Over the last 10 years CalPERS investment earnings are below the median among institutional investors. Are money managers being paid for poor performance?
In a feisty farewell last week, an outgoing CalPERS board member, Lou Moret, called attention to the below-median earnings as Wilshire consultants delivered a quarterly earnings report.
“Is this as bad as it looks?” said Moret, a gravel-voiced boxing referee leaving the California Public Employees Retirement System board this month after nearly four years.
Moret said that during his previous service on the Los Angeles Fire and Police Pensions board money managers with earnings below the median for three or four quarters were dismissed.
“We are glossing over this, and it looks horrible,” said Moret.
Delivering another jab, Moret reminded his fellow board members that CalPERS, the nation’s largest public pension fund, likes to regard itself as a leader among pension funds.
The report shows CalPERS earnings during the last 10 years, 5.4 percent, slightly below the Wilshire median for large funds, 5.7 percent, and a broader Wilshire median for institutional investors, 5.5 percent.
The CalPERS earnings for the last three years, 2.2 percent, are well below the three-year median for the two Wilshire measurements, 4 and 4.2 percent. But CalPERS earnings for the last year, 4 percent, are above the two peer groups, 2.4 and 1.3 percent.
Moret said it’s a problem if a CalPERS failure to take corrective action results in “giving the state a bigger number they have to come up with,” a reference to annual employer pension contributions.
In California public pension funds, investment earnings are expected to provide roughly two-thirds of the revenue. When earnings fall short of the target, the funding gap must be covered not by employees but by the employer with taxpayer funds.
A Wilshire consultant, Andrew Junkin, told Moret that a CalPERS portfolio heavily weighted toward international stocks is “probably swamping” the performance of managers.
Junkin said CalPERS corporate governance funds, after some poor performance, are doing better. He also said that CalPERS has scaled back active managers, relying more on passive management that tracks the market.
Janine Guillot, a CalPERS investment officer, said CalPERS “investment beliefs” limit “home country bias,” expecting greater long-term earnings abroad, and assume big U.S. stocks are efficiently priced, leaving little room for gain from active management.
CalPERS hired a new chief investment officer, Joe Dear, in January 2009. A new CalPERS chief executive officer, Anne Stausboll, had been hired a few weeks earlier in December 2008.
The new management was in place when CalPERS revealed in October 2009 that a former board member, Al Villalobos, received $50 million in fees from private equity firms seeking CalPERS funds.
A state lawsuit contends that a former CalPERS chief executive, Fred Buenrostro, who later went to work for Villalobos, urged CalPERS investment officers to give funds to Villalobos clients.
CalPERS had well-publicized real estate losses when the housing boom went bust, some advised by a firm later dropped by CalPERS. Under new management, CalPERS real estate is aimed more toward income such as rent, not speculative property.
A new CalPERS committee looks at risk management in investments and other operations. Hit by a sagging economy and market crash, CalPERS investments peaked at $260 billion in 2007, dropped to $160 billion and were $220.5 billion last week.
When Dear briefed the CalPERS board last week on economic trouble in Europe, board member Dan Dunmoyer asked if CalPERS will be able to hit its earnings target of 7.75 percent during the next decade and 8.5 percent in the following decade.
“Over 20 years I’m comfortable with our return target,” Dear said. “That’s long enough to ride through these cycles. On the short term, I think it’s going to be difficult, and I have said that. I was advised not to be so pessimistic on my point forecast.”
Dear said the next 20 years are likely to be different from the past 20 years. He said part of the evolving CalPERS investment strategy is a shift of focus from asset classes to risk factors.
“I’m confident that as we do this work, we will find a way to produce the returns that are necessary, even if we run the risk of being different than a lot of other pension funds who are pioneers in that effort,” he said.
Critics say optimistic earnings forecasts conceal massive pension debt and the need for higher contributions. Spending more money on pensions now as other programs are cut would be politically difficult and probably reduce public support for pensions.
A leading critic, former Assemblyman Joe Nation, D-San Rafael, of the Stanford Institute for Economic Policy Research, issued a new report last week analyzing shortfalls at CalPERS, the California State Teachers Retirement System and UC Retirement.
The report concluded that shortfalls remain under earnings forecasts ranging from the risk-free bond rate advocated by economists, 4.5 percent, to a very optimistic 9.5 percent. CalPERS and CalSTRS earnings would have to average 12 percent to close the gap.
“We estimate, for example, the additional cost of not fixing the state’s pension problem at $1.2 billion per year, roughly equal to the midyear budget cuts recently announced,” Nation wrote in a Sacramento Bee op-ed article. “And that figure will grow every day that they delay.”
Moret was chief operating officer of the Southern California Association of Governments for 15 years and a former Los Angeles public works commissioner. He also has refereed more than 100 professional boxing fights.
After Moret was appointed to the CalPERS board by the Legislature in February 2009, the Assembly Speaker at the time, Fabian Nunez, told the Los Angeles Times Moret was “an easy way out” as three union groups pushed different candidates.
In December 2008 Moret had paid $67,000 to settle a city of Southgate lawsuit in a probe of contracts steered to preferred bidders, the Sacramento Bee reported. A city treasurer said to be a Moret protégé and three others received prison sentences.
Another departing CalPERS board member, Tony Oliveira, an economist, told the board last week that an attempt to create a “service” economy here has failed, while moving jobs that “make products” abroad has helped emerging nations prosper.
“Until we decide to use technology and innovation to take back those jobs, our unemployment rate will never go back close to where it was before,” said Oliveira, a gubernatorial appointee representing local government on the 13-member board.
In the future, departing CalPERS board members may have a wider audience for their farewell remarks. CalPERS plans to join CalSTRS and a number of local pension systems who have been webcasting board meetings.
“We anticipate rolling out our webcast opportunity beginning at our February meeting,” the CalPERS board president, Rob Feckner, said last week. “The decision is yet another step in our commitment of transparency and accountability to all of those we serve.”
Reporter Ed Mendel covered the Capitol in Sacramento for nearly three decades, most recently for the San Diego Union-Tribune. More stories are at https://calpensions.com/ Posted 19 Dec 11
Wilshire shows CalPERS total fund slightly below 10-year median
Calpensions 
December 19, 2011 at 5:03 pm
The report shows CalPERS earnings during the last 10 years, 5.4 percent,
CalTURDS should use a discount rate somewhere between the 4.5% risk free and 1000 basis points or 1500 basis points hire, 5.5%, or 6% MAX.
December 19, 2011 at 5:03 pm
opppssss……………..*higher* 😛
December 19, 2011 at 5:06 pm
Dear said the next 20 years are likely to be different from the past 20 years
CalTURDS is returning 2.2% and this dork thinks the next two years is going to be different??????????????? HELLO CAPATIN OBVIOUS!
December 19, 2011 at 5:07 pm
CalPERS Lost 7% in the first quarter of this fiscal year, or a 17.5 billion dollar loss from the July 1 assets of 237.5 billion. Since assets are still at 220 billion the loss is 7% for the first almost six months of FY2011-12. CalPERS also hasn’t earned any of “their” expected 7.75% rate of return. Prorating that number adds an additional 3.65% (8.7 billion) to the CalPERS current year shortfall, for a total target miss of 10.65% (about 26 billion) to date.…The unfunded liability continues to grow and the cost cities are paying toward employee contributions is now twice the “normal cost” even though the smoothing policies have been extended out from 3 years in 2005, to 15-30 years today. What would those contribution rates be under the previous 3 year smoothing policy… Double?…Triple?
““We anticipate rolling out our webcast opportunity beginning at our February meeting,” the CalPERS board president, Rob Feckner, said last week. “The decision is yet another step in our commitment of transparency and accountability to all of those we serve.””
I’ll call that a nice first step (STEP 1) in what I hope is a more sobering 12 Step commitment to real transparency. So far the only things I’ve seen, while this agency is addressing criticisms, are: denial, deflection, and minimization.
December 19, 2011 at 6:14 pm
I’ve been wondering just how low the funding ratio (honestly calculated) will go BEFORE the actives realize that their contributions are simply going out the door the pay current benefits to retirees ….. leaving little left for them ….. and then DEMAND a big haircut for retirees. Certainly that will be WELL before the funds are projected to be deleted (in 30 years or so).
Any thoughts ?
