Posts Tagged ‘public’

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.

Continue reading

But New Jersey Is a Disaster

There have been those out there who do not see a public pension crisis including Teresa Ghilarducci who took to public TV yesterday to make that exact claim but…..when it came to New Jersey:

Continue reading

SOA Panel States the Obvious – Though Not to Everyone

The New York Times reported today that a “blue-ribbon panel of the Society of Actuaries — the entity responsible for education, testing and licensing in the profession — says that more precise, meaningful information about the health of all public pension funds would give citizens the facts they need to make informed decisions.”

Basically the report made four very sensible recommendations that most citizens would be amazed had to even be recommended.  Anyone without ulterior motives should have no problem agreeing with three of them:

  • a plan’s funding goal should always be 100 percent
  • disclosure of a “standardized plan contribution” that would be calculated by all plans using the same discount rate and funding methodology
  • not using funding instruments that delay cash contributions (i.e. Pension Obligation Bonds)

Then there is the tricky, though no less valid, recommendation:

Continue reading

Actuaries and the Public Pension Crisis

Professor Joshua Rauh moderated a webinar on the public pension crisis that covered many bases and is well worth watching all the way through:

but for those interested in the role actuaries play here are some excerpts:

Continue reading

13th Checks and Other Scary Public Plan Chimeras

A hallmark of government today is effective secrecy.  Meetings at which decisions are purportedly made are publicized in small print among hundreds of legal ads.  The media, if they even bother to report real issues, print official happy-face press releases.  Consequences of actions, if even disclosed, get buried in reports that run on for hundreds of pages.

What all this leads to is surprise when an absurd concept like providing an extra monthly payment to current retirees comes to light as it did in Detroit recently as part of an orchestrated campaign to now cut all benefits.  Where in the private sector do pension trustees get told they have extra money and decide to dole out a little to people who have no vested right to it except what is created after the fact?

But when it is oblivious taxpayers footing the bill for the benefits of those making the rules we get concepts like the 13th check and a few others:

Continue reading

Rolling Stone Covering Public Pensions

Miley Cyrus gets nude in the current issue of Rolling Stone which also includes an article by Matt Taibbi:

Looting the Pension Funds All across America,
Wall Street is grabbing money meant for public workers

I bought the magazine and read the Taibbi story but now I’m considering reading about Miley Cyrus’ drug use since there’s a better chance it contains more useful information on public pensions than Taibbi’s hit-piece.

NO to ERISA for Public Plans

Roger Lowenstein, the author and financial journalist who has been in front on so many important issues including the public pension crisis, has an article in this weekend’s WSJ titled ‘The Long, Sorry Tale of Pension Promises‘ which ends with:

“if you want governments to come clean, go after their drug of choice—credit…..Before we get more Detroits, or more Studebakers, the federal government should enact an Erisa (with teeth) for public employers. More simply, it could announce that local governments that fail to make timely and adequate contributions to their pension plans would lose the right to sell bonds on a tax-free basis. That would get their attention.”

I thought so too, once, but with Mr. Lowenstein’s imprimatur making it more likely and upon reflection I now see two problems with an ERISA for public plans.

Continue reading

Jig Is Up for Public Plan Actuaries

Today the New York Times noticed though they framed it as a dispute between two camps.  There is no dispute.  All you need is a working knowledge of annuities and government and the facts of the situation are indisputable.

Continue reading

Detroit Ramblings

There is so much about the Detroit bankruptcy (even if it doesn’t hold up) that will impact all public benefit plans and government finance in general for decades yet there are several related issues (none worthy of a full blog post yet) that I have not seen addressed:

Continue reading

Detroit Driven Like Studebaker

Detroit filed for bankruptcy today. The details of how they will default on pension promises to 32,000 people remains a deep dark secret but we do have precedent in the private sector and there may be a silver lining playbook in Detroit.

Continue reading