[quote=CA renter]I concur with sdgrrl and mixalot, among others. BG might have strong opinions, as do many others here, but she’s made quite a few valuable contributions as well.
The nonsensical personal drama and name-calling that goes on here detracts dramatically from the overall discussions and debates. It’s a shame because there are quite a few really insightful posters who’ve been silenced by the ugly behavior of a small minority of posters.[/quote]
huh?
feeling left out because your “insightful posts” were subjected to unbiased economic (i.e. NOT pro-union) fact checking?
perhaps… “you can’t handle the truth”… AND frankly “I don’t give a damn what you think you’re entitled to”…because using nothing more than middle school math indicates portfolio mismanagement for 30+ years!!!
bottom line if a dumb $hit insight (i.e. error) is discovered, it should be exposed for what it is ASAP and not allowed to propagate because small mistakes over time can cause BIG PROBLEMS LIKE a “LOCAL” unfunded 2+ BILLION DOLLAR TAXPAYER LIABILITY as reported in the back pages of the newspaper!!!
(NOTE analysis and conclusions based on supporting “proverbial” 10,000 words or so of “contextual” DATA!)
[quote=”CA renter”]
September 4, 2014 – 6:04pm
I don’t get distracted by non-economic issues where politics are concerned. That’s not to say that these issues are unimportant, but that they pale in comparison to economics.
[/quote]
[quote=”CA renter”]
October 1, 2014 – 9:23pm
Yes, I’ve been following the pension issue for many, many years (far, far, far longer than you have), and I have also worked with negotiating committees and have done research for public employee unions.
[quote=”phaster”]
January 10, 2016 – 9:39pm
[quote=CA renter][quote=harvey][quote=temeculaguy]The trend is towards the elimination of the traditional pension, hopefully that makes you sleep better.[/quote]
That is the trend, and I’m optimistic that common sense will ultimately prevail.
Defined benefit pensions are a financial experiment that failed, but the effects still linger.
The OP was asking how much damage is left to be done.
The question is still relevant.[/quote]
Fifty years from now, do you honestly think they’ll be talking about the success of defined contribution pension plans? Which one do you think will be viewed more favorably, DB or DC pensions, once the DC debacle comes home to roost?
You’re dreaming if you think that DC pensions are superior in any way to DB pensions. I agree that some of the formulas are too generous (and have felt that way since the pension increase passed in CA), but DB pensions have been around a lot longer than DC pensions (since the Roman Empire, if not earlier), and they’ve done exceptionally well, all things considered.
[/quote]
Déjà vu
[quote=phaster]
September 8, 2014 – 8:59am.
[quote=CA renter]Many have defined benefits, and DB plans were the norm a few decades ago…you know, when the middle class and the economy were at their strongest.[/quote]
That era back in the 1950’s and 1960’s was IMHO an anomaly in world history, because the USA was the only super power in terms of military and manufacturing.
Consider that Japan and Germany back then had no manufacturing base, so DB were a way to instill worker loyalty (or said another way, DB came about because of a good economy, DB for the “middle class” didn’t create a good economy).
[/quote]
[quote=phaster]
October 2, 2014 – 8:18pm.
[quote=CA renter]
You’re also clearly ignorant about the differences between DB and DC pensions. DC plans have higher administrative costs and lower returns; DC plans have access to fewer investment options; DC plans don’t pool longevity risk; DC plans have lower contribution limits than DB plans (for employer and employee); and DB plans can remain in higher-yielding and more diversified investments and can better manage the ups and downs of the market over time because they are continuously funded by the contributions of current employees and their employers, and benefits are staggered well into the future (pooled investment risks over time and number of people).[/quote]
News reports about CalPERS and the SD pension board, leads me to believe idiots who over estimate their own management abilities AND have no basic understanding of math or the investing paradox, are at the helm.
Given your logic since CalPERS and SD have “professional” managers, elected board(s) to provide oversight and access to diversified investments, then why haven’t they beat the market benchmarks (i.e. the index of the DJ30 or S&P500)?
Simply stated a disciplined small/individual investor can beat market averages over long periods of time, because their trades fly under the radar and are “un-noticed” by the market.
