortunately, (unlike in Corporations, where those in leadership position are actually held accountable), we (meaning NJ) will have to hit rock bottom …. including zero money in the Public Sector pension Plans …… before something is actually done.

          And if the worker/retirees think that that “something” will be an ADDITIONAL $8-$10 billion in State/Local taxes to CONTINUE paying the pensions and benefits of those ALREADY retied (let alone those of “actives” not yet retired”) on a pay-as-you-go-basis ………… I’ve got a bridge to sell you.

          Reply

          • Posted by Anonymous on October 1, 2015 at 6:19 pm

            So it sounds like we’re (NJ) heading for our own “911” and “Great Recession” (Depression ?). The plane (NJ) is on it’s downward spiral, the pilot and copilot (both political parties) are unwilling or unable to take control. Let’s roll!

          • Posted by Tough Love on October 1, 2015 at 7:14 pm

            Anon,

            Sure looks that way ….and the BIGGEST losers with be the Public Sector workers.

            They should string-up their Union Executives (whose own “UNION” pensions are likely fully funded)

          • Posted by Anonymous on October 1, 2015 at 7:34 pm

            True and with significant collateral damage! See you on the dark side of the moon 🙂

  14. Posted by MJ on October 2, 2015 at 8:16 am

    For those commenting on the next financial collapse, please make note that when the 2008 recession/financial collapse hit, the private sector adjusted. Yes, people were hurt some more than others but the system adjusted and allowed for the “new normal” The public sector was full steam ahead except for the minor changes in 2011. One would have thought publics were asked to give their first born in exchange for paying something towards their healthcare and pensions. No honor among thieves and all politicians and union bossess are immoral, clueless and desperate thieves. Not sure what it would take to get things on a solid financial track.

    Reply

    • Posted by Anonymous on October 2, 2015 at 8:36 am

      “Private sector adjusted”, yeah on the middle and lower levels to pay for little or no change on the upper level. Really when it comes down to it the majority of us are being scammed by the minority – 1% litmus test!

      Reply

      • Posted by Tough Love on October 2, 2015 at 10:31 am

        So THAT’s your justification for Middle Class PUBLIC Sector workers to rip-off Middle Class PRIVATE Sector workers ?

        Reply

        • Posted by Anonymous on October 2, 2015 at 11:17 am

          Not at all, just giving another perspective of other inequities that exsist which you privates seem to diminish or ignore.

          Reply

          • Posted by Tough Love on October 2, 2015 at 11:33 am

            Good, So when is NJ’s PUBLIC Sector going to STOP digging the financial hole we are in even deeper …. the ripping-off it’s Middle Class PRIVATE Sector by either freezing or VERY materially reducing the grossly excessive, unnecessary, unjust, unfair (to taxpayers), and unaffordable PUBLIC Sector pensions & benefits ….. for the future service of all CURRENT workers?

          • Posted by S Moderation Douglas on October 2, 2015 at 12:17 pm

            ” either freezing or VERY materially reducing the grossly excessive, unnecessary, unjust, unfair (to taxpayers), and unaffordable PUBLIC Sector pensions & benefits ….. for the future service of all CURRENT workers?”

            You mean “rebalancing”, right? Reduce for some, increase for others.

            Ironic, when a low level worker is “overcompensated” by 19%, that’s $10,000. ……..EGREGIOUS !!

            When a PhD is “undercompensated” by 19%, that’s $32,000 a year. (Meh; probably not a “real” PhD anyway.)

            One might wonder if there is enough overcompensation to correct all that undercompensation?

            Taking from the poor to give to the less poor can be a very complicated undertaking.

          • Posted by S Moderation Douglas on October 2, 2015 at 12:35 pm

            Just for a little global perspective, the UK could maybe use some “rebalancing” also:

            Public sector administrative worker makes 8% MORE than private sector. ( £19,460 vs. £17,859 )

            Private sector CEO (12,000 employees) makes 63% more than public sector CEO (15,000 employees). £750,000 vs. £275,000

            They SERIOUSLY need to cut the pay of that administrative worker. It’s grossly excessive, unnecessary, unjust, unfair (to taxpayers), and unaffordable.

          • Posted by Anonymous on October 2, 2015 at 1:11 pm

            TL short answer, same time ALL levels (primarily 1%) do.

            SMD do you think the TL’s of this blog give a hoot about what’s going on in Europe and other developed nations? Total tax structure in US is LESS than most. These right wing conservatives Tea Party just want to squash ALL others economic existence and continue their eggrious wealth accumulation.

