Screaming Actuaries

In response to a comment/question in a prior blog:

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?

which referenced this comment/question from Jeremy Gold:
.

.
and raised two seminal points worth exploring:

Where are the screaming actuarial groups?

Often advocating for your members means pushing policies that make them more money.  If concepts like new comparability allocations or watered-down funding requirements through MAP-21 and HATFA in the private sector and staying silent in the public sector make life easier (and more lucrative) for your members then you are bucking the majority by ignoring their economic realities.  There is the odd American Academy of Actuaries paper (Pension Funding 80% Myth) but I daresay not paying your AAA dues would still get you kicked out quicker than propagating this myth. What an actuarial group needs to scream about is outing amateurs with vested interests manipulating their profession.

Where are the screaming actuaries?

Not doing public plans as explained in two quotes.  From Upton Sinclair:

It is difficult to get a man to understand something when his salary depends upon his not understanding it.

and Anonymous:

He who pays the piper calls the tune.

 

29 responses to this post.

  1. Posted by Anonymous on October 6, 2015 at 4:15 pm

    Sorry I’m being distracted by the sound of my cuckoo cuckoo clock, for a moment I almost thought it was TL – LOL!!!

    Hey TL and minions keep up the good but wrong fight against the middle class. Because I guarantee you the vast majority of public’s are not in your 1%. Your deception and misdirection will take you only so far.

    Reply

    • Posted by Tough Love on October 6, 2015 at 5:11 pm

      No, the fight is against the insatiably greed PUBLIC Sector Middle Class … who (as you do in virtually every post) try to justify their financial “mugging” of the PRIVATE Sector Middle Class by pointing to the Corporate1% who rip ALL of us…… a red herring.

      The Public Sector Middle Class deserves EQUAL, but no more (in comparable jobs, or if not directly comparable, jobs with comparable risks and similar education, experience, and skills requirements) in “Total Compensation” (cash pay + pensions + benefits) than their Private Sector counterparts. And ESPECIALLY in NJ with near equal Public/Private Sector “cash pay”, there is ZERO justification for ANY (yes ANY) greater PUBLIC Sector pensions or better benefits ……. now ALWAYS multiples greater in value at retirement.

      Reply

      • Posted by Anonymous on October 6, 2015 at 5:29 pm

        Stop misleading the readers that you represent or even care about a class of society you don’t belong to, 1% capitalistic pigs with ridiculous wealth accumulation in real numbers and as a percent of the middle class and those less fortunate!!!

        Reply

  2. Posted by Geronimo on October 7, 2015 at 9:28 am

    >TL I admire your passion but I wonder sometimes… What in life is “fair and equal”? Why should that golden rule apply to everyone in YOUR world when it DOES NOT apply every where else? Is it FAIR that some people are born into poverty or slavery? Is it fair that some people receive great wealth from their heirs and are given a head start in life? Is it fair when out of all the highway speeders that day the police stop YOUR CAR? Nothing is fair and equal! Why should we now accept that premise when the rest of the world is so UNFAIR AND NOT EQUAL?

    The truth of the matter is you get what you can get away with! You only have 1 life and its up to you to make the most of it. Now, give me my pension for life and take it! I will vote for a tax hike to be sure…

    Reply

    • Posted by Tough Love on October 7, 2015 at 1:28 pm

      Geronimo,

      Perhaps I should be clearer …..

      I bring up the “fair and equal” because of the payer involved. When a Corporate CEO is paid absurd amounts of money, that money comes from those who have a CHOICE to be financially associated with that company, either as an investor (via holding the stock or bonds) or as a customer buying their products. That CHOICE provides the money to pay the CEO’s salary. Pay too much or charge too much and your investors & customers will spend their money elsewhere.

      It’s different in the Public Sector. Those (the Taxpayers) who pay the wages, the benefits, and the pensions of Gov’t workers rarely have alternative CHOICES to obtain service elsewhere (e.g., police, fire, DPW, etc.), and where they do have options (i.e. Private Schools), they pay for the Public Sector Teachers compensation ON TOP OF the Private School costs.

      A structure with no CHOICE demands a high degree of fairness to those forced to pay (via forced taxation). And it’s a logical step that such “fairness” means that worker compensation should be near “equal” to what comparable jobs would pay in the Private Sector (where 85% of all workers are employed, and employers freely compete for talent).

