Are public pensions following IRS tax-delay rules?

The IRS is taking a new look at whether public pension systems qualify for tax deferrals, raising questions about nonprofit charter schools in CalSTRS and county systems using “excess” earnings to fund retiree health care.

Taxes on employer-employee contributions to pension systems and their investment earnings can be avoided until retirees are paid. But if the rules are not followed, the IRS can change the tax status and impose fines and penalties.

As public pension funding problems surfaced during the economic downturn, the U.S. Internal Revenue Service began encouraging retirement systems to seek compliance reviews and make voluntary changes.

Some large systems, such as the California State Teachers Retirement System, have not had full tax reviews in recent decades, relying instead on IRS approval of specific issues.

(The giant California Public Employees Retirement System and the University of California Retirement System did not respond to queries last week about the status of their tax compliance reviews.)

Last April, CalSTRS said in a letter to the IRS that a proposed new rule, aimed at excluding non-government employees from public pensions, could make more than 10,000 charter school employees now in CalSTRS ineligible for the retirement system.

CalSTRS said “590 out of a total 908 charter schools that elected to join CalSTRS are run by nonprofit corporations and will likely be deemed ineligible” under tests about board selection and role, sovereign authority and responsibility for debt.

The employees of charter schools, given more independence to innovate than traditional schools, were allowed to join CalSTRS in “private letter rulings” in 1995 from the IRS and the U.S. labor department.

“The vast majority of California’s charter schools take a form that is substantially similar, if not identical, to the charter school described in these rulings,” the CalSTRS letter said.

Saying that it was a plan administrator and taking no position on whether charter school employees should be in a governmental plan, CalSTRS offered some points to consider as the IRS develops the regulation:

Charters are granted by local school boards or the state education board, funding is apportioned like traditional schools, teachers must have a state credential and state educational standards must be met.

If the IRS determines charter school employees are ineligible, CalSTRS requested guidance on whether current members should continue unchanged, continue but accrue no new benefits, or be denied pensions and repaid for contributions.

CalSTRS mentioned the legal problem of impairing the “contractual relationship” with members. Because CalSTRS members are not in Social Security, denying pensions for prior years may mean workers were not in any retirement system, a federal violation.

At a town hall meeting in Oakland last March, said CalSTRS, the advance notice of new eligibility rules was called a “blueprint” by IRS employees. CalSTRS said the final version should be unambiguous and clear that the IRS makes final decisions.

“Although a less-stringent determination methodology may initially seem pragmatic, it could ultimately prove detrimental to plan administrators such as CalSTRS because they could be looked upon by potential plan participants as the final source of judgment for participant eligibility,” said CalSTRS.

It seems possible that government pension eligibility also may be an issue for CalPERS, which includes a number of special districts, and for the UC system, which has large research and medical operations.

The 20 county retirement systems that operate under a 1937 act, ranging from Los Angeles to Mendocino, have about 170 separate government employers, some of them small special districts that may face eligibility questions.

All of the county systems applied for an IRS compliance ruling, a “letter of determination,” before the deadline for the most recent cycle, January 31 of last year, said Robert Palmer, executive director of the State Association of County Retirement Systems.

Palmer said the systems hired outside tax counsels and, when needed, are making changes through a voluntary compliance program intended to avoid or reduce any IRS penalties, which can be severe.

The county systems operate under a law that allows “excess” investment earnings, amounts exceeding 1 percent of total assets, to be used to fund retiree health, give retirees a bonus and reduce employer contributions.

In an era when some view underfunded public pensions as a national problem, skimming off excess earnings in good years can look like a built-in mechanism to boost pension contributions from taxpayers.

Pension systems accused of concealing massive debt by using overly optimistic forecasts of future earnings, often 7.5 percent or more, had disastrous earnings in 2008, many with losses of 20 to 25 percent.

The fiscal year ending June 30 was another bad year: CalPERS reported earnings of 1 percent, CalSTRS 1.8 percent. If a county system diverts “excess” earnings in good years, what offsets losses — higher employer contributions?

Palmer said the diversion of “excess” earnings is an option seldom used now as most reserves are depleted. He said the option originated during the period when all pension funds were invested in bonds, and a 1 percent reserve was a significant cushion.

Proposition 1 in 1966 allowed pension funds to put 25 percent of their money in blue-chip stocks. Proposition 21 in 1984 allowed any “prudent” investment. Now pension systems expect to get about two-thirds of their revenue from investments.

How one of the county systems, Alameda, used excess earnings to fund retiree health is described on page 75 of the final report issued by the California Public Employee Post Employment Benefit Commission in January 2008.

In Mendocino County, a watchdog website, “Yourpublicmoney.com” edited by John Dickerson, was an early critic of the diversion of “excess” earnings. He thinks an IRS San Diego city ruling means county pension health funding will not be allowed.

A story about troubled New Jersey pension funds applying for an IRS compliance review last year said one of the changes demanded by the IRS in San Diego and New Hampshire was “the separation of pension funds from medical benefit accounts.”

Palmer said the first of the California county systems being reviewed by the IRS is Orange County. Any changes needed in Orange County could be adopted by policy or legislation for all of the 1937 act systems, perhaps leading to approval for all of them.

Orange County has been waiting three years for an IRS ruling on a cost-cutting plan negotiated with a union that gives current workers the option of choosing a lower pension, similar in some ways to a reform approved by San Jose voters last month.

In these polarized times, IRS action in both cases may be seen through the political lense of their affect on public employee unions:

Does delaying a ruling on the employee option slow reforms, and would denying pensions at nonprofit charter schools hamper that movement?

Reporter Ed Mendel covered the Capitol in Sacramento for nearly three decades, most recently for the San Diego Union-Tribune. More stories are at http://calpensions.com/ Posted 30 Jul 12

136 Responses to “Are public pensions following IRS tax-delay rules?”

  1. The Ted System Says:

    LOL– yeah– we wouldn’t want excess earnings to fund health care! We want more tax dollars to fund it and we don’t want new employees paying into retirement…we want taxpayers to fund all of it ! LOL The same old not too smart games of the teabaggers!

  2. spension Says:

    Skimming 1% of `excess’ earnings certainly is deplorable, when investment returns are wildly volatile. Hard to imagine the IRS being a helping hand, however. Hope springs eternal, though.

  3. Beelzebub Says:

    HAH HAH! :D

    The money is running out so the government is looking for ways to cut people out of the DB pension system CalSTRS! HAH! Just as I told you they would. They will do it through the IRS using back-door tactics! HAH!

    And soon they will target employees of non-Charter schools too. One way or another they will impose their will upon you pension hogs.

    If you weren’t required to read Orwell’s 1984 in high school then you need to check it out at the libary forthwith and educate yourselves about ‘double-speak’! HAH! :D

    Enjoy your day. It’s going to be a hot one! Keep hydrated and stay thirsty, my friends!!! HAH! :D

  4. The Ted System Says:

    ocObserver aka beezyboob aka oc ODDball—

    There is a high micro waive rate today— keep your tinfoil hat on and stay away from the Tri Lateral Commission!!!

    Ted

  5. Beelzebub Says:

    How else do you read the IRS swooping in and telling the Charter school employees that they don’t qualify for a DB pension, Teddy???

    Pull your head out, buddy. It’s coming. :D

  6. The Ted System Says:

    My God Beezyboob—- the end is near!!! I seriously hope we don’t later find out that the Tri-Lateral Commission was involved in all of this!!!

    I am heading out to the garage to freeze dry more stores.

    Ted Prepper

  7. Beelzebub Says:

    You never respond to the pertinent points in my comments. Why? Because you know I’m spot-on, first time everytime. And you have no intelligent comeback. So you divert and engage in goofy sarcastic nonsense that makes you look like a dunderhead.

    Thanks again for the victory, old boy.

    Now go hook up with queeq.

  8. Rex The Wonder Dog! Says:

    Beelz, just tell Teddy “!!!!!!!!!!!!!!!!!!!!!! BABY!”
    He always falls apart over it! Watch him come unglued at the mere mention of CalTURDS 1% ROI!