            They unjustly rationalize this situation as they do their opposition to gun control. Sad thing is, they’ve brainwashed a mainstream minority into believing this CRAP!

          • Posted by Tough Love on October 2, 2015 at 5:35 pm

            No S Moderation Douglas, I don’t mean “re-balancing” of pension & benefits.

            Pensions & benefits (as “deferred compensation”) are TOO EASILY under-priced/under-valued screwing taxpayers. Public Sector pensions & benefits should END as Defined Benefit (DB) Plans and be replaced with Defined Contribution (DC- 401Kstyle) Plans near-universal in the Private Sector because they can’t be “gamed” (screwing the taxpayers). What you promise today, you must pay for TODAY, hence you can’t promise more than you can TRULY afford.

            Along with PUBLIC Sector DC retirement Plans EQUAL TO (meaning typically 3%-4% of pay and no more) those of their Private Sector counterparts,Public Sector “Cash Pay” should be adjusted up or down to a level comparable to Private Sector workers.

          • Posted by S Moderation Douglas on October 2, 2015 at 5:53 pm

            Not everyone agrees with you:

            Ed Ring:

            “But there is no reason that pension plans cannot be reformed to address their fiscal burden while still remaining defined-benefit. In fact, to do so only two pieces of past legislation need to be addressed.”

            (SB400 and Prop 21, 1984)
            ___________________

            Andrew Biggs:

            ” Once you count both sides of the equation, the economic costs of supporting CalPERS are just about equal to the economic benefits of the checks CalPERS writes to retirees. It’s a wash.
            That’s not to say that CalPERS is a bad program or that public employees shouldn’t have a retirement plan. It’s just to say that CalPERS isn’t exempt from basic economic principles.”

    • Posted by Anonymous on October 2, 2015 at 8:52 am

      MJ you definitely sound like one of the PRIVATE sector’s best and brightest – LOL!!! Guess you were educated by public’s all the way – LOL!!! Hey it’s ashamed you felt forced out of NJ and harbor such resentment!!! Well you can always come back and buy TL’s McMansion at a discount – LOL!!!

      Reply

      • Posted by MJ on October 2, 2015 at 7:22 pm

        I wasn’t forced out I left voluntarily bc a public moran bought our house for full asking price along with the insane taxes. Priceless to be sure. We still laugh about it 🙂

        Reply

    • Posted by S Moderation Douglas on October 2, 2015 at 1:12 pm

      I don’t know what the public sector did in New Jersey, but in California, state workers were furloughed three days a month (15% reduction in pay). No COLAs for over 5 years, increased employee costs for healthcare. They adjusted.

      Schizophrenic Arnold Governor Schwarzenegger, at the same time, was INCREASING the number of employees, then going on TV with charts saying state employees were not “sharing” the pain of unemployment(??) Meanwhile, state workers are losing their homes and cars, businesses in Sacramento were hardest hit. Several downtown restaurants went out of business. Many more of the lowest level state workers became eligible for one or more public assistance programs. (Some were already on food stamps or housing assistance. ) They adjusted.

      It might seem idiotic of The Arnold to increase the number of employees while at the same time cutting back hours; I don’t think he actually realized it was happening until the media sussed it out and headlined it. Then, of course, he over – reacted and re postured his bad self.

      For a while there, though, there were quite a few newly unemployed private sector workers who were happy to “adjust” by taking jobs in the public-sector.

      Sometimes, it’s hard to tell a private sector worker from a public sector worker. They both just look like people trying to get by.

      We have met the enemy and he is us.

      Reply

      • Posted by Anonymous on October 2, 2015 at 1:40 pm

        SMD at the State level we had salary freeze, furlough, and at the time an ~1% increase in employee’s pension contribution rate. Active’s didn’t start premium share until the 2011 reforms and retiree’s future COLA was eliminated.

        Whatever happened at the Local level would vary by municipality.

        Reply

      • Posted by Tough Love on October 2, 2015 at 5:45 pm

        Got to love the word “furlough”……

        In the Private sector when things get tough for their employers, workers take pay CUTS and work the SAME hours but for less pay ….. and are tickled pink to still have that job.

        In the Public sector when things get tough for their employers, the workers get “furloughed”. Yeah, they get also get less pay …. but for LESS hours workers.

        The enemy is our self-serving, taxpayer-betraying Elected Officials, in cahoots with the Public Sector Unions/workers who BUY their favorable votes on Public Sector pay, pensions, and benefits with campaign contributions and election support..

        Reply

        • Posted by Anonymous on October 2, 2015 at 6:09 pm

          Ah yes but let’s not forget the flip side when things are chugging along and all is rosy. No complaints from the privates then because they’re getting theirs multiple than the public’s.