December 19, 2011 at 6:34 pm
LOL– I love these whiners who can’t look at the cyclic averages! Cal pers will be fine——
December 19, 2011 at 10:01 pm
I love iditos like Ted Dork who thinks pensions are like mortgages and because the money is not due until 30 years from now they are “not broke” today 😛
December 19, 2011 at 10:04 pm
I’ve been wondering just how low the funding ratio (honestly calculated) will go BEFORE the actives realize that their contributions are simply going out the door the pay current benefits to retirees ….. leaving little left for them ….. and then DEMAND a big haircut for retirees.
LOL….it’ll never happen, the active employees are too stupid to know the facts-these are government employees we’re talking about after all.
They will believe whatever their union boss puppets tell them, like these are “contracts” and that taxes wil l”have to be raised”…hehehehehehhehehehe. Fat chance.
Browns taxes are DOA and even if they were to pass they are a bandaid when open heart surgery is the cure……
December 19, 2011 at 10:05 pm
CalPERS also hasn’t earned any of “their” expected 7.75% rate of return. Prorating that number adds an additional 3.65% (8.7 billion) to the CalPERS current year shortfall, for a total target miss of 10.65% (about 26 billion) to date.…The unfunded liability continues to grow and the cost cities are paying toward employee contributions is now twice the “normal cost” even though the smoothing policies have been extended out from 3 years in 2005, to 15-30 years today. What would those contribution rates be under the previous 3 year smoothing policy… Double?…Triple?
Come on Cap, the scammers will not listen to the truth, it interfers with their fraud 🙂
December 19, 2011 at 10:42 pm
Ok little buddy !! Merry Christmas !!! lol
December 19, 2011 at 11:04 pm
Anything that happens in a time interval less than about 30 years is irrelevant and only leads to jawboning as well as confidence swindles by phony investment advisors. But the worst case rate of return for a combination of stocks and bonds over 30 years is not much different than the risk-free rate. And that is the big point missed by CalPERS etc.
Counting on the taxpayer to make up the difference between worst case and average case is politically untenable.
Additionally, all the CalXXXX funds in one way or the other did not return the *excess* rate of return in the past 30 years to the taxpayer in some manner.
But no matter what side you see these things from, the investment `experts’ are just confidence people. Far easier, better, more ethical, better long term returns, etc to just put everything in index funds… avoid the $50 million kickbacks etc from private equity funds that try to bilk pensioners.
December 19, 2011 at 11:09 pm
But no matter what side you see these things from, the investment `experts’ are just confidence people. Far easier, better, more ethical, better long term returns, etc to just put everything in index funds… avoid the $50 million kickbacks etc from private equity funds that try to bilk pensioners.
All great points!
December 19, 2011 at 11:12 pm
Teddy, where has your GED girlfriend Sawz been at the last few days?? Did you two have a DV issue again??????????????
December 19, 2011 at 11:17 pm
spensions— all good points but index funds? I don’t think that would have put calpers on such a good footing for lo these 9 decades, jawboning notwithstanding!
And you hit the nail on the head about “being politically untenable”. This of course is the reason both our state and fed constitution have a contracts clause! To stop executed agreements of commerce going into the winds of whimsy and political expediency is EXACTLY what the founders thought! They stopped that process and power of the British monarchy. God Bless em bedrock Constitutional law!!!!!!!!!!!!!!!!
Carry on!
December 19, 2011 at 11:18 pm
DV issue? LOL– I respect the seesaw waaay too much little fella!
December 19, 2011 at 11:19 pm
type NOW slave troll! lol
December 19, 2011 at 11:33 pm
Spension,
“Counting on the taxpayer to make up the difference between worst case and average case is politically untenable.” That doesn’t appear to be the case. The “normal cost” for public safety is about 16%, yet the payments are on average 32%. Those are CalPERS numbers. Where I come from the payments (employer contribution) are 34% and the city pays the employee share of 9%.
“But the worst case rate of return for a combination of stocks and bonds over 30 years is not much different than the risk-free rate.” Fair enough. What are your thoughts on the CalPERS projections of “earnings target of 7.75 percent during the next decade (current)and 8.5 percent in the following decade.”?
Spension, do you have any concerns regarding the following statement attributed to Dear: ““Over 20 years I’m comfortable with our return target,” Dear said. “That’s long enough to ride through these cycles. On the short term, I think it’s going to be difficult, and I have said that. I was advised not to be so pessimistic on my point forecast.”
Saying your comfortable to “Ride through the cycles” doesn’t instill confidence when the overall CalPERS fund is probably only 65% funded as of today, many local government plans are are in far worse shape than the state, and many of those plans are funded between 50-60%. It’s tough to watch the unfunded liability continue to grow while your city is busy paying twice the normal cost, doesn’t have a plan to cover retiree medical, and CalPERs only plan is to extend payment terms to infiniti in order to perpetuate the myth of affordability.
It takes a 100% gain to recover from from a 50% loss and we’re almost there. And, of course, that doesn’t do anything to satisfy the expected rate of return. Any thoughts?
December 19, 2011 at 11:37 pm
Spension, Interesting comment (above).
You said …”Counting on the taxpayer to make up the difference between worst case and average case is politically untenable.”
On the contrary, while such is grossly unfair to Taxpayers, under the current political “system” run by politicians only concerned with a continuation of campaign contributions, it is “politically untenable” to do anything OTHER THAN what they are doing today … continuing the excessive pension and benefit promises to their paymasters ..the Public Sector Unions.
Unfortunately, in the end-game, the workers will take the biggest hit when these promised pensions and benefits go unpaid.
December 20, 2011 at 12:56 am
T love— for the record, when do you predict calpers will not pay retirees? Date please?
December 20, 2011 at 1:19 am
Ted, Civil question, so I’ll answer you.
It really doesn’t matter whether cuts come from benefits or pensions, only that taxpayer obligations stabilize. As such, it is much more likely cuts come from retiree healthcare subsidies first, as doing so (in the nutty State of CA.) is much less problematic.
I’ll will take a guess at pensions … COLA cuts within 5 years (unless the market smiles upon us in a BIG way … quite unlikely). W/o a smiling market, a significant reduction in the rate of pension accrual for future service for current workers in 5-7 years, possibly combined with a shift to DC Plans for new and short-service employees.
Actual haircuts beyond freezing the COLAs for those already retired will be last on the list. If/when that comes, the USA will likely have bigger issues to deal with than CA’s pensions. No timing prediction here.
December 20, 2011 at 1:33 am
Well— that is a fairly well reasoned prediction— we will see. I agree that if much of that happened the US will have furious commerce/econ issues. No national equity /bond market;period, depression, civil unrest etc etc etc– I don’t se it at all…….
…and, sir, I am ALWAYS civil. Good day!
December 20, 2011 at 1:51 am
T love— for the record, when do you predict calpers will not pay retirees? Date please?
Teddy Steals, can I play 🙂
I’ll will take a guess at pensions … COLA cuts within 5 years (unless the market smiles upon us in a BIG way … quite unlikely). W/o a smiling market, a significant reduction in the rate of pension accrual for future service for current workers in 5-7 years, possibly combined with a shift to DC Plans for new and short-service employees.
TL, I can tell you EXACTLY when San Diego will cut pensions for current workers, it will be June 12, 2012, the next election when Prop is passed by a 4-1 margin;
http://www.10news.com/news/29923857/detail.html
BAM!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
December 20, 2011 at 2:06 am
Ted, with all due respect, it doesn’t appear you have much to contribute. “I don’t see it at all”, “cal pers will be fine –” , “contract clause”, sound like empty remarks from a person whose only concern is that their own pension is secure. The dynamics of what we are facing extend well beyond yourself.
Why don’t you step up and actually say something about the overall impact these unfunded liabilities will have on current workers, jobs, and taxpayers, services, roads,education, etc…?
December 20, 2011 at 2:07 am
Quite possible Rex, but the cuts will be tied up in the Courts for years, likely with actualo cuts on hold until resolution.
Never underestimate the determination of a greedy Civil Servant.
December 20, 2011 at 2:08 am
…and the need for constantly increasing taxes, fees, and bonds.
December 20, 2011 at 3:15 am
Will it go to court- you bet-the trough/teddy feeders will do everything they can to stop their gravy train. And in 10-12 months hte court case will be over and off to appeals, Another 18 months later that will be over and then 30 days for the Supreme Court to turn it down. 2-3 years take them one day at a time.
