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Posted on April 28 at 3:34 p.m.
3/5 of the worst funded state pension systems are in red states.3/5 of the best funded state pension systems are in blue states. All those DB plans are doing just fine and have avoided the terrible California problems. DB pensions are the way of the future when managed well.
Anyone who says `Defined benefit pensions are a disaster' based on a few carefully picked disasters is demonstrating a low IQ.
Does Enron or Lehman or Arthur Andersen prove that `Private enterprise is a disaster'? Of course not.
``Defined contribution plans are the retirement plans for the future.''... that might be true, because they transfer huge sums to financial institutions through huge fees for ridiculous expenses like Kentucky Derby junkets for `hired women' to go with the fund managers. Fraud does win in America, particular with all the cheerleaders like many posters here.
DC plans are much more expensive than DB plans in any apple-to-apple comparisons, due to presence of longevity risks and high fees in DC plans.
Red states with enormously underfunded public pension systems:
Kentucky (#2 worst), Alabama (#4 worst), Alaska (#5 worst)... that is 3 of the worst 5.
The worst blue states: Illinois (#1), Connecticut (#3).
Best funded DB pensions states: #1 South Dakota (104% funded, red); #2 Wisconsin, (102% funded, blue, no, Walker didn't do this, takes 30 years after all to fund a pension plan); #3 Delaware (101% funded, blue), #4 Tennessee (97% funded, red); #5 New York (96% funded, blue).
On Colleges Bleed to Death Slowly
Posted on April 28 at 1:43 p.m.
So when is it acceptable for bank officers with fiduciary responsibilities to lie on loan applications in response to community group pressure? If the numbers weren't right, it was their legal responsibility not to process the loan application. There is always pressure from somewhere.
The real pressure was from bank managers who got bonuses due to increasing loans... not a rewrite of history, this was all documented by William K. Black, who prosecuted the original S&L crisis, and is an expert on loan fraud.
DB pensions are no anachronism... they are by far the most economical solution, due to the elimination of longevity risk. See Wisconsin for a well operated State fund.
The demise of DB pensions in the private sector was the result of massive fraud documented by Ellen Schultz, the Pulitzer-winning WSJ reporter, in her book `The Retirement Heist'. Letting fraud ruin the most economical retirement option is absurd.
Posted on April 28 at 9:22 a.m.
For once I agree with JarvisJarvis. Let's hope all the wrinkles can be ironed out and some positive changes enacted to make the public market more successful. I just wish it was right next to the Granada parking garage.
On A Public Market Divided
Posted on April 28 at 9:20 a.m.
No plan is immune to failure, particularly when financial whizzbangs dig into it and do their best to corrupt it. 10's of thousands of loan officers during the 2000's falsified loan applications, for example, leading to the housing bubble (and its collapse). Without them, fannie & freddie wouldn't have consumed the junk...
I can't ever overlook the corrupting influence of American business execs, who grab for every dollar in a manner that goes way beyond any decent ethical standard... read Ellen Schultz' book on how private retirement pension funds were transferred into executive pension funds.
The venality of our public sector is just about the same as the private sector, except in the public sector the proceeds are spread out a bit more. Jerry Brown is every bit as talented as Warren Buffett, and Brown is by no means in poverty, but his assets are meager compared to Buffett.
Wisconsin has a good modest state DB plan, 1.6% @ 62 I think. Yes, that sort of thing with SS and with DC was always the intent of the 1970s, when the DC plans were invented.
Posted on April 27 at 4:13 p.m.
Of course past history matters in pension funding... it takes 30+ years (in a good system) to build the equity for retirement. Of course, DB systems have a big bonus... the elimination of longevity risk, which makes them more economical than DC systems, as long as the DB systems are run well and modestly...
like they are in the state systems of Wisconsin, North Carolina, and Washington. Those are good systems to study and implement.
No one professor is going to bankrupt anything! UC is 2.5% at 60 or 62. It is your buddies, visJar, in the Prison Guard Union who get 3% at 50.
