Advocating for Active and Retired State Employees and Educators
Articles of Interest
Goodman writes a consise article showing where he believes science and technology could lead doctors and patients if we weren't headed toward a 'one size fits all'-type medical system.
Mincer sites the expected reports of poor annual returns on public pension funds to increase calls for more realistic retirement promises for public workers. She says that while most public pensions assume an average return of around 8 percent, the annual return in 2011 for large pension funds was about half that amount, 4.4 percent. "Median returns were only 3.2 percent for the last five years and 6 percent for the last 10." Mincer says that California, New York state, and Baltimore County's public pension funds have lowered their assumptions to 7.25 - 7.5 percent. She thinks that 6 percent would be more realistic for planning purposes.
Keegan offers links to information about public pension investments including fees paid for specific investments. He sites the Biggs report (included in the Reports of Interest section) analysis of the national total shortfall of public pensions for 2011 as $4.6 trillion as a basis for taxpayers and public workers to demand reform. Keegan suggests that the way to start is to obtain the latest open public records for your pension fund performance.
Siting a Reuters article, Kolivakis reports that hedge fund outflows hit their highest levels in three years this month; a sign investors may be losing faith in them during mixed performance amid "choppy markets". He says that hedge funds lost an average 5.3 percent last year after the crisis in the euro zone and that they underperformed every stock asset class in the first half of 2012. Kolivakis quotes Simon Lack's book The Hedge Fund Mirage: "...in 2008 alone, the hedge fund industry lost more money than all the profits it had generated during the prior 10 years!" This information is important because SB 402 allows for investment of our ERS pension funds in hedge funds.
Kolivakis' analysis of a Reuters article about the renumeration of the hedge fund managers shows that they are typically paid a small fixed salary and then earn most of their money from lucrative performance fees charged on the assets they manage. He says that these fees have made dozens of the managers into some of the wealthiest in the financial industry. Kolivakis states that it is about time we start looking into the renumeration of hedge funds, private equity funds and real estate funds.
Julie Creswell reports that "...shortfalls in pension plans are causing many states to scour the more exotic corners of Wall Street, seeking the returns needed to keep promises to retirees." She shows how South Carolina's pension funds have been invested recently and attemps to explain why the results may or may not be good.
“The Widening Gap Update” Issue Brief discusses the $1.38 trillion unfunded liability of public pension medical plans. Public Broadcasting has picked up the discussions in the PBS News Hour and Public Radio. As reported in the GSRA June Newsletter, the Employees Retirement System is funded at 76% and the Teachers Retirement System is funded at 80%. The report discusses the assumed investment rate of return. Both the Employees Retirement System and Teachers Retirement System use a 7.5% rate rather than the 8% discussed, but the State Health Benefit Plan is severly underfunded.
David Harsanyi makes a point that pension reform is being pursued in California. He discusses the reforms planned for CALPERS—the State of California and the City of San Diego.
Miller's article sets the record straight on a dozen of the most glaring fallacies and silly slogans used by partisans on each side try to pitch these myths to support their arguments in the ongoing debates over public pensions.