Bring it on, if this happened in 2005 we would be 3-7 years ahead of the curve/
December 20, 2011 at 5:36 am
Cap– I have said plenty of substantively out here over the years— but I found that after the 5th repeat of all of you it’s a dull form repetition. The one thing that appears absolute and for certain and worth repeating ovr and over again…. is the impact of what is a vested contract right and the proscriptions in the law from intentional interference–vis, the contract clause. I am sorry friend but I am still waiting for ANY case or statutory authority trumping it???? And since this is a nation of laws we all know this will be settled etc…where??…..wait for it………….IN COURT.
In the mean time, if nothing is contributed to cal pers it won’t run dry till 2049—- I remain unconcerned because we all know some measure of reform is enroute which will lower costs in time……and we all know lots will be contributed into the fund and the fund will make its return rate……nite nite little fellas!
December 20, 2011 at 5:41 am
Oh Cap ! By the way— While I know he’s not the sharpest tool in the box out here, what with all of his missed predictions, bad punctuation and well general ignorance, I did assign the Poodle a bit of homework months ago— he has yet been unable to cite any case or statutory authority from any jurisdiction in the US abrogating the use of the contracts clause in the case of executed pension contracts…..to date all he can do is cut n paste etc……lol
December 20, 2011 at 7:15 am
In the mean time, if nothing is contributed to cal pers it won’t run dry till 2049—- I
If contributions stopped today CalTURDS would run dry no later than 2019. Probably even sooner. Nice try GED Wonder.
Now, like Cap said, you really don’t bring much to the table here except your same old parrot talking points from your GED “brothers” and PUBLIC union bosses.
December 20, 2011 at 7:53 am
Teddy,
“is the impact of what is a vested contract right and the proscriptions in the law from intentional interference–vis, the contract clause. I am sorry friend but I am still waiting for ANY case or statutory authority trumping it????”
Nobody is trying to take away already earned pensions, except maybe in Rhode Island – and now many others are probaly looking at those options as well. To your point, I haven’t read any court ruling that supports your ridiculous belief that any right extends beyond the expiration date on a contract. I do understand that some people, and orgaanizations, have repeated this mantra so many times they believe what they say, as you seem to do, but I think this repeated argument amounts to the legal valididty of an Old Wives tale.
I say let’s take this issue to court and settle the argument once and for all. For that I would agree to support a sales tax to fund the legal costs.
There is an interesting NY Times article coming out this AM. Why is CalPERS threatening lawsuits that will be funded with taxpayer money? Isn’t that the unions role, or do the unions have so much influence over CalPERS that they’ve convinced the independant agency to spend the taxpayer money instead of their own?
December 20, 2011 at 3:10 pm
Captain, Unfortunately for Taxpayers, the CA judges who will adjudicate such issues are participants in the same or similar Plans. I find it very difficult to believe such judges will (for example) approve a reduction in formula benefits for Future years of service for current workers.
CA must sink into the depths of despair before it can be fixed.
December 20, 2011 at 4:14 pm
I find it very difficult to believe such judges will (for example) approve a reduction in formula benefits for Future years of service for current workers.
That question has never been put before the judiciary, I think it would pass the test, and future benefits could be cut.
December 20, 2011 at 4:17 pm
Nobody is trying to take away already earned pensions, except maybe in Rhode Island – and now many others are probaly looking at those options as well. To your point, I haven’t read any court ruling that supports your ridiculous belief that any right extends beyond the expiration date on a contract. I do understand that some people, and orgaanizations, have repeated this mantra so many times they believe what they say, as you seem to do, but I think this repeated argument amounts to the legal valididty of an Old Wives tale.
Excellent point Captain. There is NO contract for future years, only for past service years (and the present contract).
Teddy is a mouthpiece, nothing more, pay no attention to the dork behind the green curtain.
December 20, 2011 at 4:34 pm
Well, Tough Love, when I want to point a finger at how we got this political system, the answer is still the same as it ever was, `We the people’. And in a way, the US (and California) are facing a true test of whether a nation so conceived and so dedicated can long endure. The alternative these days is… China. They’ll build our high speed rail, or, we’ll return to horses and buggies.
Captain, either higher contributions should have been consistently made (well, CalSTRS actually *did* make very regular contributions… but CalPERS and especially UCRP thought they could time the market…), or, lower benefits consistent with something closer to the risk free rate should have been the formula.
Ted Steele, in the long run index funds outperform just about every investment strategy (even Warren Buffet says this now). And sure, there is a contract clause. The only way I see out is sovereign default, as many nations have successfully implemented. States in the 1800’s totally reneged on their debt, never, never paid at all. Let’s just bite the bullet and get on with it. Firing many of the cops and teachers to pay the retirement of other cops and teachers is not much of a government. Go through sovereign default for the State & Counties, and reorganize all the cities and special districts, pay all debts at 60 cents on the dollar or whatever, and move on, don’t burden our children with our mess.
Thanks Rex.
December 20, 2011 at 5:56 pm
Oh God bless you guys you are a legal mess! Don’t know where to start so I won’t! Obviously Cap you have not read the pension cases….or just don’t understand the law– it’s ok. Re vesting beyond k periods and the k clause with pensions—- good luck!
As for the poodle– It’s hard to be happy after the junior high drubing he gave me….but I will soldier on!
Merry xmas lads!!!
December 20, 2011 at 7:19 pm
Don’t know where to start so I won’t!
Yes, we know you don’t have a clue, tell us something we DON’T know 😛
December 20, 2011 at 7:21 pm
The only way I see out is sovereign default, as many nations have successfully implemented. States in the 1800′s totally reneged on their debt, never, never paid at all. Let’s just bite the bullet and get on with it. Firing many of the cops and teachers to pay the retirement of other cops and teachers is not much of a government. Go through sovereign default for the State & Counties, and reorganize all the cities and special districts, pay all debts at 60 cents on the dollar or whatever, and move on, don’t burden our children with our mess.
This is EXACTLY what will happen, a 50-60 cent payment on the dollar, the money is just not there and never will be at the escalation rate of these $10 million pensions.
December 20, 2011 at 9:26 pm
Rex, You’re missing spension’s point. He ONLY supports reneging on a portion of the pension/benefit promises if (and only if) we ALSO renege on an equal percentage of gov’t bond debt.
While I have little vested interest in such bond default, the consequences of bond default is much more serious than reneging on gov’t pensions … as the ability to borrow will shut closed for quite some time, and few gov’ts can function w/o borrowing (even if only to manage uneven cash flows).
Besides, given the collusion between the Public Sector Unions and the politicians who approved these grossly excessive pensions, reneging on a substantive portion if it has a nice feel to it (speaking as a Taxpayer not riding this gravy train but yet being forced to pay for it).
December 20, 2011 at 9:59 pm
Sov Default— bwahahaha– ok ok ok—— I have shot that down for you boys legally so many times I will just refer you to prior posts….but wait…
I would LOVE to get a date prediction on that —– when will Cal go into a SD???
LOL— Hurry!!!
December 20, 2011 at 10:28 pm
Ted, It depends on how you define “sovereign default”.
Recall that NYC “defaulted” on it’s bond interest obligations in the 1970’s (although ultimately all principle was paid … but deferred) but the powers that be got away with calling it a “moratorium”.
And Illinois is $5-$10 billion (now YEARS) behind in paying it’s bills for products and service already provided. Many would call this a default, but I suppose, until a creditor gets fed up and presses the issue in COURT, the word “default” will not yet be used.
I’ll take a shot at that “SD” date …… within in 3 years, many cities (perhaps the entire State of CA) will be far far behind in paying it’s bills, just like Illinois. When it will actually be labeled …????
December 20, 2011 at 11:41 pm
in 3 years, Calif? Is that your final answer? Not sure what you mean by “perhaps”..
December 20, 2011 at 11:56 pm
Sov Default— bwahahaha– ok ok ok—— I have shot that down for you boys legally so many times I will just refer you to prior posts….but wait…
Two words GED Wonder, CENTRAL FALLS!!!!!!!!!!!!!!!!!!!!!!!!!
Man!, it never gets old slapping lil teddy Steals around like he is my lil chew toy 🙂
December 20, 2011 at 11:59 pm
Rex, You’re missing spension’s point. He ONLY supports reneging on a portion of the pension/benefit promises if (and only if) we ALSO renege on an equal percentage of gov’t bond debt.
Rhode Island passed a law before Central Falls filed BK putting bond holders in front of everyone else, and I do not think that is legal per the BK code where everyone is supposed to be treated equal. I am wondering of that was stipulated to by the public unions. Vallejo should have gone after CalPERS and the pensions, and sooner or later that will happen on CA and Central Falls will be the legal authority to give pensions haircuts in publi pensions.
I have not problem with everyone taking the same haircut.
December 21, 2011 at 12:03 am
in 3 years, Calif? Is that your final answer? Not sure what you mean by “perhaps”..
He means San Diego which is teetering on BK you GED fool. In June 2012 the entire San Diego city will b going to 401K’s, except police, and that is the begining of the end for you trough feeding piglets.
December 21, 2011 at 12:04 am
lol Poodle– you live in such a simple world! Merry xmas little troll!
December 21, 2011 at 12:05 am
Poodle—- He said “perhaps” California….. what Part of that do you think means San Diego? ! Bam-lol—oooouch!! weeeee this is easy!
December 21, 2011 at 12:10 am
Poodle– that post a few up is pretty loaded with strange grammar and bad punctuation again… are you drinking and posting again like you did on the OCR site til they kicked you off? No judgement here, I am just worried about you little buddy????
December 21, 2011 at 1:07 am
Yes Ted, … within in 3 years, many cities (perhaps the entire State of CA) will be far far behind in paying their bills, just like Illinois is today.
Will it actually be labeled a SD ?
I don’t know …. but does what you “call it” really matter ?
December 21, 2011 at 1:48 am
YES– What YOU call it matters of course. It’s a bk of course for non sov’s and the attendant rules are restrictive and wide open (well sort of…) with a SD for a sov gov…….but i was just curious about you, and if you were making a PREDICTION about the State of Cali– you aint—- I get it……I wouldn’t either because it won’t happen…..Have a nice day !!
December 21, 2011 at 3:38 am
Teddy, how did that backhand slap feel chump 😛 ?
December 21, 2011 at 3:39 am
Hard to be happy after that mean comment from tiny poodle boy! But I will try! Merry Christmas !!!
December 21, 2011 at 3:42 am
…and remember folks– like it or not–
For every dollar paid in pension benefits over the last 20 years the vast majority came from investments:
Investment earnings 66 cents
Employer contributions 21 cents
Member contributions 13 cents
beats a 401k any day!
December 21, 2011 at 5:04 am
Ted, Nice try …… more disinformation ……
There are only 2 sources of contribution towards public sector pensions, those of employees and those of the Taxpayers. Investment earnings are NOT a source of funds but simply derives from the timing of cash flows from the 2 real sources (the employees and Taxpayers).
Assuming the 21 cents from taxpayers and 13 cents from employees is an accurate split, then 21/(21+13) = 62% of the total contributions are from Taxpayers … AND correspondingly, 62% of those investment gains would have stayed in the Taxpayer’s pockets in the absence of these excessive Plans.
And to be fair, once the unfunded liabilities are factored in (100% an obligation of taxpayers) the 62% contribution from taxpayers is more likely 80-90%.
Not a surprising result at all because anyone with some math abilities can easily show that all employee contributions (WITH Investment earnings) accumulated to retirement can rarely buy more than 10-20% of the promised pension. The Taxpayer contributions (and the investment earnings thereon) pay for the 80-90% balance.
December 21, 2011 at 5:16 am
Oh TL….you are playing a lost semantics game——merry xmas!!
December 21, 2011 at 5:18 am
220.5 bil— and 66 cents of every dollar! Sorry !
December 21, 2011 at 7:35 am
…and remember folks– like it or not–
For every dollar paid in pension benefits over the last 20 years the vast majority came from investments:
Investment earnings 66 cents
Employer contributions 21 cents
Member contributions 13 cents
And for every dollar a trough feeder contributes in the taxpayers put in $50.
December 21, 2011 at 7:37 am
Assuming the 21 cents from taxpayers and 13 cents from employees is an accurate split,
it is not an even split= for the most part local muni’s pick up ALL of the employees contribution, or nearly ALL of it.
In the FEW cases where the employees does put in their share it is about 20%, as in public safety, employee puts in 9%, muni puts in 45%.
December 21, 2011 at 7:38 am
$220 billion, suppsoed to be at $360 billion, only short 50%
December 21, 2011 at 7:39 am
Not a surprising result at all because anyone with some math abilities can easily show that all employee contributions (WITH Investment earnings) accumulated to retirement can rarely buy more than 10-20% of the promised pension. The Taxpayer contributions (and the investment earnings thereon) pay for the 80-90% balance.
TL, don’t confuse Teddy Trough Feeder with facts 🙂
December 21, 2011 at 5:31 pm
Wow Poodle—-you hate the facts….like the fact that at the market’s lowest point in 2008, CalPERS assets had dropped by $100 billion. Today CalPERS has regained $70 billion and in September, its market value of assets was $235 billion (221 or so now). In the last 24 years, CalPERS has had 20 years of positive returns, 16 of which were 10 percent or greater. It goes up and down little fella—-relax! and…….Merry Xmas!!!!!
December 21, 2011 at 6:07 pm
Poodle says– “This is EXACTLY what will happen, a 50-60 cent payment on the dollar, the money is just not there”..
LOL– yet another famous poodle prediction!!!!!
Please give us a date!!
December 21, 2011 at 6:12 pm
Poodle says– “$220 billion, suppsoed to be at $360 billion, only short 50%”
LOL Poodle math! kinda fuzzy little buddy! Maybe your cell mate has a calculator you could borrow? lol
Merry Xmas! Have a nice day!!
December 21, 2011 at 6:14 pm
hurry Poodle—- type now— I guess I owe you a rent check for living in your head!!!
December 21, 2011 at 7:21 pm
Teddy, I have owned you every which way-as has everyone else here………so keep on living your Fantasy lil loser.
December 21, 2011 at 7:22 pm
BTW Teddy, don’te get fired from that GED job at Folsom, you will never get hired above minimum wage anywhere in the real world and you will miss your shower scene excitement.
December 21, 2011 at 7:23 pm
Poodle says– “This is EXACTLY what will happen, a 50-60 cent payment on the dollar, the money is just not there”..
LOL– yet another famous poodle prediction!!!!!
Please give us a date!!
2015, no later 😛
December 21, 2011 at 7:27 pm
Wow Poodle—-you hate the facts….like the fact that at the market’s lowest point in 2008, CalPERS assets had dropped by $100 billion. Today CalPERS has regained $70 billion and in September, its market value of assets was $235 billion (221 or so now).
Hey GED Wonder. CalTURDS should be at $360 billion today if they had hit their 8% (now 7.75%) doscounted rate, but in 2008 they lost 36%. So do the math GED Wonder, 360 – 220 = $140 BILLION! So CalTURDS is short 65% ($220B+$140B=$360B you math challenegd fool!)
Oh brother, this is so easy, like taking candy from a Teddy…errrr…baby 🙂
December 21, 2011 at 8:06 pm
Well…looks like Baby Teddy ran off again 🙂
December 21, 2011 at 8:57 pm
LOL Poodle!! Nice job—- quick typing!!! Merry Christmas from deep inside your head!!!
December 21, 2011 at 10:31 pm
If Ted Steele is arguing that Arkansas, Louisiana, Michigan, Mississippi and Florida, all of which defaulted in the 1840’s have had to go back and pay there debts, I’d like to see the court cases that support his argument.
True that I support the same haircut for all debt holders. I don’t hold any promise to be better or stronger than any other promise. Yup, would be a fiscal nightmare, exceeded only by the nightmare of shutting everything down to pay the pension and other indebtedness.
Will government by the people, of the people, or the people survive all that? I don’t know. But the die is already cast.
December 22, 2011 at 2:23 am
If Ted Steele is arguing that Arkansas, Louisiana, Michigan, Mississippi and Florida, all of which defaulted in the 1840′s have had to go back and pay there debts, I’d like to see the court cases that support his argument.
LOL…Teddy STeals has a Junior High educational level. He also doesn’t know anything about the 11th Amendment-states are IMMUNE form lawsuit in both state and federal courts. You cannot sue them. They can default on anything they want to and there is nothing ANYONE-including the federal government-can do about it.
December 22, 2011 at 2:45 am
Teddy, where do I send htis months rent check for camping out inside your head 🙂
December 22, 2011 at 4:18 am
Hey fellas, consider this….mmmmmmmm…..Investment earnings pay the majority of the costs of public pensions. For every dollar paid in pensions, 64 cents comes from investments.