And I'm sure you are aghast at the US military pension system... where retirement can start at 37, and there is no pre-funding whatsoever!! All pay as you go!!! Why not suggest some kind of pre-funding for that? You won't because you like some extravagant pensions, if they go to your friends.
Of course STEM at UC should be supported. But how the heck will the US get on in the world if there is no place in UC to learn Urdu or Korean or Portuguese, and also learn about the cultures and religions of those places? Huh, JJ? Part of educated culture in all countries is literature and art. But you want to trash those programs.
Say what you will about Putin & Hollande, but you bet they do better at schmoozing the rest of the world that the US does, where our captains of industry only know american football & sex.
Posted on April 27 at 2:14 p.m.
Yes, visJar, **not contributing to a pension fund for 19 years** is an obvious road to disaster. Go find a single retirement advisor who supports no contributions, you won't find one. Facts are facts and that is the cause of UC's current pension woes... horrid decisions like that one, but firing Patricia Small and letting the execrable Parsky govern investment strategy is a close second. Finally paying out billions in VERIPs was awful too.
The problems of UCRS are distinct from CalPERS and CalSTRS. UCRS's problems are not predominantly caused by over-rich pension benefits, which do cause CalPERS problems, largely from the 3%@50 for the beneficiaries of Republican largess like your union buddies the prison guards. You are the one, vissJar, who brings up unions all the time, but you hide the fact that Republicans in this state support unions as long as they are law enforcement unions.
At UC, a minority of pay & benefits go to union employees.
If you compare job-to-job, Santa Barbara County pays way more for the same staff skills than UCSB does, up until the vice-chancellor level. There is a regular drain of mid-level personnel from UCSB to Santa Barbara County. Putting UC into the same category as California government is not supported by the data.
As for UC faculty, they regularly get offers from other universities, and actually function in a very competitive marketplace. The basic criteria for tenure at UC is that other institutions say they want to hire you away. And UCSB has achieved fantastic levels of excellence, with a better record of Nobel Laureates than Caltech over the last decades.
DC systems are not a solution, because Wall Street takes a huge slice in management fees... 2-5%. Also contributions can be just taken by the employer, like Penn Specialty Chemicals did.
Modest DB with good management (fees at the 0.1% level), investing in bonds and no more than 30% stocks...1.5%@65... that is the way to make sustainable DB plans. Loads and loads of public sector entities out in the US do that. The poster children of excess like CalPERS, Illinois, Rhode Island etc falsely impugn the careful.
Posted on April 27 at 12:17 p.m.
Tell seniors struggling on low interest rates that the State of California has systematically defunded UC in favor of Prison Guards salaries (including paying for time to put their clothes in the morning) and 3%@50 retirement packages, which they earn without even a college degree. But you love that.... the Republicans always voted for those benefits in the dead of night, and Schwarzenegger always agreed.
It is the State of California that has turned its back on UC. You should be praising UC for being so excellent it attracts the worlds best and brightest to California. But excellence doesn't matter to you, JarJar. Winning World War II doesn't matter to you either.
Public pensions, visJar? Go read the LAO's report,
``the report lists two liabilities—pension and retiree health benefits for University of California (UC) employees—for which the General Fund does not have a legal responsibility.''
Yet you call them `public pensions', when they are not, according to the LAO.
And you overlook the fact that the shortfall in UCRS was caused by mismanagement at the top by Republicans like Gerald Parsky. Had UC made modest contributions, instead of 0, between 1991 and 2009, there would be no UC pension debt today whatsoever. The main reason UC pensions are unsustainable was that UC skated on contributions for 18 years, not due to generous payouts.
You are mistaking CalPERS (which pays your beloved prison guards) and CalSTRS with UCRS.
Posted on April 27 at 11:24 a.m.
Keep it up, JarvisJarvis, you are so down the mineshaft of crazy no-one can hear your screams.
You overlook that 1)the taxpayer has no obligation for UC pensions. Check that with the California Legislative Analyst. I suggest you stop your falsehoods. Sometimes public funds have contributed to the employer portion of the UC pensions, but lately, that has not happened regularly. Yes, student tuition is now being used, but guess what? UC is still way, way, way cheaper than private universities. A case where the private sector is far less efficient than the public sector.