  9. Beelzebub Says:

    rex, did you read spension’s former quote that claimed that a pension fund’s ROI can only accurately get measured over a 50-100 year time period??? HAH! :D

    When I read that crap I almost fell off my chair I was laughing so hard.

    The bunk these clowns come up with is almost as good a watching reruns of Art Linkletter’s old series called “Kids say the darndest things”.

    It’s hard to know whether spension really believes the bunk he spouts. I have to believe that he’s just putting us on. Nobody could be that stupid.

  10. The Ted System Says:

    beezyboobobserver boot—–

    I don’t even read your posts— sorry— no content little fella.

  11. Rex The Wonder Dog! Says:

    rex, did you read spension’s former quote that claimed that a pension fund’s ROI can only accurately get measured over a 50-100 year time period??? HAH!

    LOL… there is not even a public penion fund over 100 years old…LOL!. spension i the new Teddy Steals, cant tkae a word from him seriously, I think he has a few more brain cells than Teddy though, which puts him at the level of a rock :)

  12. The Ted System Says:

    LOL 2 clowns— Calstrs was founded in 1913…..Can you do the math?

    lol ™

    Don’t be too hard on each other, you’re both blog trolls.

  13. Beelzebub Says:

    Teddy, had you not landed a job in government I suspect you would have been a grease jockey at one of these auto lube joints or pounding a register at Dollar Tree. But since you finagled a way to draw a check from Uncle Sugar now you feel that you are one of the elite. heh. That’s what really cracks me up about you jokers. Your illusion of grandeur just kills me. You scammed the system and somehow you think that makes you better than all the rest! HAH! George C. Scott would have been embarrassed to pull off your scams in his movie “The Flim-Flam Man”. heh. :)

  14. Rex The Wonder Dog! Says:

    Teddy at dollar tree??? Yes, sounds right!

  15. Rex The Wonder Dog! Says:

    Your illusion of grandeur just kills me
    ==
    They actually BELIEVE that they are worth the comp they get-have you heard some of these GED educated cops??? Claiming they are in the top 1% because only 1 in 100 applicants applying get hired!!!!!! Of course when you have half the worlds GEDers applying the stats go way up!

  16. Rex The Wonder Dog! Says:

    Calstrs was founded in 1913…..Can you do the math?
    ==
    You cant do the math, that is 99 years not 100 fool!

  17. Rex The Wonder Dog! Says:

    Beelz, this is the silver bullet that is going to slay the trough feeding vampires!!!!!!!!!!!!!!!!!!!!!!!

    End of 3%@50!!!!!

    And San Jose is in court on this right now. My 100% correct prediction rate says that the pensions will be allowed to change going forward.

    http://www.uiowa.edu/~ilr/issues/ILR_97-4_Monahan.pdf

  18. Ted Steele, Post Modern Humanist Says:

    lol— 1/2 of the clown posse —– can’t do math AND yet a new prediction based on U of Iowa law!!! Weeeeeeeeeee

    soon to be 0 for 10 !!!

  19. spension Says:

    Boy, BZ and Rex are spewing santorum all over each other and getting way to excited cleaning it and each others’ mayo off their bods with their tongues. Jeez, guys, keep your erotic affairs to yourselves, and quit posting your splooge here.

    Curious that top-to-bottom IRS tax reviews have not been carried out for the big California pension fund for years… that is a very interesting point.

    And Ted, a public pension fund is a pension fund, as we all know, covered by extremely strong legal agreements. Siphoning of money for the best of causes… say, to stop river blindness in Africa, or to subsidize medical care for the victims in the Soudan, is still IMO a violation of the terms of the pension agreement.

    Of course it is only the 50-100 year investment gains and their variation over time that matters. Because a typical retiree at age 75 will be in the same system that a new employee at age 22 is paying into… 75-22=53 years. To manage pension funds right you have mathematically take into account long-term contributions (which stabilize) and also `black swan’ downturns, and set the payout rate low enough that you survive it all.

    The big California pension funds never modeled the variability. And so here we are… as I’ve said many times, either cut payouts for vested employees and retirees, or enjoy sovereign default.

    Doesn’t change the mathematical fact: DB plans are more efficient than DC plans.

    If BZ weren’t using his Johnson to pith Rex’ brain, and if Rex weren’t using his swizzle stick to pith BZ’s brain, we’d be free of all the mutual mayo and santorum they spew on this site. How much better would this place be if they’d just go back to offering 8-year-olds candy to come into their houses.

  20. Rex The Wonder Dog! Says:

    LOL….Houston, we have had Meltdown :)

  21. Beelzebub Says:

    You’ve been using a lot of sexual inneundos lately, spension. You into something that we ought to know about? You’re anonymous here. You can tell us. Catharsis is healthy. It purges the soul. Nobody else will find out. Promise. ;)

    Why of course the IRS is coming in. The gov understands how critical the pension problem is and that they have to do something about it or the entire system implodes. So just like they did with Al Capone – they use the IRS to find the achilles heel. heh. The IRS will find some obscrure law on the books that will disqualify huge numbers of existing workers for a DB. Just like they are doing for the Charter school employees. heh. And BOOM! After the election is over Obama will throw the knockout punch!!! HAH! Obama will blame the law! HAH! And in his next sentence he will issue an executive order to transfer 70% of existing gov workers into DC retirement programs!!! HAH!

    What did I tell you before, spension. Read this carefully:

    IT’S MUCH EASIER TO CHANGE THE LAWS OR TO EVEN CHANGE THE CONSTITUTION THAN IT IS TO PAY PEOPLE WITH MONEY THAT DOESN’T EXIST!!!!

    Remember that. It will serve you well for the rest of your pathetic life.

    Oh, and what good is it to measure ROI over a 50-100 year term when the pension funds will be bankrupted in 10 years or less? duh. Put the horse in front of the cart for once, spension. Your claims are ludicrous.

    “Doesn’t change the mathematical fact: DB plans are more efficient than DC plans”

    Once again, spension. Did you look at the 6-page link of CalPERS investment managers that I posted? Each of those managers gets money from CalPERS for their services. Why can’t that simple concept sink into your skull and stick? I estimated the number of investment managers at over 200. Do the math, dude.

    With DC plans the State could bid out the services to ONE broker like Vanguard, Fidelity, Schwab for the entire line of business – get a HUGE discounted fee for services and save money up the ying-yang. But you can’t seem to grasp that simple concept that I could get a 3rd grader to understand in 20 minutes.

    Jeez, you and Teddy and queeq need to hook up and formulate a new plan of attack. Maybe with 30 fingers and 30 toes you can come up with a better mathematical formula!!! HAH! :D

  22. spension Says:

    Well, it is all you and Rex splooging all over each other and these boards that is the innuendo. Blathering on about skulls and Al Capone… what a waste of posting.

    I’ve already pointed out that CalPERS’ expense ratio is high… 0.5% compared to 0.15% for CalSTRS and UCRP… UCRP bailed from CalPERS about 50 years ago because of that. Can you read, BZ? Probably your brain is pithed by Rex’ swizzle stick. But then the fact is: CalSTRS and UCRP are as cheap on expense ratio as Vanguard. Fidelity and Schwab aren’t even close.

    You have no idea what math even is, BZ.

    You have no clue about the *OTHER* main reason DB plans are more efficient than DC plans… it is not just fees (and whatever you say, the *TRUTH* and *FACTS* are that the average expense ratio is 2.5% for US DC plans). But I keep forgetting you brain is pithed, and you are trying to use Rex’ mayo to think with. I feel for you, dude, must be, like, outrageously hard to think like that.

    The other reason is the `longevity effect’ from pooling the funds. See figure 1 on page 2 of

    http://www.demos.org/sites/default/files/publications/TheRetirementSavingsDrain-Final.pdf

    Whoops! I keep forgetting, you don’t have brain, its been pithed, BZ.

    But I do understand you love to talk to third graders. You really should register with the other lovers of third graders at your local police station.

    As for Rex, `Houston, we have a moron’. Whoops, there I am, using words more than 3 letters, he won’t get it.

  23. spension Says:

    And here is more facts and mathematics showing DB are more efficient than DC, for the same level of benefits:

    http://www.nirsonline.org/storage/nirs/documents/Bang%20for%20the%20Buck%20Report.pdf

    Of course, in california the DB benefits were raised too high…that is the real problem, *NOT* DC is better or cheaper than DB.