Public employees pay for pensions as well. Each month State employees contribute a percentage of their paychecks toward their pension. Through agreements so far, State employees are paying 2-5 percent more out of their paychecks toward pensions for a total of 8-10 percent each month. This has saved California up to $400 million. In addition, more than 175 local governments have decreased pensions for new hires.
December 22, 2011 at 4:34 am
Ted, maybe you missed the part that disputes the CalPERS responds position. The 400 million in savings were offset by the 600 million in increased cost. That may be savings in the micro sense – but it is an increase in cost in the macro. And while those 400 mil in savings may continue the increased costs of the 600 million are accelerating rapidly.
December 22, 2011 at 4:51 am
Cap– Are you talking about John Sieler’s goofy and debunked comments on Watchdog??????
snore time amigo….
December 22, 2011 at 5:15 am
Cap– if it’s something else– pls give me a cite– I’ll go read it and return with a response….hey— se ya after the holidays– have a good one! — Ted!
December 22, 2011 at 5:22 am
No, Ted. What do you think about these comments on the CalPERS website? The “CalPERS Responds” site seems a bit unresponsive to their own members questions – kind of ironic if you think about it. Two members were responding to the Stanford Study, with no response from CalPERS:
mikeinriverside Posted On : Wednesday, Dec 14, 2011 (1 week, 15 hours, 4 minutes)
My observation, around the end of June the fund was over 240 billion. That was were the 21.7% fiscal year return comes from, since June the fund has lost around 15-20 billion (depending on the markets on a given day). As a Calpers member I certainly hope that by June of 2012 the fund is well north of 240 billion! 260 billion would be a great figure around an 8% gain, but a long shot, if Europe does not get its act together.
frankliemydear Posted On : Tuesday, Dec 13, 2011 (1 week, 1 day, 1 hour, 9 minutes)
Question about this statement: “As of the most recent fiscal year end, the Fund earned a 21.7 rate of return and gained back $60.8 billion from the recent 2009 low of $181 billion. CalPERS assets currently stand at more than $224 billion.” If CALPERS gained back $60.8 billion from a low of $181 billion, wouldn’t that give a balance of $241.8 billion? So has the fund recently lost $17 billion to bring the balance down? I don’t understand the numbers, but we need to be able to defend the facts.
It’s been over a week and “CalPERS Responds” hasn’t even responded to their own members comments. BTW, what do you think of those comments?
http://www.calpersresponds.com/issues.php/stanford-pension-study
December 22, 2011 at 6:00 am
How do you know they haven’t responded, Captain? I have sent two questions to CalPERS, through my own CalPERS account, and they have responded, by calling me, in person.
December 22, 2011 at 6:04 am
The CalPERS bottom line, goes up and down with the market. That’s the only answer, that would be available to the second commenter. As far as the first commenter goes, he/she is just making a statement. We all hope that the bottom line is higher, by June, 2012.
December 22, 2011 at 6:43 am
SeeSaw, “CalPERS Responds” is open to the public. The comments are open to the public. It is only logical that they would respond to comments, from their own statements, on their own “CalPERS Responds” website. “CalPERS responds” isn’t very responsive. Is that troubling to you also?
From the article: the CalPERS board president, Rob Feckner, said last week. “The decision is yet another step in our commitment of transparency and accountability to all of those we serve.”
Lip service doesn’t mean anything to me. The fact that CalPERS can’t even respond to their own “CalPERS Responds” website is a better indication of how shallow their effort at transparency IS/Has BEEN!
If you take issue with my comments maybe you should send them to “CalPERS Responds” and see if you get a response. Maybe you have more clout than the two responders that have waited over a week.
December 22, 2011 at 7:10 am
“The CalPERS bottom line, goes up and down with the market. That’s the only answer, that would be available to the second commenter. As far as the first commenter goes, he/she is just making a statement. We all hope that the bottom line is higher, by June, 2012.”
Finally some transparency – a hope and a prayer based on increased risk using taxpayer dollars. I hope you are right but, like the two posters that responded to “CalPERS Responds” I have some VERY serious reservations regarding CalPERS ability to return what amounts to an over 20% return the next six months. The problem is really much worse than the CalPERS target but I’ll leave it at that for now.
December 22, 2011 at 7:26 am
I fail to see why any response to these two comments is necessary, in a pubic forum. CalPERS and its respective members have every right to communicate, on a one-to-one basis.
December 22, 2011 at 7:49 am
SeeSaw, I’ll bet John Corzine told all his client …. “not to worry”, … “everything will be fine”.
Merry Christmas.
December 22, 2011 at 8:41 am
“I fail to see why any response to these two comments is necessary, in a pubic forum. CalPERS and its respective members have every right to communicate, on a one-to-one basis.”
SeeSAW, I believe you believe that and that is part of the problem. Maybe “CalPERS Responds” should become a super-secret organization with an elaborate hand-shake for entry into the inner circle. Or maybe “CalPERS Responds” should just do the right thing and respond to the concerns of their members, and the public that are financing this PONZI SCHEME (Jerry Brown). It is “CalPERS Responds” BTW.
If there is nothing to hide why is this organization hiding behind a false sense of transparency, ridiculous assumptions, crazy smoothing policies, and people like you (“the truth squad”) that they’ve thrown in front of their critics as a FIREWALL.
I think you should be asking CalPERS staff the questions that I’m asking you. If you want to respond yourself maybe you ask to run the CalPERS Responds website. Over the past several months there has only been three comments, two of which I’ve posted. Hard to believe all those comments have gone unanswered even given furlough days and the 500,000,000 million dollar computer glitches.
Transparency shouldn’t just be a buzz word! Transparency shouldn’t just be something a consultant tells CalPERS to incorporate into communications. Transparency needs to be a part of the CalPERS culture. CalPERS gets a D from me – and I’m being generous.
December 22, 2011 at 9:19 am
I am not a participant in the pension truth squads, which are sponsored by, “Californians for Retirement Security”, or the CalPERS-sponsored Ambassador Program. CalPERS has not thrown me at anything. I am a member, and beneficiary, of CalPERS. I don’t think it would be too cool, of CalPERS members, to start participating on public comment forums, by bashing their, “Bread and butter”.
December 22, 2011 at 9:40 am
Ah yes, the circle the wagons mentality. I’m not a PR person but I did take a couple of classes. Your approach wasn’t the recommended strategy.
“I don’t think it would be too cool, of CalPERS members, to start participating on public comment forums, by bashing their, “Bread and butter”.”
It sounds like you’re advocating censorship. The comments I posted had nothing to do with bashing, bread, or butter. Just two members posing legitimate questions on their CalPERS website – and still no response. What is wrong with employees voicing their concerns?
December 22, 2011 at 9:59 am
Sheesh! If I have a particular question or problem, regarding my CalPERS benefits, I go into my own account, and ask them my question. I have done that twice, and they have responded to me, by phone, twice. Neither CalPERS, or I, are under any requirement, to discuss, my own CalPERS concerns, publicly. I realize they are having huge problems, with the new computer system, and I certainly would not try to contact them, right now. You probably saw the comment from the member, whose benefits were wrongly terminated, by CalPERS–I would assume that they are going to sraighten out her account and, hopefully apolologize to that member. But, I doubt they will be doing it, on public formum. It has nothing to do with censorship.
December 22, 2011 at 10:05 am
I am not a PR person either, and I did not take any PR classes. I am simply participating, on a public comment forum–not doing PR, at the behest, of CalPERS. If I were to join the CalPERS, Ambassador Program, I would take the training, and then I would learn, what would be, the, “recommended stratedgy”.
December 22, 2011 at 10:27 am
Their questions had nothing to do with an individual account. Their concerns were regarding CalPERS own numbers. Specifically, the concerns mentioned the 21.7% return claim made by CalPERS.
If CalPERS assets on July 1, 2010 were 201 billion, and they earned 21.7% (244.6 billion), why did they end the year with only 237.5 billion? One of the posters mentioned he hoped the June 30, 2012 numbers would be 260 billion, but didn’t think it possible. Considering current assets of 222 billion I agree with him.
I would like to know why a CalPERS return of 21.7%, on 201 billion in assets, falls seven billion short of the equation. Can you answer the question for all three of us:?
December 22, 2011 at 6:17 pm
I, frankly, am not an investment officer or an actuary. I get a check every month, and I am satisfied that CalPERS is taking care, of its membership, and that the other members of the taxpaying public are not suffering over pension costs. You should notice that CalPERS allows for comments at the end of its response. It says nothing about pledging, to respond publicly, to such comments.
I know that the State and its employees and over 200 local and county entities have amended their respective pension plans over the past year.
I pay the same taxes that you and others pay, and I don’t know what specific amount, of those taxes, is going to pensions–I suspect it is such a small amount, that it is laughable, to worry about it. People like yourself, should be concerned about the 25,000,000 people in this country, who are out of work–I certainly am. I don’t think there’s any way, you can pin that situation, on CalPERS.
December 22, 2011 at 6:36 pm
You know, as well as I, that the CalPERS bottom line goes up and down, with the market. There is no big mystery, about it. Just because it is $240 billion in June, doesn’t mean it will be higher, in December. Fact is, it has lost about 18 billion, due to those market ups and downs.
I have a personal, 457b, that was set up. for me, by my former employer, while I was active. It lost $10,000 in the June-Sept. quarter, of this year, and gained $6,000, in Oct. That type, of situation, shows why no employees, public or private, should ever be stuck with 401k-type plans, as their sole pension sources.
December 22, 2011 at 8:33 pm
SeeSaw, The ONLY reason Public Sector workers have these rich DB Plans is because the 15% of workers who are Civil Servants have, via their Unions, colluded with politicians (in exchange for campaign contributions and election support) to approve WAY WAY WAY more than necessary to attract and retain competent workers.
So tell me … with taxpayer contributions (and the investment earnings thereon) paying for 80-90% of the VERY rich Public Sector pensions …. exactly where is the money to come from to provide equal pensions for the the 7x greater number of Private Sector workers ?
Certainly not form the PUBLIC Sector workers.
So perhaps you’re suggesting that while WE pay for YOURS, WE should also pay for OURS.
If not, who ?
Bottom line …. you talk nonsense …. trying to justify the ridiculously excessive pensions afforded Public Sector workers only because until mow you have been successful in ripping the Private Sector Taxpayers off royally.
That’s changing FAST … hold on for the ride, as you will likely not like it.
December 22, 2011 at 10:55 pm
How many times have you written the same thing, TL–100?
I received a DB pension plan, long before there was ever a union group, at my workplace. It does not take a union, to get a pension. I pay my taxes, just like you pay yours, but I worked for 40 years, and earned the difference, between what we both pay, and what I receive. And, furthermore, I have had to forfeit the spousal share, of SS that other spouses, of SS annuitsants, receive. So there! I do not have to justify anything to you, or anyone else.
Merry Christmas and Happy Holdidays!
December 23, 2011 at 12:51 am
I don’t agree with TL about unions being the only source of pressure for high pension benefits… I don’t think City Managers or Special District officers or Prison Dentists or UC/CSU administrators are unionized, but they get nice pensions.
I think years of bull market caused plan managers to get overconfident… so they started reducing contributions and increasing benefits with abandon. When the bull market gave amazing returns, some politicians like Pete Wilson threatened to remand funds from `overfunded’ pension funds which did encourage the behavior mentioned before… a `use it or lose it’ attitude on every union and pension managers part.
In the end I’ve always thought the only % funding criteria that mattered was: imagine today is September 3, 1929 (the peak of the market at that time). Then imagine the stock market follows a course just like what happened after Sept. 3, 1929. Compute what your pension fund’s situation in % funded for *that* future.
The worst % funded in *that* future should be reported. If it is 100%, only then should benefits be increased, contributions decreased, or money remanded.
We didn’t do that, we used a way too optimistic present value computation. And we’ve learned the flaw: no taxpayer in a bad economy (like that now) wants to make up the difference between assumed market performance and actual.
December 23, 2011 at 4:22 am
SeeSaw, You and I will never Eye-to-Eye on the need for or fairness of the amount of Public Sector pensions.
As to SS, the gov’t (not me) calls the SS provisions that reduce those benefits you refer to as “windfall elimination” provisions for good reason …. they are designed to (appropriately) “eliminate” an unjust “windfall”. Hence the name.
If you read-up on it instead of just complaining, you would understand the reasoning behind it.
December 23, 2011 at 4:45 am
Spension–that public sector managers, get nice pensions, is an understatment. My former CM gets six times, more than I–I am not complaining–just stating the facts. And you are right–the high-amount pensioners, are usually non-union.
And, to say that the unions and the employees collude, to bribe politicians, for votes in return, as TL, does, is a complete fairy tale.
Merry Christmas and Happy holidays, to all, on this thread.
December 23, 2011 at 5:29 am
And, to say that the unions and the employees collude, to bribe politicians, for votes in return, as TL, does, is a complete fairy tale.
seesaw, your”e truly delusional.
The ONLY way a GED or HS educated rank and file employee could ever get $200K in compensation is through collussion, and then ONLY in government, if that ever happened in the real world where the laws of supply and demad apply the company would be BK in 1 hour.
December 23, 2011 at 5:32 am
I don’t agree with TL about unions being the only source of pressure for high pension benefits… I don’t think City Managers or Special District officers or Prison Dentists or UC/CSU administrators are unionized, but they get nice pensions.
How many CM’s are there in a city??? ONE.
How many cops and FF’s??? How many sheriffs in a county??? Tens of thousands.
Public unions are onpy part of the problem- it is COLLECTIVE bargaining in the public sector where there is NO COMPETITION and quid pro quo money from those public unions that is the real problem, with $$$$ going into the back pockets of the Bill Lockyers who in turn give back 1,000,000 times more in OTHER PEOPLES MONEY.
December 23, 2011 at 5:37 am
You know, as well as I, that the CalPERS bottom line goes up and down, with the market. There is no big mystery, about it. Just because it is $240 billion in June, doesn’t mean it will be higher, in December. Fact is, it has lost about 18 billion, due to those market ups and downs.
Actually seesaw, CalTURDS should be at $360B TODAY, not the $220B it is today-So CalTURDS is going DOWN, not going “up and down”, it is $140B DOWN, and will never reach the funding level it should be, it will continue to go down because the $170K AVERAGE pensions going out every year going forward will depelte the funsd within 20-30 years.
So here is the deal seesaw, if you trough feeders want $10 million pensions for GED ff’s at age 50 fine, but it is coming out of your pockets-the little peopel at CalTURDS, not taxpayers. YOU back stop it. Not us. There, now how does that sound?
December 23, 2011 at 5:38 am
$70K average pensions going forward, now $170K.
December 23, 2011 at 5:40 am
That type, of situation, shows why no employees, public or private, should ever be stuck with 401k-type plans, as their sole pension sources.
So WE should have to pay YOUR losses, but not the other way around, hugh seesaw. When investments LOSE money SOMEONE has to pick up the slack baby Einstein. Money doesn’t grow on a magical money tree.
December 23, 2011 at 8:35 am
That’s right–stay classy there,Rex.
December 23, 2011 at 2:17 pm
On the 401k… per dollar contributed, DB provide more benefits than 401k. Unfortunately the carelessness of everyone running public sector plans (too little contributions, too optimistic future gains, benefits raised too high) including union pressure, administrator pressor, general innumeracy, etc… have given DB a bad name. It is really tragic… the trashing of DBs is a lose-lose situation.
But the fault is with those who mismanaged and exploited the DB systems.
December 23, 2011 at 5:38 pm
That’s right–stay classy there,Rex.
😛
Stop whining seesaw, seriously, you are such a baby 😛
You are ripping off everyone in this state, and when YOUR fund dips you want US to make up the difference, but when OUR fund dips you do NOT want to make up the difference. You can’t have it both ways-seriously.
If you and CalTURDS want to ride the casino wave of big bets then YOU have to make up the losses when the dice comes up snake eyes, not the public which is already comping less than half the public sector comp and receiving 1/10th the average CalTURDS pension for those currently retiring, which is $70K.
This is the no spin zone!
December 23, 2011 at 5:40 pm
On the 401k… per dollar contributed, DB provide more benefits than 401k.
No, they do not, not when the fund managers are putting the fund money in wild crazy and speculative bets that can destroy the fund. If they were investing risk free in US T’s then you would be correct, but NOT when the CalPERS and STRS are betting the house on real estate, commodities, equities and hedgefunds. Oh, and giving giant pensions that exceed the amount thye actually earned while working, most of it retroactively granted as in SB400.