2)UC is extraordinarily successful by any yardstick. Whoops, you criticize California K-12 for not being successful, but give no credit for the most successful public university system in world history, the only university system that substantially contributed to the ending of a world war.
3)Interest rates are at all time lows. Whoops, JarvisJarvis, you forgot about that. Your cookie-cutter comment about borrowing is absurd, as everyone who borrows to purchase a house knows.
One socialist professor? Who cares. Angela Davis too. But at the same time, Edward Teller made 5X the salary of those put together when he was at UC, and don't forget Arthur Jensen at Berkeley. UC is a big tent with lots of iconoclastic faculty. You'd call Einstein a Socialist, and the Curies were definitely communists.
You only want clones of your viewpoints, JarvisJarvis. And you want to channel public funds (like the huge funding spent on Montecito Students) to your friends. You are every bit as corrupt as the people you criticize: same concepts different thieves, in your world.
Posted on April 27 at 9:31 a.m.
Once again, JarJar: 2+2=-3.1416, 2+2=sin(theta), 2+2=knights templar conspiracy.
JarJar: I told you so.---------------------------------------------------------
All public pension systems invest with a rear view mirror: they assume the future will be like the past. What you miss JarJar, is you should work hard to convince public pension systems that private sector growth is good for their pensions, but instead you rant about Ponzi (whose scheme involved postage stamps, not securities), saps, and the apocalypse.
So once again you pee in your own mess kit.
Ellen Schultz of the Wall Street Journal carefully documented the much larger raiding of private pension funds by private sector executives. They are not Wall Street. The execs who have done this are scattered all through US industry.
They totally believe in DB pensions, **FOR THEMSELVES**, funded by draining the DB retirement funds of the rank and file workers. Sure, if every private sector exec in the US can seize the DB funds of 100 rank & file workers, that private sector exec can and does enjoy a nice retirement that greatly exceeds that of public sector workers.
But if, say, the CEO of United Healthcare, funded largely from Medicare, gets a nice $50+ million post-employment payout, you are totally happy with that.
Of course, JarJar, you preach the financial apocalypse for the people you don't like. But you fail to point out that the origin of that financial apocalypse is the result of your friends' sense of entitlement to take all the money for themselves.
Posted on April 27 at 8:53 a.m.
JarJar: 2+2=5, 2+2=6, 2+2=3, 2+2=1, 2+2=-5, etc...
sevendolphins: actually 2+2=4
JarJar: I told you so.-----------------------------------------------------------
About UC pensions, once again:1)they are not the result of union lobbying or pressure.2)they are not `public' in the sense of CalPERS, where the plan dictates the taxpayer contribution.3)they are underfunded due to decisions made at the top of the UC's hierarchy; no contributions made by the employer between 1991 and 2009. Zero, nada, crickets.4)UCRS broke off from CalPERS in the early 1960's and has generally been way better managed, but still UCRS is a bit too generous.5)Really bad decisions like early retirement with extra credits (the VERIP program) were made in the 1990s and early 2000s that cost the UCRS billions.6)a careful, successful manager (Patricia Small) was liquidated in the early 2000's in favor of a free-market, Republican regents company (Parsky). It has been a disaster.
Of course JarJar says 1-6 above are the result of union pressure and the flaws in DB systems. Bullocks factorial, more of his hot air, his 2+2=-3.
The fact is that most private pension systems in the US were destroyed by malfeasance of private execs... the destruction of that system dwarfs the current problems in the US public system... read `The Retirement Heist' by Pulitzer-prize winning Wall Street Journal author Ellen Schultz.
DC plans are a form of heist where Wall Street grabs people's retirement funds.
What is best is modest DB plans which indeed are still maintained in many public institutions in the US... California DB plans got messed up in a variety of manners... CalPERS with benefits way too high, CalSTRS with lots of nickel & dimed added benefits, and UCRS with rotten decisions at the top management level (like the US private sector).