    Well, there is one way that DC is better: you really have the money, so it is hard to yank it back. And I do think sovereign default or a voluntary mechanism will yank back the unrealistically high DB benefits that were promised, unwisely, in California.

  24. Ted Steele, Post Modern Humanist Says:

    LOL– Beezyboob thinks there is no 100 pensions system! Clown alert!

  25. Beelzebub Says:

    spension, be honest with us.

    Are you tugging on Uncle Sugar’s teat? Are you in line for a DB pension?

    All your writings point sharply in that direction.

    Why would CalSTRS have any fewer investment managers than CalPERS has on a proportional level?

    Again, why not just hire a brokerage to manage the entire line of business with HUGE fee discounts? The Vanguards, Fidelitities and Schwabs of the investment world have massive smorgasboards of funds and ETF’s to choose from. Many have expense fees of 0.20% or less.

    HUGE amounts of pension fund value are being skimmed right off the top by Wall Street that you aren’t even aware of, spension. They laugh at people like you because you are so naive. Like taking a Baby Ruth from a 1 year old. :D

    Why??? Because your pension funds are DEEP in the back pockets of Wall Street. You are just too disingenuous to admit it.

  26. spension Says:

    WTF? I have DC, with Fidelity and Vanguard. Wish it could all be Vanguard, but my employer forces me into Fidelity, which is *way* more expensive than Vanguard. Vanguard is great, but here’s the thing: all sorts of employment records, family records, and payout info must be kept by whoever manages the pension fund. That stuff is included in the low UCRP and CalSTRS expense ratio. I don’t think Vanguard would do any better, frankly…their 0.2% doesn’t include all that.

    CalPERS has always been a bit careless… both CalSTRS and UCRP are much less so, but they have other serious deficiencies. Want to read about some better pension plans?

    http://www.nirsonline.org/storage/nirs/documents/Lessons%20Learned/final_june_29_report_lessonsfromwellfundedpublicpensions1.pdf

    And pension fund value is not being skimmed out of DC plans too? WTF, are you serious? You have a big problem, BZ, in that you fail to do apples-to-apples comparisons. Wall Street afflicts DB and DC in much the same way, *except*, the *average* DC plan has *huge* expenses… on average 2.5%. Wall Street, in that case, is exclusively screwing DC plans.

    There are all sort of high-return ultrastable fixed income plays out there. Read Caro’s bio of Lyndon Johnson to learn about a few in electricity generation in Texas. Now that is where the pension funds should get in at that teet, to compete with the Mitt Romneys and George Soroses who know how to work those deals. Actually, I think the old UC manager who was fired about 10 years ago elbowed into some of those. Stable, long-term, 5-10% returns.

    Now get down to the police station and register your love for 8-year olds who eat Baby Ruths. They want to know where you live, BZ.

  27. Beelzebub Says:

    “Vanguard is great, but here’s the thing: all sorts of employment records, family records, and payout info must be kept by whoever manages the pension fund. That stuff is included in the low UCRP and CalSTRS expense ratio”

    What the heck are you talking about? CalSTRS must pay for record keeping PLUS all the investment fees their army of investment managers – EACH ONE INDIVIDUALLY! Using ONE broker manager would saves TONS of money based on economy of scales.

    “DC plan has *huge* expenses… on average 2.5%”

    Maybe a government DC plan. But not a DC plan in the private sector. Private companies use ONE BROKERAGE to manage their 401-K’s and get HUGE discounts for doing so. No need to submit fees to hundreds of separate investment managers. I really don’t think you know what the hell you’re talking about. You’re just spewing more gas.

    “Now get down to the police station and register your love for 8-year olds who eat Baby Ruths. They want to know where you live, BZ”

    That comment just proves to me that you’re a total dumm-ass. Thanks for confirming.

  28. Rex The Wonder Dog! Says:

    LOL, Beelz, you have detsroyed dorky spension, he is such a fool, all he has are the gutter level insults. He rides the short bus with Teddy.

    DB’s CHEAPER than DC’s!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Hahahahhahahahaah…..what a clown, I wonder if he wears his clown make up to bed at night ;)

  29. spension Says:

    CalSTRS has about a 0.15% overall expense ratio, including all that stuff. Lower than Vanguard (if Vanguard had to do the personnel/family management).

    I have provided references for the 2.5% expense ratio is *all US DC plans*. The issue is: small businesses (and most employers, are, after all, small businesses) get whacked by the investment industry.

    http://www.demos.org/sites/default/files/publications/TheRetirementSavingsDrain-Final.pdf

    Good math and careful work does look like gas to you, because you got Rex’s mayo where he pithed your brain, BZ.

    You guys are of course, uniquely tuned in to gutter level insults, just working at your level. Enjoy pithing each other’s brains with your pokers.

  30. spension Says:

    And BZ, your pithed brain hasn’t figured out the longevity effect yet. DC plans get whomped by that.

  31. Ted Steele, Post Modern Humanist Says:

    well said Spension—- and beezyboob thinks there are no 100 year old DB plans! LOL—- he maybe never heard of calstrs lol clown alert

  32. Rex The Wonder Dog! Says:

    Wow, SEIU is losing their tax exempt status for scmaming;

    Former SEIU leader indicted

    http://latimesblogs.latimes.com/lanow/2012/07/former-seiu-leader-indicted-1.html

  33. Beelzebub Says:

    “CalSTRS has about a 0.15% overall expense ratio, including all that stuff”

    You’re full of dogcrap. How could STRS possibly manage the documentation PLUS pay the investment managers at an overall expense ration of 0.15%??? HAH! LOL!

    Oh, did I tell you that my name is Clark Kent and am faster than a locomotive and can leap tall buildings in a single bound, spension??? HAH!

    Put down the damn pipe, spension. You’ve sucked enough tonight!!! HAH! :D

  34. Beelzebub Says:

    SEIU leader indicted for stealing? hah. What a shocker, eh?

    I see he was married in Hawaii and tried to scam the costs. I wonder if Obama attended? Maybe they’re related, eh?

  35. Rex The Wonder Dog! Says:

    spension is higher than a kite off that crack he is still smoking…DB’s cheaper than DC’s…hahahahahhahahahhahahaa…what a clown.

  36. spension Says:

    ““CalSTRS has about a 0.15% overall expense ratio, including all that stuff”

    You’re full of dogcrap. How could STRS possibly manage the documentation PLUS pay the investment managers at an overall expense ration of 0.15%??? HAH! LOL!”

    It is 0.167%, see http://www.calstrs.com/help/forms_publications/printed/SumReport2011.pdf , page 1, add the figure for the `investment expense’ in the table at the bottom, $148,490,000 to the figure for `administrative expenses’, $110,484,000 to get $258,974,000; then divide by the total in the pool ($155,354,815,000), you get 0.167%.

    “DB’s Cheaper than DC’s…”

    this facts is documented in the following link:

    http://www.nirsonline.org/storage/nirs/documents/Lessons%20Learned/final_june_29_report_lessonsfromwellfundedpublicpensions1.pdf

    Your splooge, BZ and Rex, is completely negligible. Not even wrong.

  37. spension Says:

    http://www.nirsonline.org/storage/nirs/documents/Bang%20for%20the%20Buck%20Report.pdf

    is the report that documents that DB are more efficient than DC. The link above was a different one, still very interesting.

  38. Beelzebub Says:

    NIRS = Union Hit Piece.

    How fricken stupid do you think we are?

    Do you think you’re chatting with 2nd graders here?

    Pay me enough money and I can prove to you that the sun rises in the west too. lol.

    Get some shuteye, spension. The inside of your skull must look like brain cell mush by this time.

  39. Captain Says:

    It’s a shame that this topic hasn’t received the intelligent dialogue that it deserves.

  40. Rex The Wonder Dog! Says:

    Typically speaking, an employee doesn’t have a choice as to whether to to enroll in a defined benefit plan or a defined contribution plan. It’s usually one or the other depending on the company. Defined contribution plans are becoming more popular as they are much less risk to the company and arguably the employee as well.

    http://www.milliondollarjourney.com/defined-benefit-pension-vs-defined-contribution-pension.htm

    is the report that documents that DC are more efficient than DB. … still very interesting.