However when the portfolio is in the BILLIONS (as is the case w/ SD), or the HUNDREDS OF BILLIONS (as is the case w/ CalPERS), any trade they make I’d argue is the market (so a different investment style is needed).
[quote=phaster]
[quote=livinincali] The one benefit of defined benefit contribution plans, retention, isn’t worth the risks, the frauds, the vote buying, and everything else it enables. That’s the bottom line. The rewards (reduced training costs retention, etc.) don’t outweigh the risks and therefore they should be scrapped..[/quote]
Agree! And after doing some research, seems the best way forward is to follow the example set by the Thrift Saving Plan (a federal government 401K style program, that can’t be corrupted/mismanaged like what happend at CalPERS or as what is happening with the SD pension program)
The Thrift Savings Plan, used by millions of federal workers, is like a 401(k), except it’s a lot cheaper. Last year it charged an average expense ratio of a mere 0.03%. That means just $3 in fees for $10,000 in savings, or $30 for a $100,000 portfolio.
John Turner, an economist and director of the Pension Policy Center and a former federal worker himself, said “Unless they’re advanced investors, I think they should leave their funds in the TSP because it’s simple and it’s easy enough that most investors can do it and do it well”
Don’t be a a useful idiot. If you’re not being paid, you should definitely demand payment from [Strike]the Privatization Movement[/Strike][CalPERS] for your services. They expect to reap great rewards from the work of people like yourself; make sure to get your piece of the pie.
I have yet to see Jerry Brown “calling bullshit” on CalPERS. Please include a quote (a real one, not one of your “edited” ones), and cite your source.
[/quote]
[quote=REUTERS]
…Governor Jerry Brown, a proponent of a sharper reduction in the expected rate of return, was quick to criticize the move, arguing the pension fund should move faster to cut risk from its portfolio.
“I am deeply disappointed that the CalPERS Board reversed course and adopted an irresponsible plan that will only keep the system dependent on unrealistic investment returns,” Brown said in a statement on Wednesday. “This approach will expose the fund to an unacceptable level of risk in the coming years.”
[quote=phaster]
February 29, 2016 – 7:39am
[quote=CA renter]“Standard And Poor’s Gives San Diego County Its Highest Rating
San Diego County has earned the highest possible rating from all three of the top credit agencies—Fitch, Moody’s, and Standard and Poor’s.”
ever consider a “AAA bond rating” is just a variation on a theme of information requested for a mega-super-sized-jumbo STATED INCOME LOAN (application)?
you know like stuff from the news a few years ago, where there was wide spread reports the various mortgage lenders did not verify the borrower’s income!
Déjà vu!!!!! because I seem to recall that all the stated income loans were then packaged in a CDO and like wise given the “HIGHEST RATING” from all three of the top credit agencies (Fitch, Moody’s, and Standard and Poor’s).
so is the news-release in a small “public” community rag, for some kind of loan application propaganda – in other words is it to assure/calm bond investors (i.e. an economic PR job)? perhaps since there was a quoted a political figure in the news article perhaps is it to assure/calm “local” taxpayers/voters (i.e. a political PR job)??
looking ahead, given all the parallels really have to wonder are SD muni-bonds destined to be the subject of the big sort sequel??? anyone else like the award winning writing style in the movie where mortgage bonds were described as dog$hit AND CDOs were likened to dog$hit wrapped in cat$hit
(analysis based on supporting data)
[quote=NPR] After the stock market crash of 1929, the agencies began to also rate bond investments for banks — at the request of the U.S. government. But things began to change in the 1960s and 1970s. Instead of charging investors for their ratings information, the agencies began to charge the bond issuers themselves for the ratings.
“People were quite critical of this and said it could create a conflict of interest,” Partnoy says. “You can imagine what the difference between ratings of restaurants and movies might be if instead of the Michelin Guide or the Zagat guide, if the restaurants or movie companies themselves were paying the raters to be rated, it’s an obvious conflict of interest. And now it’s very commonplace that companies and GOVERNMENTS — anyone who wants to borrow money — THEY ARE THE ONES WHO ARE PAYING FOR THE RATING.”
Don’t be a a useful idiot. If you’re not being paid, you should definitely demand payment from [Strike]the Privatization Movement[/Strike][mismanaged entities like SDCERS and/or all three of the top credit agencies] for your services. They expect to reap great rewards from the work of people like yourself; make sure to get your piece of the pie.
There are far too many people walking around who think that they know what they’re talking about when they really have no clue.
[/quote]
translate.google.com: (bond rating = pay to play bull$hit)
translate.google.com: (CA renter = useless dumb$hit)[/quote]
[quote=”phaster”]
February 29, 2016 – 8:14am
…WRT the operation of the local pension fund – notice in press releases – on the side that supports the politicians/lawyers/public-employees position, stories ALL BUT IGNORE THE MATH because its an inconvenient truth
AND instead hide behind the convenient fiction that its possible to have a sustainable DB program for honest hard working muni “union” employees who will suffer otherwise
in the december 2015 (back pages news-paper story) that started me questioning the wisdom of existing fund management (yet again), the actuaries long ago calculated out that in order for the LOCAL pension portfolio to work, the investment vehicles (bonds, stocks, etc.) basically had to grow 8% over the long haul!!!
BUT as we know from year to year the market will vary…
so some years the total return of the portfolio will be much GREATER than the actuaries design target of 8%,… and some years the total return of the portfolio will be much LOWER than the the actuaries design target of 8%,… BUT OVERALL the idea was that pension portfolio was designed to AVERAGE OUT to 8%
its impossible to say exact DEBT figures w/out more data BUT think of the problem as being, for the past three decades the portfolio operators (i.e. politicians/lawyers/public-employees) said hey the portfolio is doing great and give themselves a pension bonus payment of say anything greater than the actuaries target of 8% (thinking this “EXTRA” is not needed)
for example, back in the 1980’s and 1990’s when the market was really booming (and the portfolio produced returns on average much greater than 8%)
THE HISTORICAL RATE OF RETURN FOR THE STOCK MARKET SINCE 1900
…
during the 1980s the market returned on average 17.57%
during the 1990s the market returned on average 18.17%
…
the portfolio operators (i.e. politicians/lawyers/public-employees) in the 1980’s said hey since we averaged 17.57% in the market, so we have an EXTRA of 9.57% to give our selves because of a simple formula we included in a contract (average market return – actuaries design target = EXTRA) or (17.57%-8% =9.57%)
the portfolio operators (i.e. politicians/lawyers/public-employees) in the 1990’s said hey since we averaged 18.17%, we have an EXTRA of 10.17% because (18.17%-8% =10.17.%)
a misunderstanding of how “averages” work explains why the portfolio is BILLIONS in DEBT
City pensioners get ’13th check’ bonus
More than $6.1 million has been distributed to retired San Diego city employees in the form of a “13th check” — beyond their usual 12 monthly payments — making this year’s holiday bonus the largest such payout in the history of the three-decade-old practice.
But it’s become a source of conflict as the city’s pension system faces a $2 billion shortfall in promised payments, which remains a taxpayer burden and has led to budget crises in the past at City Hall.
what the $hit for brains managers of the San Diego pension portfolio did, was in reality take/pocketed for themselves the “excess” profits back in boom decades of the 80’s and 90’s that were originally designed to be kept w/in the account so that the portfolio averaged out to 8% from the 1980’s to the present day…
Handbook of Frauds, Scams, and Swindles: Failures of Ethics in Leadership (edited by Serge Matulich, David M. Currie)
Though SDCERS investments were earning well above the 8 percent rate of return estimated by the system actuaries, under normal conditions investments surpluses are required to make up for below-average returns in other years to achieve the average rate of return. Therefore, unless the actuaries’ estimates are grossly incorrect, in the long run true “surplus earnings” are impossible. The use of surplus earnings for the purposes other than maintaining the pension system, such as to expand existing benefits should be viewed as a loan from the system THAT WILL REQUIRE REPAYMENT IN THE FUTURE.
the economic problem NOW (and into the foreseeable future) is further compounded with financial instruments like “swaps” (which really supercharges the amount of money that somehow needs to be accounted for w/in the system)
and IMHO makes an economic disaster all but unavoidable (all because politicians/lawyers in a position of power who were suppose to over see pension portfolio operations, never took a step back to look at the big picture and apply basic middle school math concepts WRT the financial instruments they were in charge of)!!