          Reply

          • Posted by Tough Love on October 2, 2015 at 6:15 pm

            The Public Sector workers get MORE (far MORE) in both good AND bad times.

            But the end of that scenario in NJ, Chicago, and lots of other places is VERY near. Your pensions & benefits are “toast”.

          • Posted by S Moderation Douglas on October 2, 2015 at 6:28 pm

            Actually, many cities, including the one I live in, did just that. Same hours, lower pay.

            My son in law works for private sector and didn’t get an hourly pay “cut”, but since demand was down, for about a year they cut back to a four day week. Twenty percent less take home pay. (With the cut back, he was still netting more per month than my full-time pay.)

            My neighbor got cut back also. 100% no more job. My wife, luckily, was unaffected. She had been working 9 hour days, plus periodic weekend OT, before, during, and after the recession. She never planned this good fortune, just happened to luck into a recession proof business.

            Some public sector workers lost their homes because their private sector spouses lost their jobs. A lot of people got hurt. A lot of private sector workers saved their bacon by BECOMING public sector workers.

            But, hey, why not just divide the whole country into black and white? Private sector good; public sector bad.

            Caedite eos. Novit enim Dominus qui sunt eius.

            Your phobia of “taxpayer-betraying Elected Officials and Public Sector Unions/workers” is unnatural and unhealthy. Cancerous, perhaps.

          • Posted by Anonymous on October 2, 2015 at 7:09 pm

            TL kind and caring person (used losely) can I have some butter on my toast!

          • Posted by S Moderation Douglas on October 2, 2015 at 7:26 pm

            LOL!!

          • Posted by Tough Love on October 2, 2015 at 9:03 pm

            From “The Stone Lion” by William Eisner ……..
            ———————————————————-

            “I’ve just come from a meeting with the Union” Breal said to Lowell.
            “Parasites” Lowell said, staring at the papers on his desk. “What they come down to is a mindless litany of more, more, and more again”

          • Posted by Anonymous on October 2, 2015 at 10:13 pm

            Oh TL they shouldn’t speak ill of the 1% like that, it hurts!

          • Posted by Anonymous on October 3, 2015 at 9:48 am

            Cancerous w/o a doubt, what a double life TL lives regarding their personal disdain for publics and putting on a false face for clients. Tough love indeed!

  15. Posted by Anonymous on October 2, 2015 at 1:40 pm

    Hurricane Joaquin to miss New Jersey. Lost opportunity for Christie to cry and act Presidential. Tender Loving will have to make up for loss in wind power. GO TL.

    Reply

  16. Posted by Anonymous on October 2, 2015 at 4:48 pm

    I guess the fleece goes back in the tote.

    Reply

    • Posted by Anonymous on October 2, 2015 at 4:55 pm

      Yup and no photo ops with his pal Obama! Mitt would have loved to see that, again.

      Reply

    • Posted by Anonymous on October 2, 2015 at 5:43 pm

      You mean the one he auctioned off on EBay to raise $? I bought it for $1.99, free S&H! Can’t give it away on Craigslist, dog won’t even sleep on it, just uses it to go potty. Oh well at least it’s good for something.

      Reply

  17. Posted by Jim Pryor on October 6, 2015 at 7:50 am

    John, are you a part of any “screaming actuaries” groups? Are there such things? I recently sat through three finalist presentations as a citizen trustee for a municipal plan and it seemed like there were a dozen different actuary groups that these pension actuaries were in. Do any of them represent the ideas that Dr. Gold laid out of pushing for standards demanding more and explicitly considering role of serving the public?

    I’m asking because I think that asking finalist candidates and the like whether they are a member of these groups would be a good practice as a fiduciary who is focused on my long-term responsibility to the fund. Or even to get them to put an answer in their response to the RFP to just get them to official state their stance.

    And one more question – do you think it would be reasonable to make as a part of an RFP and then contract that they need to also publish the “disclosure of accrued benefits discounted by the Treasury yield curve – & the associated annual cost” that Dr. Gold mentions on slide 34? I think these are the “North/Rauh/Pepta numbers” that he mentioned, but I’m really not clear enough what these are to demand them. Does Dr. Gold publish a best practice valuation report showing what this would be?

    Reply

    • Posted by Tough Love on October 6, 2015 at 11:55 am

      Asking for additional valuations which uses a discount rate 2% less and 4% less than the Plans “official” rate (which has been the assumed return on Plan assets) would accomplish your desired goal.

      And considering everything is computerized, doing so should take about just a few minutes ………. so let them know you do not expect to pay extra for such.

      Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: