POWIP Piece of Work In Progress – Former Abode of Dan Collins

Public Finance and Pensions News – 5 Jan 2011

OVERALL:

Which funds will go kerflooey first, an analysis by actuary John Bury. While the percentages are rather dire, one of the things I'd like to see is a comparison of the payouts to the operating budget for the various entities. While legislators' funds tend to be poorly funded [there's a reason for that -- usually there's a cliff as they might come into the fund with years credited from other public jobs -- depends on the system], the absolute amounts doled out are small and easy to hide as pay-as-you-go within a larger budget. But the really large plans might be difficult to cover even if their percentage shortfall doesn't look bad.

The budgets aren't looking much better, and many new leaders are talking down expectations.

Where would the money come from? Cities losing people, and these are cities that often have pension fund shortfalls already. Who are they going to tax? They'll go the way of Prichard, I think. Hard to squeeze out property taxes when no one lives there. Additional: America's Most Bankrupt Mayors.

ILLINOIS:

An analysis by Bill Zettler of Illinois pensions, part 1. He shows how Illinois pensions can't even be paid under best-case scenarios. And how the dire state of the State of Illinois will soon be exposed under new government accounting regs. In part two, Bill shows that not only the pensions can't be paid, but they won't be paid. There is a distinction. Go and read.

I don't know if the people of Chicago could handle the horror of pension shortfall disclosures, but it's going to be a policy that will be difficult to avoid, no matter how many labor groups are trying to get this canned. If Rahm is mayor, I'm sure he'll think of a way to get around it. Daley doesn't think that future looks bright (someone give me the list of those running for mayor -- I never want to hear about how smart these people are, ever.)

While the soon-to-be-former mayor's brother is being considered to replace Rahm -- ah, musical chairs.

Oh, speaking of musical chairs, the Comptroller who had been squawking about the dire state of Illinois pensions has found himself a soft landing at an actuarial consulting firm that specializes in public pension management.

Anyway, good luck plugging that debt hole. No, really, good luck. No, really, your pensions are on the line, too. It's not just pensions weighing down the budget, of course.

Tom Bennett in the comments pointed me here: 19th Ward Chicago. The latest post I see is on the four pensions state senator Ed Maloney is eligible for. As I have said many times before -- no pensions for politicians. It's bad enough that they get paid when they're doing the job. We have to pay afterwards in memory of all the crap they did to us, too?

NEW JERSEY:

A bit back, Gov. Christie talked of various pension reforms, but there's an odd legal fight over mandatory reitrement age for safety officers.

There's an article on the $54 billion-dollar shortfall in NJ pensions, which is noted to be misleading by John Sexton at Big Journalism. Note that the unfunded retiree health coverage is even larger.... and guess what? That stuff ain't guaranteed.

NEW YORK:

While running out the door, Paterson mentions the precarious state of NY pension funds, Cuomo comes in with a state worker pay freeze. But the pensions are the thing, Andy.

ODDS 'N' SODS

Math error in Pittsburgh requires last-minute recalculation to prevent state from taking over pension plan. I really really want to know what the screw-up was. Formula problem in spreadsheet? Wrong discount rate? Wrong cashflow projections? Mistaking years for months or vice-versa? Any Pittsburgh actuary would like to email me (marypat.campbell@gmail.com) -- it's not for publication, it's just that calculation screw-ups are a specialty of mine. I don't blog about it here, but I do a lot of writing on spreadsheet error and design.

With a great sense of timing, UC execs demand pension contributions from California. Law dean, you had better ready your lawsuit, because y'all are way down on the priority list. And you're not very sympathetic.

Hawaii's pension and finance problem - yes, certain states get more attention due to the eye-popping numbers, but it's not just NJ, NY, IL, and CA.

Meep

Meep is a member of the Irish Catholic mafia, having a suspiciously high number of green-eyed, red-haired friends. While she doesn’t have red hair herself [except when she goes into the sun (rare for any vampire)], she does have green eyes. She’s a raving Papist and is a life actuary on the side [i.e., she counts dead people]. An amateur pain-in-the-ass [willing to go pro!], she likes covering retirement, mortality, math, and education issues.