  41. spension Says:

    “NIRS = Union Hit Piece.

    How fricken stupid do you think we are?”

    Now that is hardly an intelligent, fact-based response. Guess you’re unable to respond to the *facts*, and have to jump into irrelevant ad-hominem attacks. As for your question, well, yes, you answer that yourself.

    as for:

    http://www.milliondollarjourney.com/defined-benefit-pension-vs-defined-contribution-pension.htm

    it starts out, in the 3rd line, equating DB with `Gold Plated’. What kind of math is that? And that link says *nothing* about an apples-to-apples comparison of efficiency.

    The point is: for the same benefit, DB is cheaper than DC. I’ve said, like, 1000 times: California’s public pension ratcheted up the benefits too high. That is the core problem. But for a certain benefit in retirement, DB is simply more efficient than DC.

    I’ve said: for the contributions made, california’s systems would have done just fine with 1% at 62. But 3% at 50 was a huge overpromising of benefits.

    Intelligent dialogue is a concept outside of BZ and Rex’s universe.

  42. Ted Steele, Post Modern Humanist Says:

    DB’s are more eficient than DC’s and who can live on a DC? No One (unless you’ve paid off your house which I advise strongly for all !!!!!)

  43. SeeSaw Says:

    RWD and Beeze-You have both regressed badly. It is a sad sight to see your posts. Take stock—.

  44. Ted Steele, Post Modern Humanist Says:

    Seesaw— I am not sure if it’s regression or just the way these guys are. They are limited intellectually and pretty slow. The angry sort of Beckian rant is their default.

  45. SeeSaw Says:

    One-percent at 62, would not even pay the medical insurance premiums.

  46. spension Says:

    Depends on whether the employee is in Social Security, and whether they are in Medicare.

  47. SeeSaw Says:

    I receive Medicare due to the SS status of my spouse. Together, we are out-of-pocket $18,600/yr. for the cost of medical insurance premiums which are secondary to Medicare, and those costs are in addition to the $6,384 yearly stipend I receive from my former employer. The medical premium- costs are rising every year, and usurp the pension COLAs. A one-percent pension would not have covered the medical premiums for me and my spouse, let alone pay for food, and SS coverage would not have been of much benefit either, because there are the federal government’s offsets penalizing those on public pensions.

  48. Ted Steele, Post Modern Humanist Says:

    Well said Seesaw– and the tea-b folks out here think that health care is just fine! LOL they want to replace the Aff Care Act with what? LOL Zippo !

  49. Beelzebub Says:

    “RWD and Beeze-You have both regressed badly. It is a sad sight to see your posts. Take stock—.”

    Coming from someone so deep in denial who consistently refuses to address the points that Rex and I make in our comments – I find your statement hilarious. It’s like someone who just fell into a vat of cow manure telling everybody else that they stink. You’re always good for a laugh, seesaw. Not much else. But you do provide some fine entertainment for those of us who use reason and logic in our viewpoints.

  50. Beelzebub Says:

    “The point is: for the same benefit, DB is cheaper than DC”

    BS.

    Your claim that CalSTRS has an overall expense ratio of 0.15% is an outright fabrication. That is factually misrepresentation.

    Here, spension, smoke some of this:

    http://www.calstrs.com/members/pension2/p2_fees.pdf

    Look at the fees on the individual investment vehicles. They vary from .40% to 1.22%. And that doesn’t even include the most costly element of managing all the member documentation which is not done by the fund – but by either in-house or contracted personnel.

    So you are so full of it, man. Shame on you for passing along bogus information on public boards.

    You’ve been slimed.

  51. Ted Steele, Post Modern Humanist Says:

    Beezy—seriously—while I didn’t read your whole post….never do….I will say that something must be going on in your life that is a bit negative? You seem to be more dark and agitated than usual. Are you ok? Maybe a little time away from the single wide and the posting??? Ted

  52. Beelzebub Says:

    “I receive Medicare due to the SS status of my spouse”

    As you’ve been previously advised, your personal anecdotes are meaningless on these boards. Unless you are willing to post your household tax returns or joint benefit statements for us to review on-line don’t waste your energy. I only assume it’s more propoganda. Show us the official documents, dear. Or keep it to yourself.

    Sincerely,

    The Readership

  53. Beelzebub Says:

    Don’t worry about me simpleton teddy. I’m having the time of my life watching you folks slowly melt down like the Wicked Witch of the West after Dorothy tossed a bucket of water on her.

    “oh, you cursed brats. Look what you’ve done. My pension is melting…..melting……melting…….Oh, what a world! What a world! Who would’ve thought that peasants like you could have destroyed my pension’s beautiful wickeness! Ooooh, ooooh. I’m being liquidated….look out…..I’m going….ooooh, ooooh……….

  54. spension Says:

    Here, spension, smoke some of this:

    http://www.calstrs.com/members/pension2/p2_fees.pdf

    Look at the fees on the individual investment vehicles. They vary from .40% to 1.22%.

    Uh, sorry BZ, you are bringing up the ***DC*** component of the CalSTRS system… 403(b)’s and 457(b)’s are *****DEFINED CONTRIBUTION*****. Yes, large fees!

    For the ***DEFINED BENEFIT*** portion of CalSTRS look at:

    http://www.calstrs.com/help/forms_publications/printed/SumReport2011.pdf , page 1, add the figure for the `investment expense’ in the table at the bottom, $148,490,000 to the figure for `administrative expenses’, $110,484,000 to get $258,974,000; then divide by the total in the pool ($155,354,815,000), you get 0.167%.

    You have proved my point admirably, BZ… DB is way more efficient than DC for expenses. Now, the 403(b) and 457(b) programs of CalSTRS have some of the most efficient funds around… Vanguard and DFA. And still those DC programs are substantially undercut by the lower fees/expenses in CalSTRS DB system.

    And you have still neglected the longevity effect due to pooling in the DB plan, which is a big deal too.

    As to whether 1% @ 62 is too small… the point in my opinion is… when the California public pension systems became dependent on the stock market (in the late 1970’s, I think) and moved out of pure bonds, nobody really carefully studied the effect of market volatility on the payout. The stock market was assumed to be mostly a smoothly increasing asset… but in reality there are huge up and down swings, which can be well modeled (and are well modeled by various researchers in this field).

    The smoothly increasing stock market assumption allowed all sorts of bad decisions to be made… like 3% at 50. The way I’d run the system: fix a contribution rate, say, 10% employer + 5% employee, on top of SS. Never let that change. And then set the benefit so that the system survives the worst historical stock market volatility without new contributions required.

    I am pretty sure 1% @ 62 would pass this test. I’m also sure 3% at 50 would not. Would 1.8% at 62 work? I don’t know. It might. But the good hard modeling hasn’t been done to support a rational decision to this query.

    But we do know: the current benefits have caused all the Cal public pensions to be underfunded right now. People don’t want to raise taxes to cover badly justified pension promises.

  55. Rex The Wonder Dog! Says:

    Look at the fees on the individual investment vehicles. They vary from .40% to 1.22%. And that doesn’t even include the most costly element of managing all the member documentation which is not done by the fund – but by either in-house or contracted personnel.

    So you are so full of it, man. Shame on you for passing along bogus information on public boards.

    You’ve been slimed.
    Spension just got slimed into next week!

  56. spension Says:

    What, Rex? BZ posted info for the CalSTRS *DC* plan, and showed that the *DC* plan had high expenses.

    The expenses for the *DB* plan are 0.17%, way lower than the DC plan you quote.

    Do you live in some sort of alternate reality or something?

  57. SeeSaw Says:

    Beeze, my anecdotes, as you call them, are actual experiences of me, a public sector retiree, and the true facts about my, “lifetime healthcare”. No propaganda there–and a lot more credible than anything you have to say. Do you have any actual documents or proof to show that you are not a flaming lunatic!

  58. spension Says:

    When confronted with the CalSTRS data that the CalSTRS DC plan has expense ratios from 0.40% to 1.22%, and that the CALSTRS DB plan has an expense ratio of 0.17%, BZ and Rex do a victory dance, claiming that proves that DC plans cheaper than DB plans.

    Pathological. Alternate Reality. Schizoid. What else can one conclude?

  59. SeeSaw Says:

    I don’t know if and when CalPERS ever had a pension formula that low. It was 2% at 60, rising to 2.418% at age 63, when I joined CalPERS in 1975–I was upgraded to 3% at 60 in 2001, and such formula no longer exists for new hires at my former place of employment. They are back to 2% at 60, where they started.

  60. Rex The Wonder Dog! Says:

    seesaw has a crush on Beelz, always has, I still you you two should hook it up :)

  61. Rex The Wonder Dog! Says:

    spension, DB’s don’t work, the get the dokrs in power to raise the multiplier, retroactively, under fund the system, and then walk away leaving the trillions in deficit for others to fund-the trough feeders dont contribute even 5%.

  62. Beelzebub Says:

    nah. Seesaw wouldn’t want me even if I were available. I snore and don’t pick up after myself.

    I always thought Teddy and Seesaw were a good match. But what the hell do I know?

  63. Beelzebub Says:

    No possible way does CalSTRS have a TOTAL expense ration of 0.15%, spension. You are forgetting to add some expenses in. Expenses are generally the net expenses (of the investment vehicles themselves and the administrative expenses for salaries, benefits, etc…. of the board, advisor and all the support staff. Somewhere you are missing something. It’s not that important to me to dig into it and find out where you have been remiss.

    Squabbling over expense ratios when it comes to pensions is stupid anyway. It’s like somebody being worried to death about a hangnail when they have stage IV cancer.

    Get your priorities straight.

  64. Rex The Wonder Dog! Says:

    I always thought Teddy and Seesaw were a good match.

    Teddy has too many sock puppets, which means he cannot keep his personality disorders straight-even seesaw could not handle that nightmare :)

  65. Rex The Wonder Dog! Says:

    Squabbling over expense ratios when it comes to pensions is stupid anyway. It’s like somebody being worried to death about a hangnail when they have stage IV cancer.

    100% true.

    spension’s ridiculous comments that DB’s are better b/c they ** MAY** save a small amount on admin expenses when the sustainability of the pensions are so far off the hook that they are all essentially bankrupt, because the taxpayers ARE not picking up the expenses for a multi million dollar pension for a GED employ which they did not even contribute a single dime to themselves in many cases…..

  66. spension Says:

    Let’s hear it BZ and Rex: you screwed up big time, and posted the Defined Compensation expense ratios for CalSTRS and claimed they were for Defined Benefit.

    Major, major screwup. Admit it directly and say you totally messed up.

  67. spension Says:

    that is Defined Contribution above.

  68. Beelzebub Says:

    All the pension risk is on the backs of the taxpayers. W/ 401-k equivalents the risk is shifted to the employee – as it should be. The employee should be responsible for his own damn retirement – not the taxpayer. It’s up to the individual to manage the finances of his retirement. Not the taxpayer. Grow the F up!

    And that fact trumps all discussion about expense ratios.

  69. The Ted System Says:

    LOLOLOL— ANOTHER supreme screw up!!!!!!!!

    Beezyboob and Poodle post like children!!!!!!!!!!! So lame !!!!!!!!!!!!!!!!!!!

    They think DC’s are DB’s !!!!

    CQ CQ CQ—- is anybody home ??? LOL Trolls !

  70. SeeSaw Says:

    I suspect they both came from the same litter.

  71. spension Says:

    BZ, you are changing the subject. You screwed up big time.

    If the rate of return is 4% per year, and the DC plan managers take 2.5% (which is the US average), that leaves you 1.5% per year.

    They get 62.5% of the profits, and you in your DC retirement only get 37.5% of it. It is a ***HUGE*** deal.

    But if the expense ratio is 0.17% (as it is for CalSTRS defined benefit), you retain 95.8% of the profits for retirement.

    Over time, the dominant source of funding in *ALL* pre funded retirement plans is investment returns, not the contributions.

    So DC plans siphon off a *huge* portion of the retirement funding.

    The large expenses in DC plans swallow 20-40% of the funds. It is making money just like Willie Sutton did… Willie Sutton robbed banks because that was where the money is. Investment managers of DC plans charge high expenses for just the same reason. An easy living just taking the money from the ignorant.

    John Bogle who founded Vanguard pointed this all out in the 1950’s. Of course, innumerate folks never get it.

    There are two types of people: those who understand that high investment expenses are a huge effect, and, poor people.

  72. Theodore Steele IV,Adjunct Profesor Says:

    The beezyboob ™ understands little of Bogle—- wasting your time.

  73. Rex The Wonder Dog! Says:

    Beezyboob and Poodle post like children!!!!!!!!!!! So lame !!!!!!!!!!!!!!!!!!!…….
    I suspect they both came from the same litter

    :)

  74. Beelzebub Says:

    spension, you’re just stuck on stupid, man. I can’t help ya. Neither can rex. And God knows we’ve tried. Your obsession with expense ratios is over the top and so far off target.

    You don’t have hair like that Holmes fella in Colorado, do ya? :D

  75. spension Says:

    Keep your `help’ to yourself. And from you 2, saying I’m stuck on `stupid’ is a compliment. Thanks BZ.

    You don’t understand risk, either, BTW. In a DC plan there is introduction of a huge *new* risk: the risk that you live to 95 or 100, which is a few percent. I worry a lot about it because I use DC. With just one person contributing, you have to provide for that possibility… that you outlive your $.

    A DB plan is way, way less risky. The people who die early subsidize those who live to 100. It is an `insurance like’ aspect. A DC plan is like insurance with only 1 person covering it all.

    Given that the risk is way less in a DB plan than a DC plan, yes, the taxpayer covers the risk in a public DB plan. That is why the benefits should be set extremely conservatively in a DB plan. They weren’t for California. That is the real issue.

    Seesaw…. maybe 2% at 60 is OK, maybe not. Gotta do the actuarial stuff right… I don’t think CalPERS did. In any case, I disagree with the whole concept of (percent)*# of vested years.

    Why do administrators and prison dentists need $200-300K/year retirement income? There should be a cap at about $100K on all public pensions.

    Social Security does not have a (percent)*# years formula. Even if you make anywhere from $40,000 – $105,000/year salary while working, you max out at roughly $25,000/year Social Security.

  76. SeeSaw Says:

    You do have to have your SS figured over a span of 35 years, regardless of whether you worked that long or not.

    The pension reform plan that was worked out by the experts, hired by the joint conference committee to look at the Governor’s plan, contains a cap of $110,000 on the amount of public income that will be pensionable–which would result in no pensions over $100K–of course those who do get that amount from CalPERS comprise 2% of all CalPERS beneficiares. Anyway, the plan was presented to the Governor who did not like it. So, they are back at square one. it will be interesting to see what the State Legislature comes up with before the end of August.

  77. spension Says:

    Of course if the experts were truly expert, we’d not be in the mess we are currently in… and of course there are public pension systems that are not in our mess… see

    http://www.nirsonline.org/storage/nirs/documents/Lessons%20Learned/final_june_29_report_lessonsfromwellfundedpublicpensions1.pdf

    That only 2% of all *current* CalPERS beneficiaries are over $100K is interesting, but they probably receive 5% of CalPERS outlays, and surely their percentage will rise (even indexing the $100K with inflation) due to 3% @50 for safety and other benefit increases granted in 1999.

    Rank and file taxpayers surely are uncomfortable paying such high pensions for people who are no longer doing active work. It is one thing to be doing the hard tasks of prison dentist, it is another to be enjoying retirement. All retirees are equally unproductive. I understand that a contract is a contract, but the >$100K pensions cast a shadow far bigger than their simple financial impact.

    How nice to have an intelligent comment to reply to, and not the pathologic of BZ and Rex.

