Archive for the ‘Public Pensions – General’ Category

Chicago Police Pension: Bungle not Bungie


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“Ok, I don’t like to gear my material to the audience but I’d like to make an exception because I was told that there is a convention of plumbers in San Francisco this week – I understand about 30 of them came down to the show tonight – so before I came out I worked-up a joke especially for the plumbers. Those of you who aren’t plumbers probably won’t get this and won’t think it’s funny, but I think those of you who are plumbers will really enjoy this…

“This lawn supervisor was out on a sprinkler maintenance job and he started working on a Findlay sprinkler head with a Langstrom 7″ gangly wrench. Just then, this little apprentice leaned over and said, “You can’t work on a Findlay sprinkler head with a Langstrom 7″ wrench.” Well this infuriated the supervisor, so he went and got Volume 14 of the Kinsley manual, and he reads to him and says, “The Langstrom 7″ wrench can be used with the Findlay sprocket.” Just then, the little apprentice leaned over and said, “It says sprocket not socket!”

“Were these plumbers supposed to be here this show…?”

Though not as funny as the joke in the actuarial report for the Chicago Police Annuity and Benefit Fund when comparing the Prioritized Solvency Test table to the Projected Funded Ratio table.

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Nobody Is Complaining About Enrolled Actuaries

The 2015 Enrolled Actuaries meeting is underway and there promises to be a lot of discussion of public pensions.  Three of the four actuaries on the New Jersey study commission are in attendance and according to an nj.com story their work is not done as they have now been tasked with implementing their plan.

More information as it becomes available but first, in the Professional Standards/Ethical Dilemmas Seminar that kicked us off Pat McDonough of the Joint Board updated us on the complaints received against Enrolled Actuaries.

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GASB Standards: A Synopsis in Plainer English

With GASB reports now coming out showing massive liability revaluations for public pensions union-funded think tanks are scrambling to reassure the public that benefits do not need to be cut and everyone just needs to chill. Not unlike:
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How relaxed people in Packerland were during the second-half collapse in Seattle is debatable as is the reasoning behind a Synopsis in Plain English put out by the National Public Pension Coalition seeking to undercut the new GASB methodology that replaced the old make-up-your-own-numbers methodology that governments had been using to get into this mess.  It may work…..on anybody who doesn’t think too much on the propaganda being spewed.

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No Super Bowl Resolution (but one on no pension bailout)

The wikipedia entry for Jason E. Chaffetz, U.S. Representative from Utah, includes this interesting tidbit:

Resolutions
Chaffetz has pledged to vote against what he calls “trivial resolutions,” including those dealing with sports, such as congratulating the winning team of the Super Bowl. Chaffetz feels that the House could be taking up more important legislation.

You may wonder what type of resolutions Representative Chafetz would take up.  Well, on January 21, 2015 he submitted H. RES. 41 which was referred to the Committee on Education and the Workforce and, if only for the laundry list of real problems enumerated, I post stating with the first Whereas:

How Did State/Local Plans Become Underfunded?

The Center for Retirement Research just released a six-page issue brief trying to answer that question by looking at factors like:

  1. investment returns;
  2. contributions;
  3. deviations from actuarial assumptions (e.g. workers living longer than expected);
  4. benefit changes; and
  5. assumption changes (e.g. long-run investment returns).

I can make it even briefer.  In fact, two words….

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How To Speak Public Pensions

John Lanchester provides a useful service in his new book How to Speak Money – What the Money People Say And What It Really Means introducing his topic by noting:

There’s a huge gap between the people who understand money and economics and the rest of us.  Some of the gap was created deliberately, with the use of secrecy and obfuscation; but more of it, I think, is to do with the fact that it was just easier this way, easier for both sides.  The money people didn’t have to explain what they were up to, and got to write their own rules, and did very well out of the arrangement; and for the rest of us, the brilliant thing was, we never had to think about economics. (page xiv)

The details of modern money are often complicated, but the principles underlying those details aren’t (page xv)

“There was a fear that if it was made understandable, it wouldn’t seem important” Grayson Perry on art world terminology (page 5)

My theory is that the jargon was developed to mask really stupid concepts (usually benefiting the jargon-user in some way) that, were they to be explained honestly, would be laughed out of use.

For example, the California Institute for Local Government (CILG) offers a Guide to Pension Terminology where they seek to define some terms that I believe could have been defined better.

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Detroit Paving Way for Bankruptcy Route to Public Benefit Cuts

A few minutes ago a judge approved Detroit’s bankruptcy plan which included these benefit cuts that Detroit retirees approved back in July:

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