December 23, 2011 at 7:00 pm
Pension enhancements have been retroactively granted, in the State of CA, for 98 years, Rex–of course I have only told you that, about 500 times. Don’t worry your sad-sack, self, anymore, about retroactive upgrades–doing away, with that practice will be one, of Brown’s 12 points, which will be incorporated, in the pension reform Bill, that the Legislature will take up, in 2012.
December 23, 2011 at 7:34 pm
Who’s the serious spinner here, Rex. That group of recent, CalPERS retires, who average $70,000, probably consists of about ten former managers.
From the CalPERS website, “Facts at a Glance”:
Average monthly service retirement allowance all retirees: $2,332
Cut the crap, Rex–or better yet, get a life!
December 23, 2011 at 8:12 pm
No, they do not, not when the fund managers are putting the fund money in wild crazy and speculative bets that can destroy the fund. If they were investing risk free in US T’s then you would be correct, but NOT when the CalPERS and STRS are betting the house on real estate, commodities, equities and hedgefunds. Oh, and giving giant pensions that exceed the amount they actually earned while working, most of it retroactively granted as in SB400.
Rex, you are right, any badly managed pension fund, whether the common pot in a DB, or a badly managed 401k, will come to woe.
That woe is not a consequence of being a DB or being a 401k, however, it is a consequence of bad management.
I think if identical investment choices and contributions are made for a DB in one case and for a 401k for each member in a second case, more pension benefits per member will be available from the DB.
Sadly the mismanagement in the CalXXXX systems has turned people against DB.
December 23, 2011 at 8:25 pm
The main thing, that has turned people against DB pensions, is the global, financial situation, causing 25,000,000 people, in the U.S., to be unemployed, and politicians like GAS, and the media, turning the scapegoating, spotlight on public sector workers–the only middle class group, left, holding up the economy. Prior to, Sept. 2008, how many articles did you see, ragging on public sector workers, and their pensions? I don’t think this website even existed.
You continue to write about how mismanaged CalPERS is–what would you do, to change the managment style, of the DB plans? Of course, I should not have asked that question, should I? Because, you want to see them all default. Well, I don’t have that much time left, in my life. CalPERS and the State of CA, will default, over my dead body!
December 23, 2011 at 9:16 pm
I will correct my mis-statement, on the origination of this site, before anyone else does–it was 2005.
December 23, 2011 at 9:18 pm
Who’s the serious spinner here, Rex. That group of recent, CalPERS retires, who average $70,000, probably consists of about ten former managers. .
No seesaw, your nose just grew 200 feet with that Pinnochio whopper of a lie. THE AVERAGE CalTURDS reitree who is CURRENTLY retiring-the AVERAGE is $70K-EVERYONE, not “10 former managers”…….why do you lie so much seesaw???? That is the AVERAGE, tens of thousands.
You need to go back top the sac bee website and post those whoppers where there are more trough feeders such as yourself 😛
December 23, 2011 at 9:20 pm
The main thing, that has turned people against DB pensions, is the global, financial situation, causing 25,000,000 people, in the U.S., to be unemployed,
The main thing that has turned the real work force against trough feeder pensions is that they are “retiring” at age 50 with $10 million pensions, 3-20 tiems more than they made while actually working, 20 times more than the prople paying for them-and the fact that the employees only pay about 5% of their pensions.
December 23, 2011 at 9:23 pm
Average monthly service retirement allowance all retirees: $2,332
Average monthly pension for currently retiring Calpers retirees=$70K;
From the CalSTRS Annual Report, page 135:
CalSTRS participants who retired during the 12 months ending June 30th, 2010 (the most recent data), earned pensions as follows:
25-30 years service, average pension $50,772 per year.
30-35 years service, average pension $67,980 per year.
35-40 years service, average pension $86,736 per year.
From the CalPERS Annual Report, page 151:
CalPERS participants who retired during the 12 months ending December 31st, 2009 (the most recent data), earned pensions as follows:
25-30 years service, average pension $53,182 per year.
30+ years service, average pension $66,828 per year.
December 23, 2011 at 9:24 pm
BTW-for local 1937 act pensios it is $15k higher= $86k annual pensions on AVERAGE.
December 23, 2011 at 9:25 pm
seesaw, either you are really really dumb, or you know you are lieing thru your teeth on the current average Calpers pensions for people who are retiring today-and retired the last 2-3 years.
December 23, 2011 at 11:11 pm
OK, Rex, how many retirees are in each of those cherry-picked groups, you are quoting? The $2,332 figure, is the average CalPERS pension, for the 500,000+ current recipients. In the grand scheme of things, all those totals add up to the amount, that CalPERS pays out every year. I have never been one to tell lies, and I didn’t need to drum up a lie, to give you that average, because it is a cut and paste, from the CalPERS website. You will see it in the, “Facts at a Glance”, section. Go-ahead–bring that up, and see for yourself–then contact CalPERS, and tell them that they are lieing through their teeth!
December 24, 2011 at 1:37 am
SeeSaw said:
Prior to, Sept. 2008, how many articles did you see, ragging on public sector workers, and their pensions? I don’t think this website even existed.
You continue to write about how mismanaged CalPERS is–what would you do, to change the managment style, of the DB plans? Of course, I should not have asked that question, should I? Because, you want to see them all default. Well, I don’t have that much time left, in my life. CalPERS and the State of CA, will default, over my dead body!
There is not doubt that Wall Street grossly mismanaged lots of stuff that helped incite the fall, 2008 crash. The only problem is ever thinking that investing in Wall Street would not result in that type of crash.
There were plenty of criticisms of the granting of extra pension benefits (like 3% at 50) prior to 2008.
The mismanagement consisted of programming in high rates of return without contemplating the worst case. 30-year periods of much lower return rates than CalXXXX have assumed have happened in US history, and CalXXXX’s only contingency for a recurrence of bad returns was to grab more State funds.
What should have been done differently was assume only 4 or 5% returns, never allow contribution holidays, just lock in contributions at, say, 5% employee and 10% employer, and keep benefit promises on the safe side.
I don’t `want to se them all default’. The CalXXXX systems induced default by mismanagement, and assuming California Tax moneys were an infinite source of support for innumerate pension promises. It is CalXXXX that have left us no choice.
December 24, 2011 at 2:37 am
Prior to, Sept. 2008, how many articles did you see, ragging on public sector workers, and their pensions? I don’t think this website even existed.
There were MANY websites and people whpo were ALL over this scam going back to 2000, and the ONLY reason many did not knwo about the pension scam was because CalTURDS hid the costs and they were unknown at that time.
December 24, 2011 at 2:42 am
OK, Rex, how many retirees are in each of those cherry-picked groups, you are quoting? The $2,332 figure, is the average CalPERS pension, for the 500,000+ current recipients.
#1-I am using FULL CAREER public employees, not ones who only worked for 2 or 3 years like you are including. FULL Career, even though 30 years is only 60% of a career in the real world.
#2- This is the group to focus on because these are what the current (and future) costs will be, not some janitor who retired in 1969 on an annual salary of $6k. We are not paying pensions going forward on 1969 janitor salaries.
The $70K is ALL EMPLOYEES who put in 30 or more years, and retired within the last 2 years-that is not cherry picking because it includes EVERYONE, fulltime janotors, fulltime teachers, fulltime secretaries, fulltime cops….you try to game the number by including people who only worked 6 months……..
December 24, 2011 at 2:45 am
What should have been done differently was assume only 4 or 5% returns, never allow contribution holidays, just lock in contributions at, say, 5% employee and 10% employer, and keep benefit promises on the safe side
EXACTLY. As and you have agreed, the high multipliers-like anything ABOVE 2%- and retroactive increases should have never been allowed.
I agree with this, if the discounted rate was reasonable, 5% with 2% multipliers, and NO holidays and EVERYONE contributed then we would not have a problem. But we all knwo thta is not what happened.
December 24, 2011 at 3:19 am
All employees who put in 30 or more years and retired within the last two years, are a cherry-picked group, within all of the employees, who retired during the same time-frame. How many were in the group of 30 or more years, compared with all of the employees, who retired at the same time?
Stop being ridiculous……..one may not retire on Cal Pers with six months service, or even two, or three years. The minimum requirement, for a vested pension, is five years. Who retires with only five years? You can see, yourself, on the CalPERS website, that the average length of service, for all miscellaneous retirees, is 20 years. I’m not the one who set this chart up–this all comes from the CalPERS website.
