What Connecticut Needs To Know – SERS

All public pension valuations severely understate liability values and contribution ‘requirements’ to cater to the government/client’s whims so when reviewing the actuarial reports for the Connecticut State Employees Retirement System (SERS) you have to ignore most of the numbers and concentrate on deposits and payouts to tell you the real story:

CTSERS
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Back in 2000 the SERS reported having $8 billion in assets and there has always been a substantial net outflow (averaging about $300 million) annually.  You would expect assets to be close to depletion by now but as of  6/30/14  the SERS claims to have over $10.5 billion in assets due to exceptional investment earnings.

Without changes to the nature of the plan you can expect benefit payouts and participant deposits to be steady over the years so, projecting forward, the SERS could still avoid bankruptcy assuming:

  1. continued miraculous investment growth, and
  2. Connecticut coming up with over 3.5 times more in deposits annually in 2027 than they are putting in now.

Neither appear likely.

19 responses to this post.

  1. Posted by Anonymous on November 17, 2015 at 11:03 am

    Participant’s deposits are woefully inadequate. It would seem obvious the % paid by participants NEEDS to be raised.

    Reply

  2. Posted by George on November 19, 2015 at 8:27 am

    http://www.backgrounderpod.com/#!Episode-37-James-Florio/c23l/56375c3c0cf2c322b49015e0

    Jim Florio was the last governor to fully fund the pension plan.

    Episode 37: James Florio

    After a huge anti-tax campaign against Governor Jim Florio, New Jersey became Florio free in ’93 as he was denied a second term. More than 20 years after Florio left office, has New Jersey been in any better shape since ’93? One problem New Jersey didn’t have before then was the pension crisis. Jim Florio was the last governor to fully fund the plan. He also paid down a huge state budget deficit and spearhead an assault weapons ban bill in New Jersey. In this episode, Jim Florio talks about his days breaking from Camden County Democratic boss Angelo Errichetti, what it took for him – a southern New Jersey Democrat – to win a statewide election, and how he came to be the father of the Superfund site while serving in the U.S. House of Representatives. This episode is sponsored by the Pollack Financial Group.
    CLICK HERE to immediately listen to Episode 37 featuring James Florio.

    Reply

    • Posted by Anonymous on November 19, 2015 at 9:27 am

      Nice try George but unfortunately it doesn’t mesh with TL’s version of and vision for reality……..

      Reply

      • Posted by Tough Love on November 19, 2015 at 1:06 pm

        Reality is that the ROOT CAUSE of NJ’s mention mess is it’s grossly excessive (by any reasonable metric) Public Sector pension & benefit promises. …… ALWAYS multiples greater in value at retirement than those of comparable Private Sector workers when retiring a the SAME age, with the SAME pay, and the SAME years of service.

        They need to be frozen for the future service of all CURRENT workers …. as recommended by the NJ pension commission.

        Reply

  3. Posted by The Resident Greedy Nutcase on November 19, 2015 at 1:49 pm

    Quote,” TL…….Blah blah blah, blah blah blah blah blah, blah……
    Copy paste, copy copy copy…paste.

    Reply

  4. Posted by The Resident Greedy Nutcase on November 19, 2015 at 1:55 pm

    The states FAILURE to fully FUND the pension system over “decades”, has caused this problem of unsustainability. That is the Root cause of the problem!!
    Meanwhile corporate tax subsidies and tax payer tax breaks, given on the backs of the public workers, has enabled the pensions to become overburdened!!!
    Time for every tax payer to pay back the money that was stolen from the public sector pension funds!! Time for our elected officials to be brought to justice for the systematic brutalizations of the public sector workers and their livelihoods, all while making themselves and their friends rich!

    Reply

    • Posted by Tough Love on November 19, 2015 at 3:27 pm

      Quoting ….

      “The states FAILURE to fully FUND the pension system over “decades”, has caused this problem of unsustainability. That is the Root cause of the problem!!”

      Wrong. “Funding” requirements are A FUNCTION OF (and in direct proportion to) the “generosity” of the pension Plans. Extremely generous promises will be VERY costly, and hence VERY difficult to fully fund.

      NJ’s Lack of full funding is not the CAUSE of the pension mess we are in, but rather the CONSEQUENCE of the real ROOT CAUSE …. grossly excessive pension “generosity”.
      ______________________

      The ease of which your “logic” (“just fund the Plans”) fall flat is easily seen by example.
      If NJ’s current Plans were 2x, 5x, even 10x MORE generous than they are right now, your answer would STILL be the SAME ….. just fund the Plans .

      How absurd.

      ———————————————-

      The only thing we agree on is …… “Time for our elected officials to be brought to justice”

      But NOT for ….”the systematic brutalizations of the public sector workers and their livelihoods” ….. but because they traded their favorable votes on Public Sector pay, pensions, and benefits in exchange for Public Sector Union Campaign contributions and election support.

      Prosecution on bribery and racketeering is clearly warranted.

      Reply

  5. […] the time, after reviewing the situation with the SERS and TRS plans, I dismissed the report as a cynical disregard of reality to pander to political […]

    Reply

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