      Reply

      • Posted by Anonymous on October 7, 2015 at 2:10 pm

        EXACTLY

        Reply

      • Posted by Anonymous on October 7, 2015 at 2:10 pm

        TL MOVE (possibly Walker country, WI), it’s called free choice in the public sector JUST like the PRIVATE sector – or do you change the rules to suit your situation. Hey I’d love to drive a Benz but can’t afford it, that’s not fair they should sell it to me for less!

        Reply

      • Posted by Anonymous on October 7, 2015 at 2:52 pm

        So private sector free market choice doesn’t apply to the public sector. How “for the rich” is that!

        Reply

      • Posted by Anonymous on October 7, 2015 at 3:42 pm

        Tough Love:

        “When a Corporate CEO is paid absurd amounts of money, that money comes from those who have a CHOICE to be financially associated with that company, either as an investor (via holding the stock or bonds) or as a customer buying their products.”

        Only in your idyllic dreams.

        Phebe Novakovic General Dynamics $18.8 million
        Marillyn Hewson Lockheed Martin $15.7 million

        That right there is your tax dollars at work. And mine.

        Whether you like it or not.

        Reply

  3. Posted by dentss dunnigan on October 7, 2015 at 2:49 pm

    coming soon to a state or town of your choice ..Large pension fund files plan to cut retiree benefits under new law….http://www.washingtonpost.com/business/economy/large-pension-fund-files-plan-to-cut-retiree-benefits-under-new-law/2015/10/06/4bc1b5c2-6c40-11e5-9bfe-e59f5e244f92_story.html

    Reply

    • Posted by Anonymous on October 7, 2015 at 2:51 pm

      Interesting but not EXACTLY!

      Reply

    • Posted by Tough Love on October 7, 2015 at 3:43 pm

      dentss,

      That applies only to Private Sector Multi-employer Plans …. but may be a bad omen for Single-employer Private Sector Pans if the PBGC goes belly-up and Congress won’t bail it out.

      PUBLIC Sector Plans are a whole different animal, with legal protections making pensions reductions even for FUTURE Service (passed of course by Gov’t workers/officials who participate in these plans) FAR FAR stronger than those afforded Private Sector workers. Crisis will have to arrive before they wake up to the FACT that they won’t be getting anywhere near all that has been “promised” in pensions & benefits.

      Reply

      • Posted by Anonymous on October 7, 2015 at 4:50 pm

        I don’t understand why those most impacted by this situation aren’t pushing for the necessary changes sooner rather than later? Heck with political and union BS, this is about people’s futures!

        Reply

        • Posted by dentss dunnigan on October 7, 2015 at 5:34 pm

          Most retirees or soon to retire believe their “crock of gold” is locked in so they don’t want to poke the hornets nest …but people 10 years or more especially the newly hired don’t have a clue they are funding the outgoing checks now ,when they realize they won’t get anything near what older retirees are getting or already have ……you just might see a lot more disgruntled workers directing their anger where it belongs at those raiding the pot now .

          Reply

      • Posted by Anonymous on October 7, 2015 at 5:09 pm

        Once again politics is hurting ALL of us, D’s know P&B reforms ate inevitable but don’t want to cowtail to R’s. Christie cares more about his POTUS run ( stop laughing) then he does about NJ – stalemate. Putting this off will hurt ALL of us, certainly some more than others.

        Reply

  4. Posted by Anonymous on October 7, 2015 at 5:39 pm

    http://www.nj.com/opinion/index.ssf/2015/08/a_reform_plan_to_solve_teachers_pension_problem_on.html

    Old news, falls short of P&B Commission BUT might be a compromise that’s better than doing nothing? This is a Republican proposal that the Democrats should take seriously. Christie is in the doghouse and the Republicans would override him if vetoed.

    Time for action, don’t miss the moment!

    Reply

  5. Posted by Anonymous on October 7, 2015 at 9:07 pm

    John, why doesn’t the Governor unilaterally impose gold health benefits upon members (active and retired) similar to the Administration’s position on no increments?

    Of course this would initially apply to “State” workers and would be rolled out to “Locals” upon their respective contract terminations.

    Reply

    • Posted by Tough Love on October 7, 2015 at 9:15 pm

      NJ’s State Legislators (not the Governor) would have to do it, and being BOUGHT-OFF with Public Sector Unions’ campaign contributions and election support, THAT’S not likely …. UNTIL the crisis arrives (WHEN, not IF).

      Reply

    • If you mean the titular governor I don’t believe he has anything on his plate right now for New Jersey.

      Reply

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