I had 36.4 years service credit, when I retired, and I am a long way south, of $70,000. CalPERS pays out approximately 12 billion dollars, per year, in retirement benefits–that includes all the retirees–not just a select group, who had 30 or more years, credit.
December 24, 2011 at 4:32 am
SeeSaw, You fail to see the problem (or see it, but fail to acknowledge that it is a BIG problem … that needs to be addressed not with baby steps, but with steps that call for at least a 50% reduction in the accrual rate for future service):
You said …”All employees who put in 30 or more years and retired within the last two years, are a cherry-picked group”.
If you compare THAT group with an equal group of Private sector retirees, you will undoubtedly find that the value of the Public Sector employees’ pension upon retirement is usually about 4x (6 times for safety workers) that of the Private sector workers. And with Public Sector worker contributions (WITH investment income) rarely paying for more than 10-20% of their pensions, the unfairness of this structure is unquestionable.
Is it that you don’t see it, or just couldn’t care less ? To say you do care, and say they (Private Sector workers) should have the same pension, but put blinders on ignoring the fact that there is no way (or no one) to pay for it, it NOT an answer.
December 24, 2011 at 5:28 am
I am just a retired public worker, at this point. I will leave it up to the, “Powers-that-be”, to determine what must be done, about the pension accruals, going forward. I think the decider, on what should be done, will be determined by the Courts.
My argument, regarding pension amounts, is that there were probably thousands of retirees, in the years 2009-2010. The numbers being bandied about by Rex, et al, are misleading, in that, they are trying to spin the idea, that all retirees, in the targeted period, receive an average retirement benefit of, close to $70,000. In my mind, the thing that matters, is the average retirement amount, using the total number of retirees, for that period–not just the average pension for the people who retired, at that time, and had 30-year+ careers. The huge pension amounts, that are received by the elite managers, are certainly important, personally, to them. What is important, to the public at large, though, is the fact, that the average pension amount, for over 500,000+ current beneficiares, is $2332/mo.
There you are, back on the subject, that public sector pensions are better, than private sector pensions. I have answered your past charges, that I don’t care, about that fact, by reminding you that my spouse, and all my friends and relatives are from the private sector. Yes, I care. I think all workers, public and private, should have DB pensions. I think the government should be doing something, about the 25,000,000+ Americans, who are currently unemployed, too. I’m a people lover. There is no way you are ever going to discredit me, when it comes to the amount of concern I have, for others.
As to the question, of whether or not, the DB pensions systems, will be sustained, is not a problem, to solved, by me, unless the Principals who administer my pension, tell me differently. I played by the rules, that were set before me, and I am currently receiving my pension, according, to the rules. If the day should come, that I have to be concerned, I will depend on CalPERS to tell me. I will do whatever is required of me, at that time. It is not up to you, or Spension, or anyone else, to determine how I should react, or what I should do.
December 24, 2011 at 5:40 am
Sorry, cant respond right now “Santa Paws” is on the Disney channel.
December 24, 2011 at 6:12 am
My argument, regarding pension amounts, is that there were probably thousands of retirees, in the years 2009-2010. The numbers being bandied about by Rex, et al, are misleading, in that, they are trying to spin the idea, that all retirees, in the targeted period, receive an average retirement benefit of, close to $70,000.
Nope, the numbers I posted are for full time employees with 30 years in. The bogus numbers you post try to infer that 30 year employees are averaging $2K per monht, when it is really 3 times that for F/T employees-$6K per month.
December 24, 2011 at 7:01 am
Not at all, Rex. I know that there is specific group of retirees, who retired in the fiscal year, 2009-2010, who had 30+ years of service, and the average retirement amount, for the individuals in that group is, close to $70,000. But, that group, is one, among a larger group, of thousands of people, who retired, at the same time, with less than 30+ years service. All I am saying is that the average monthly benefit, for all current beneficiares, of CalPERS, is $2332, month. An average is a number that is in the middle of the total amount paid out–half of the retirees make more than the average amount, and half of them make less. I personally, am in the above average group, and I make less than $70,000. That’s all I’m saying. Stop accusing me of posting bogus numbers! All the numbers, I post, are from the CalPERS website. The only number that should matter, to the public, at large, is the bottom line. How much money does CalPERS have, and how much does it pay out, yearly, in total benefits? (Its just like a median home price, isn’t it. If the median home price, in a specific area, is $200,000, you are probably going to see some homes, that cost over a million dollars. That same method is used to quote pension-benefit amounts. The median CAlPERS benefit amount, is $2332/mo. What is so hard to comprehend about that?)
December 24, 2011 at 7:20 am
seesaw, I cannot have this conversation with you, you just dont get it.
You are sounding exactly ike your boyfriend Teddy Steals……….
December 24, 2011 at 7:50 am
Quoting SeSaw ..”All I am saying is that the average monthly benefit, for all current beneficiares, of CalPERS, is $2332, month. An average is a number that is in the middle of the total amount paid out–half of the retirees make more than the average amount, and half of them make less.”
A bit of a math lesson is in order…
SeeSaw, CalPers average of $2332 is the mathematical “mean” (the sum of the monthly retirement payout divided by the number of retirees). What you described above is the mathematical “median” ….. the mean and the median are not the same calculation.
December 24, 2011 at 7:54 am
Ok. I can stand to be corrected. I think you get my point though.
December 24, 2011 at 7:57 am
SeeSaw, you said …”The only number that should matter, to the public, at large, is the bottom line. How much money does CalPERS have, and how much does it pay out, yearly, in total benefits? ”
I disagree, if by the public at large, you mean Taxpayers, what should matter to them is that they (a) have on the Public Sector payroll the minimum # of employees needed to to effectively render the services, and (b) are paying a competitive total compensation for those services.
In my opinion we have far more than the needed # of employees, and their total compensation is far too high (primarily via their grossly excessive pensions) … when compared to their Private Sector counterparts.
December 24, 2011 at 8:22 am
Well, we need to leave it to the experts, then. I certainly do not want to see the economy downgraded, by cutting wages of workers, public or private, and lowering the amount of money, that flows into it. Maybe the private sector should start doing a little reorganizing. Surely those multi-million-dollar CEO’s could take a little less, in order to upgrade the status of the subordinate peons, could’nt they.
December 24, 2011 at 8:37 am
Why must you make such cheesy aspersions, when all we are trying to do, is to have dignified conversations, Rex. If I were to know Ted, in person, I suspect that, agewise, I could be an acquaintence, of his grandmother’s. And, we both know his name is not Ted. I suspect that he is doing far more fruitful things, with his life, than you are.
December 24, 2011 at 1:55 pm
SeeSaw said “Surely those multi-million-dollar CEO’s could take a little less, in order to upgrade the status of the subordinate peons, couldn’t they.”
Here we agree. While the very wealthy struggle mightily not to pay more taxes they never mention that CEO pay has, over the past 30 years, increased from about 20 times that of their average worker to 300-400 times.
Clearly taxes on the wealthy and on corporations should be increased.
December 24, 2011 at 1:55 pm
Merry Christmas & Happy New Year !
December 24, 2011 at 9:19 pm
Ditto–to everyone.
December 24, 2011 at 11:55 pm
A bit of a math lesson is in order…
SeeSaw, CalPers average of $2332 is the mathematical “mean” (the sum of the monthly retirement payout divided by the number of retirees). What you described above is the mathematical “median” ….. the mean and the median are not the same calculation.
Actually I think the $2332 is the mean, not the median, according to Bill Lockyer anyway.
December 24, 2011 at 11:58 pm
Why must you make such cheesy aspersions, when all we are trying to do, is to have dignified conversations, Rex. If I were to know Ted, in person, I suspect that, agewise, I could be an acquaintence, of his grandmother’s. And, we both know his name is not Ted. I suspect that he is doing far more fruitful things, with his life, than you are.
Seesaw, why do you freak out at- and try to wreck- my little jokes 😛
BTW-I have never seen you make the same comments to YOUR BOYFRIEND Teddy Steals when he makes those “cheesy aspersions” about me, which is in every post of old Teddy Steals!
Grow up seesaw, time to put on your big girl pants 🙂
December 25, 2011 at 12:00 am
I hope Disney channel plays the “Santa Paws” show again tonight 🙂
December 28, 2011 at 9:07 pm
rex poodle—small troll!