  78. Rex The Wonder Dog! Says:

    Social Security does not have a (percent)*# years formula. Even if you make anywhere from $40,000 – $105,000/year salary while working, you max out at roughly $25,000/year Social Security.
    ===
    They absolutely have formulas in SS you orange haired Colorado moron. And the SS max is $30K at age 67, not $25K. spension the dork claiming you can draw $25K per year in SS while only contributing $1 per year b/c they “have no formulas”…LOL. Beelz, this spension dork is dumber than a bag of rocks ;)

  79. Rex The Wonder Dog! Says:

    That only 2% of all *current* CalPERS beneficiaries are over $100K is interesting, but they probably receive 5% of CalPERS outlays
    ==
    That 2% has doubled every 5 years for the last 15 years, and that 2% takes up 20% of the CalTURDS pension expenses…. can you do math????………so all tha 2% has to do is double a few more times until it hits 10% and they will be taking ALL of CalTURDS $$$$$$ with no money left for anyone else. Man, spension= dumber than a bag of rocks

  80. Rex The Wonder Dog! Says:

    Here you go Beelz, this will make you chuckle;

    http://latimesblogs.latimes.com/lanow/2012/08/ousted-bell-police-chief-wants-severance-pay-.html

  81. spension Says:

    `roughly $25,000′ is, in my opinion, close enough to $30,000. They point is you never get close to the SS maximal taxable annual earnings, currently $110,100.

    I said there was not a (percent)*# years formula. There isn’t. I did *not* say SS used no formulas whatsoever. I never said they `have no formulas’. You are exaggerating, showing your usual carelessness, like, mistaking CalSTRS DC expense ratios and claiming they were CalSTRS DB expense ratios.

    My recollection is that SS has a much more complicated formula based on a your top 35 years of contributions, inflation corrected, and with 3 levels… if you worked for 35 years you get 90% or something of your first $9,000 or so per year, 32% of your yearly income between $9,000/year and $55,000/year, and 15% of your yearly income between $55,000/year and the max, $110,100/year.

    So this is like 3 tiers of (percent)*#years, the percent in the first tier is 2.6%, second 0.9%, and third is 0.43%., where the salary base used for the multiplication is not the last year or average of the last 3 years, but is a 35-year average with inflation. SS uses a far more rational system than the California pension systems use.

    However, SS is by and large not pre-funded (Ted pointed this out to me). More pre-funded than military pensions, which are completely pay-as-you-go… if you want to have fund, Rex, find out what the debt for future US military pensions is. Per retiree, it dwarfs anything in California.

    As for your comment that pensions over $100K cost 20% of CalPERS pension expenses, can you document that with a link to the real numbers?

  82. spension Says:

    I think US military pensions are currently paid at a pay-as-you-go cost of $80 billion/year. The present value of future liabilities, for which I think there are no pre-funded savings at all, are about $2 trillion. But you can’t get a military pension unless you’ve been in for 20 years.

    I absolutely believe we must pay those pensions. Curious, though, that no pre-funding is done.

  83. Beelzebub Says:

    Rex, Oh yeah….Randy Adams – Steve Cooley’s good buddy. :)

    Thank God there are some non-criminal city officials managing the City of Bell now who plan to fight Adams tooth and nail. I hope Adams ends up paying Bell’s attorney fees out of pocket. What a low-lifer. Do these people walk or slither?

  84. Beelzebub Says:

    Give it up, spension. You’ve been sniffed out and put to rest. Nothing you say makes a bit of sense. It’s like trying to understand somebody talking in tongues. Who does your hair, btw? Gumdrop the Dancing Clown?

  85. Theodore Steele IV,Adjunct Profesor Says:

    Beezyboob—– SPENSIONS slams you EVERY time– pay attention and learn little buddy!

  86. SeeSaw Says:

    Rex and Beeze, the type of vitriol that the two of you use is the reason that other news sites abandoned the open forums, and required all posters to use social media avenues. I never got into this for social interaction–when I retired I didn’t know that there was going to be a world-wise financial collapse, and I was going to have to be defending myself and all my former and current colleagues. Please don’t destroy the only open avenues that we have left for discussion.

  87. SeeSaw Says:

    Once a worker is retired, a certain percentage of the benefits come out of the investment earnings and the rest comes out of the donation accounts that were set up for the employee when he/she was active. I have checked with the officials at my former place of employment and they have told me that they do not make payments to CalPERS for my retirement now. I was told by the officials at CalPERS that my account would last 8-9 years. I also called CalPERS to see who pays my share beyond the investment earnings after my own account is empty. I was told by CalPERS that my former employer will pay the difference. CalPERS earnings are currently covering 64 cents of every benefit dollar–that amount is not covered by taxes. So, the continuing and unrelenting claims that the taxpayers, of which I am one, cover all the costs of the benefits for retirees is false. I have yet to have one commenter tell me how much they are paying out of their own funds for public pensions. I know what I pay in taxes: Sales taxes; permit fees; and personal state income tax, which is very reasonable here in CA; and property taxes which are also very reasonable here in CA. Come on someone–how much less in total taxes would you be paying, if the various government entities’ payments to pension plans ended?

  88. Rex The Wonder Dog! Says:

    seesaw, if you are unhappy here please leave.

    Thank you.

  89. Rex The Wonder Dog! Says:

    Teddy—– BEELZslams you EVERY time– pay attention and learn little buddy! :)

    Oh before I forget-the type of vitriol that you use is the reason that other news sites abandoned the open forums, and required all posters to use social media avenues. I never got into this for social interaction–when I retired I didn’t know that there was going to be a world-wide financial collapse, and I was going to have to be defending myself and all my former and current colleagues. Please don’t destroy the only open avenues that we have left for discussion.

    Thank you.

    The Readership :)

  90. Rex The Wonder Dog! Says:

    Come on someone–how much less in total taxes would you be paying, if the various government entities’ payments to pension plans ended?

    Billions……even trillions ;)

  91. spension Says:

    Hilarious comments from the guys who don’t know the difference between CalSTRS Defined Contribution system and CalSTRS Defined Benefit system. In their alice-in-wonderland, through-the-looking-glass world, the 1.22% expense ratios in CalSTRS DC system are *less than* the 0.17% expense ratio in CalSTRS DB system. They say, yes, 1.22 is *less than* 0.17. And then they claim, based on that absurd logic, that DC is cheaper than DB.

    Every time they make a post they subtract from the total of human knowledge.

    Seesaw, most likely you are in a pooled pension fund where contributions were made from both your employer, the State (maybe one and the same), and of course, you, while you were employed. Unless you also contributed to a DC plan, there is no pile of money with your name on it. The pooled pension fund was invested and by the time you retired, 2 or 3 times the total you and your employer was there, with the new money coming from investment returns. Then you started to get payments.

    The beauty of the pool is… folks who live long are covered by the money that was contributed for those who died younger. It is like insurance.

    The deficit that we talk about is the comparison of the money in the pool right now and the estimated total of all future payments out of the pool. Doing that well is a lot of work, and you only end up with an estimate. The big problem is that investment earnings go up and down a lot… down a lot in 2008-9. And so it looked like the pool needed a lot more money, and the state started having to contribute a lot more to the pool. This is the source of all the upset.

    CalSTRS isn’t able to ramp up the state payments, nor is UCRP.

    But the dollars you get come mostly from investment returns, next biggest source is state (or local agency) $ kicked in for your compensation when you worked, third biggest is your contributions, usually. There is little chance the pool will run out of money in your lifetime. But in the long run all the Cal pools will start running deficits.

  92. SeeSaw Says:

    I want to know how much less you would pay, personally, Rex. Your total, yearly personal liability to NASA when it was being federally funded, was one-half of one cent. I suspect that is similar to what every citizen in CA pays for pensions.

    I didn’t address Ted with my remarks, because Ted was not the object of my remarks. If you want to talk to Ted, use your own words!

  93. SeeSaw Says:

    Yes, there is Spension. CalPERS members get a statement every year telling them how much money has been contributed to their specific accounts. There are five options at the time of retirement–one option provides for refunding the balance of unused contributions to designated children, if the retiree and the beneficiary both pass. It was explained to me, that that particular option would not be a wise choice, because my own contributions would be gone in 8-9 years. A couple years ago, a subordinate of mine, who was a part-timer and on CalPERS, passed after his termination, and he had failed to notify CalPERS of any beneficiary. CalPERS tried very hard to find that person’s heirs so they could refund his contributions.

    I did have a DC plan in my own name, a 457, and I do know what a DC plan is–it is buying my groceries every month.

  94. Theodore Steele IV,Adjunct Profesor Says:

    spension and seesaw– well said—— the poor beezyboob……just cluless…seriously……

    call em as I see em

  95. Theodore Steele IV,Adjunct Profesor Says:

    God Bless ya Seesaw! You rock !

  96. Beelzebub Says:

    Did anyone notice that FaceBook stock has dropped all the way to $20/share? HAH! :D

    Remember all those fricken idiots who couldn’t wait to buy at $38/share when it was first introduced? HAH! :D

    So many people were buying that first day that the brokerage’s trading mechanisms froze up!!! HAH! :D

    Barnum was spot on. There’s another sucker born every minute!!! HAH! :D

    What about all those newpapers that went to facebook only comments??? HAH! :D

    More suckers!!! HAH! :D

  97. Beelzebub Says:

    If FB posts another loss for next quarter – they are fricken DONE!

    Put a fork in ‘em!!! HAH! :D

  98. spension Says:

    More non-sequiturs from BZ. Incapable of focusing on anything weighty and important.

  99. Rex The Wonder Dog! Says:

    Beelz, $5 billion of Clowns budget was based on FB captial gains taxes at $35 a share……so that means another 2.5 billion hit to the $16 billion budget deficit based on curent FB stock prices…..and Clown RAISED spending $8 billion over last year. What kind of fool does that in this environment, he should have frozen everything-all spending- and NO raises, but he gave the prison guards another 10% raise over 3 years while the budget is 25% in the red……..

    I cannot wait until Nov 6, that is when Clown and the trough feeder toadies are going to be slapped back into the stone ages…Saw Clown on TV again tonight claiming “education needs the tax increases”….blah…blah….blah, no one is buying that BS anymore

    BTW- did you see seesaws comment-she doesn’t want us posting here anymore..

  100. spension Says:

    Seesaw… very puzzling… doesn’t square with the concept of a DB pension not running out in the vested employee’s lifetime. The issue of pension payments continuing to spouses and children is very different, however.

  101. SeeSaw Says:

    It would not be the pension running out–it is the employer/employee contributions running out. After those contributions are depleted, the former employer stays on the hook for funds required, beyond the percentage paid from the investment earnings. The age of any beneficiary determines the total that is forfeited from the unmodified amount before the pension is calculated. The option I did choose will allow my spouse, if I pass first, to continue to receive the same amount I receive, as long as he is alive.

  102. The Gigantic Ted Says:

    Non sequiturs and child like posts are all beezyboob and rex the poodle have. Honestly they have no adult capacity for civil cogent comment..

    I rarely ever read their abusive posts of cut n paste speeches….nothing original and nothing worth a serious comment.

  103. Beelzebub Says:

    “Beelz, $5 billion of Clowns budget was based on FB captial gains taxes at $35 a share……so that means another 2.5 billion hit to the $16 billion budget deficit based on curent FB stock prices…..and Clown RAISED spending $8 billion over last year”

    I didn’t realize that, rex. Thanks for the heads up. What a full-blown certified moron. Clown has the state gov in hoc up to it’s hiney and is virtually dependent on the tax hike approval for solvency, yet is playing the markets and slapping down $billions$ on companies that were destined to fail from the start. The FB business model is broken. It’s another fad geared toward the kids. All revenue is advertisement generated. The fad will die just like it did with the others that went before it. The State taxpayers will AGAIN get caught holding the bag due to Clown’s impulsive and reckless behavior. Is he on drugs or something? Betting on FB is something a drug addict would do.

  104. Beelzebub Says:

    Teddy, you got a 2hp brain pushing a 10 ton mouth. You’re nothing more than a useful idiot on these boards. You always bring home a loser. If you told me the sun was going to rise in the west tomorrow morning I would double down it comes up in the east. Who would’ve known that that dumbest segment of our society would be collecting $100k plus gov pensions in 2012? Just another sign of the decline of an empire. I bet the gov slugs in Rome were treated like kings before it collapsed too.

  105. The Gigantic Ted Says:

    Fellow posters– See what I mean? Look at the above two posts from the beezyboob. Now, of course, I only skimmed them, but don’t they seem angry, confused and well……full of it?

    Now he’s all about Facebook…..lol

    Carry on little troll!

  106. spension Says:

    BZ, the guy who doesn’t know the difference between a DC and a DB pension system. If you kept your splooge to yourself, you would be far more convincing, BZ.

  107. Rex The Wonder Dog! Says:

    Teddy, you got a 2hp brain pushing a 10 ton mouth
    ===

    Beelz, you’re too kind to teddy :)

  108. Beelzebub Says:

    Of the bunch of them I think spension probably has the most brain cells since he understands the the gov pension system is a guaranteed failure without some major corrective action. His lapse of judgment is putting so much emphasis on expense ratios, which are a drop in the bucket compared to all the other costs that are factored into a pension. You’d think the guy would focus on formulas or entitled retirement age. You know, the meat and potatoes of the meal instead of the decorative parsley trimmings.

    I have no idea why Seesaw and Teddy support spension. From my understanding spension wants to demolish the pension benefit down to virtually nothing. Seems like Seesaw and Teddy should be livid with him. But they guard spension like an old mother hen and father rooster. I don’t think either are thinking too clearly these days. On second thought, Teddy never thought too clearly. So I guess that’s normal for him. :D

  109. Rex The Wonder Dog! Says:

    Teddy has cancer, or s he said on CWD, and he blames it on San Onofre. If true I have to lay off old Teddy Steals.

  110. SeeSaw Says:

    Since you are a misogynist Beez, you will probably start slapping yourself to learn that Spension is a female.

  111. Beelzebub Says:

    “Teddy has cancer, or s he said on CWD, and he blames it on San Onofre. If true I have to lay off old Teddy Steals”

    I don’t think so, rex. He might have said that he’s a cancer (astrological sign) and was born at San Onofre. I think his mom was a small particle nuclear fusion physicist and delivered during a meltdown drill. But I could be wrong. Maybe it was queeq that said that.

    As far as the disease cancer goes the most common form in males is prostate cancer. If you live long enough you’re almost bound to get it. Most is slow growing and even those who have it usually die from something else.

    There’s really only 2 things for us to worry about in life. We’re either in good health or we’re sick. If we’re in good health there’s really nothing to worry about. If we’re sick we
    either live or die. If we live there’s really nothing to worry about. And if we die we’ll be so busy shaking hands with or friends in hell that we won’t have time to worry.

  112. Beelzebub Says:

    “Since you are a misogynist Beez, you will probably start slapping yourself to learn that Spension is a female”

    spension is a woman?

    OMG. I take it all back.

  113. Rex The Wonder Dog! Says:

    OMG. I take it all back.

    Beelz, spension is not female, females do not use the word “spooge”….. :)

  114. Beelzebub Says:

    “Beelz, spension is not female, females do not use the word “spooge”…..

    Yeah, that’s a little nasty, isn’t it?

    I would expect that from one of those 900# operators. Those jobs offer 401-k’s, don’t they? :D I bet if the employer knew about the 401-k expense ratio the company would switch over to DB pensions. :D

  115. Rex The Wonder Dog! Says:

    :) Dont insult Teddy and seesaws chosen profession!

  116. spension Says:

    More non-sequiturs from posters BZ and Rex whose heads have such high vacuums in them that the need to wear carbon fiber helmets to stop the implosion.

    Of course I’m female. Jeez what does that matter. Doesn’t change the innumeracy of BZ and Rex, nor their posting about things they know absolutely know nothing about.

    Expense ratios are a *huge* deal, as is the longevity effect. It is numerical, mathematical truth. They cause DB systems to be almost 1/2 the cost, per retirement benefit, compared to DC systems. Yes I’ve given links and describe the math, and the ripostes from Rex and BZ have been pathetic.

  117. the Gigantic Ted Says:

    spension— what the two trolls don’t know about expense ratios, DDR deltas or innumeracy could fill the grand canyon.

    To be honest, they don’t truly even have a handle on the non sequitur.

    lol ™

  118. Beelzebub Says:

    spension. I would never have guessed. I would expect the obsession you have for expense ratios to come from a man who’s stuck on stupid. No wonder you can’t find your way out of the forest. You are tied to one tree.

    Teddy is stroking you. Outwardly he is showing support for you because you are arguing with rex and me. Inwardly he hates you for wanting to lower to pension formulas and increase the entitlement age.

    Know who you’re real friends are, spension. Seesaw and Teddy despise you. Somebody just needs to bump the phonograph to move the needle off stupid. That’s all.

    Rex and I are with you on most of what you say. But you need to pitch a tent in our camp to gain our full support.

    Rex and I have been doing this stuff for a long, long time. We know the drill. We can sniff bullshit a mile away. Trust our instincts. Don’t fight us. Follow us.

  119. SeeSaw Says:

    I respect both Ted and Spension–just plain pity for you and Rex.

  120. Rex The Wonder Dog! Says:

    Is spension is femalke she is a male in a female body-and very butch I bet :)

  121. Rex The Wonder Dog! Says:

    Teddy, the waves are calling you at an Onofre, get those water wings out buddy :) ….. and since you have been “surfing 30 years” I assume you can actually stand on the board ;)

  122. spension Says:

    Oh, I’m well aware of Ted. Remember that in the US the credo is `Greed is good’, but we tolerate that behavior in the private sector and denounce it in the public. I denounce it in both places.

    Remember the highest pension deals in California’s public sector do *not* go to union members. The greed is everywhere, not just from collective bargaining by unions but in the administrators on the other side of the table.

    The only sure defense is hard facts and math. I doubt anybody (public unions or public administrators) wanted the situation we are in now. For me the main culprit is bad math and careless work… because the greed is predictable. But I have no doubt that there were always careful actuaries in Sacramento who knew what was going to happen, and I’ll bet they were slapped down by the power-hungry.

    All the denouncing of people as `hogs’ etc leaves me cold. Nonetheless, benefits must be reduced, period. I know they are contractually guaranteed. But regular working people won’t ever vote for tax hikes to cover pensions like 3% at 50, or any pension over $100K. Sorry.

  123. Beelzebub Says:

    “Nonetheless, benefits must be reduced, period. I know they are contractually guaranteed. But regular working people won’t ever vote for tax hikes to cover pensions like 3% at 50, or any pension over $100K. Sorry”

    Now there’s your rational, objective left brain speaking, spension. This is the side of your brain that Teddy and Seesaw find disgusting, regardless of what truth it holds.

    We (you, me, rex) know what the problem is. We know where it is leading us. We know it’s inequitable and unsustainable. We simply have different ways of prioritizing, solving the problem and restoring balance.

  124. Beelzebub Says:

    Teddy probably surfs next to San Onofre by day then glows by night as he attends a local anti-nuclear power rally. :)

  125. the Gigantic Ted Says:

    Remember— ol Beezyboob was booted/banned from CWD board for hate/race speech– as you can see from his posts here, he is always on a sad angry name calling edge.

    He will probably implode here eventually.

    But

    Who cares?

    It’s hot in the single wide for him today…..

  126. Rex The Wonder Dog! Says:

    Beelz is not banned from CWD or anywhere else, he just isn’t posting there b/c they gave him a 3 day time out Teddy, for the race baiting YOU started :)

    Beelz, Teddy is destroying the CWD, him and his sock puppets, they won’t even ban the Teddy sock puppet accunts-we’re doomed over there :)

  127. Rex The Wonder Dog! Says:

    All the denouncing of people as `hogs’ etc leaves me cold. .
    Not me, makes me all warm and fuzzy on the inside :)

    Nonetheless, benefits must be reduced, period. Ya think ?????? ;)

    I know they are contractually guaranteed. Not in a BK world :)

    But regular working people won’t ever vote for tax hikes to cover pensions like 3% at 50, or any pension over $100K. Sorry.
    FINALLY spension says something that is intelligent, now if we could only get Teddy and his Granny GF seesaw the “sawz” to see the light…..seesaw, your comments on the sacbee are so shallow, do you really think anyone is going to buy them?? Nope :(

  128. SeeSaw Says:

    There is nothing on the ballot to vote tax hikes to cover pensions like 3% at 50 or any pension over $100k.

    Who cares, Beeze, but you are evidently reading them. Ha-ha–just can’t stand it, can you.

  129. Dr. Ted Steele Says:

    Thanks Poodle—just a temporary boot! GREAT !!! I will look forward to his return out there. I mean, we miss him and if he stops with the hate/race stuff we would embrace him back into the community of trolls. I can’t wait !!!

  130. Rex The Wonder Dog! Says:

    Beelz, see, Teddy wants you back at CWD too ;)

  131. Ted Steele, The Decider Says:

    We enjoyed humiliating Beezyboob every day.

  132. Beelzebub Says:

    Like most news related websites, CDW is a club that exudes a certain ideology. Now some schmuck like me shows up and starts bashing Wall Street, illegal immigration, the Libertarian Party, the Tea Party, unrestrained welfare payouts ……. heck, I had one foot out the door and the other one on a banana peel from the day I walked in there. CWD is a one song band. They do a great job on the political and gov scams but miss the boat entirely on all the other scams inherent in our society. Point those out and you end up being a target. You see, I take no prisoners. I have never been much of a joiner because all clubs forbid the members to point out the warts on the club’s nose. Once you do that you become an outcast. I have always had a problem keeping my mouth shut. But I fully accept the consequences that go along with it.

    The other night I was watching old Gore Vidal interview clips on the Charlie Rose Show. Teddy, you might be very surprised that I was sad to see him go, since he was often described as an avowed liberal. Vidal was one of the classic thinkers of our time. A very insightful man. That breed has all but left us. William F. Buckley was another. Diffferent ideologies, but thinkers nontheless.

    Vidal once said:

    “Always remember that it is of no consequence of what other people think of you. What matters is what you think of them. And that is how you live your life”.

    With that said, the reason I laugh at you for claiming that the pension system is sustainable comes down to simple math that a relatively intelligent junior in HS who paid attention in math class could figure out.

    The pension funds claim that they are capable of about an 8% ROI (rounded off). This means the asset value of their pension funds would double every 9 years.

    Based on the math, this assumes that the asset value would rise by a factor of 32 over 45 years. Hence:

    1 to 2 in 9 years.
    2 to 4 in 18 years.
    4 to 8 in 27 years.
    8 to 16 in 36 years.
    16 to 32 in 45 years.

    Preposterous.

    This means in Year 2057 the DOW would stand at 400,000 based on the today’s index of 13,000.

    Put down the pipe, folks.

    You system is in big trouble down the road.

    And it’s not all about you. It’s about the people who will be forced to clean up your mess and pay for your sins.

  133. Ted Steele, The Decider Says:

    Beezy– That was THE most cogent post I have ever read from you. Are you ok?

    Things will change/reform to keep the system afloat.

    I actually think you have reformed some since your boot from CWD and I applaud it! Keep it going. You never saw Gore or Buckly devolve into the limited rhetoric you pitch often.

    You are better when you’re less ignorant, rood, mean, dull witted etc etc.

    Your Troll Leader- Ted

  134. Ted Steele, The Decider Says:

    and now— I am off for a weeks vacation !

    Party on Trolls !!!!!!!

  135. Rex The Wonder Dog! Says:

    Teddy- are your sock puppets (Queeg+Uhaul) going on vacation with you???? ;)

    PS, don’t forget to pack those water wings lil buddy wouldn’t want anything to happen to our lil Teddy Steals.

  136. Rex The Wonder Dog! Says:

    With that said, the reason I laugh at you for claiming that the pension system is sustainable comes down to simple math that a relatively intelligent junior in HS who paid attention in math class could figure out.

    Beelz, come on, you know Teddy cannot do BASIC MATH, he failed grade school math miserably. Do you seriously think that anyone who claims the current system is sustainble with “change/reform” can do basic MATH??? Hahahahhahahahah…………….too funny. Oh wait, Teddy has two BA’s and a “graduate” degree……. ;)

    LOL….Teddy could not figur eout what 2+2= even if you spotted him the 4 ;)

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