How pensions pass the buck to future generations

A surprising reason dissident actuaries advocate using a much lower earnings forecast for public pension investment funds is “intergenerational equity,” ensuring that the pensions of government workers are paid by the generation that receives their services.

A recent paper by the dissidents does not mention the usual criticism that pension earnings forecasts are too optimistic, not likely to be achieved, and hide massive underfunding. When the earnings forecast is lowered, pension debt or the “unfunded liability” goes up.

For example, the “California Pension Tracker” website shows California public pensions in 2013 with a debt of $281.5 billion when a typical 7.5 percent earnings forecast is used. Drop the earnings forecast to 3.7 percent and the debt soars to $946.4 billion.

The paper’s authors are dissidents because they follow the principles of mainstream financial economics, not standard actuarial practice, when they advocate a risk-free earnings forecast to discount debt for guaranteed pensions, something like a U.S. Treasury bond.

“Our analysis seeks to maximize efficiency and preserve intergenerational equity,” said the paper issued by the dissidents last August. “We conclude that full funding based on default-free discount rates is efficient and fair across generations.”

With little or no risk of loss, investments with predictable yields could closely match the cost of pensions workers earn during a year, minimizing debt passed to future generations. But that would be costly. The yield on the 20-year Treasury bond last week was 2.2 percent.

The $300 billion diversified CalPERS investment portfolio, about half in stocks, is expected to earn an average of 7.5 percent. But after huge investment losses, CalPERS is 68 percent funded with a $139 billion unfunded liability being paid off over 20 to 30 years.

The dissidents contend that under the basic public finance principle of intergenerational equity, each generation should pay for the services it receives. So, for example, the cost of a police officer and a police station should be financed differently.

The total compensation of a police officer, pay and pension, should be paid for out of the current operating budget. But the cost of a newly built police station can be paid off over time because, unlike the officer, the station will serve current and future generations.

Intergenerational equity is not a new notion. When the state briefly delayed contributions to CaPERS, an appellate court ruled in 1997 that orderly payments are needed to ensure an actuarially sound system to assure pension payments and “intergenerational taxpayer equity.”

The concept got a recent boost from new Governmental Accounting Standards Board rules for reporting pension debt. Investment losses should be paid off over five years and other actuarial changes should be paid off over the average time workers will remain on the job.

The “average remaining service life” the California Public Employees Retirement System calculated for its more than 2,000 state and local plans is four years. The California State Teachers Retirement System calculated an average remaining service life of seven years.

Ways to improve pension intergenerational equity have been suggested. A well-known pension expert, Girard Miller, suggested a transition beginning with a 20-year amortization or payment period and slowly moving to the average remaining service life.

A Pensions & Investments editorial (“Intergenerational Fairness, June 27, 2016) said public pension boards should have a representative of future generations and adopt the private-sector pension policy of paying off unfunded liabilities over seven years.

“Future generations must be protected from decisions contracted against their interests by the current generation. Keith P. Ambachtsheer in his book, ‘The Future of Pension Management,’ published this year, calls for a legal mechanism to secure such protection,” said the editorial accompanied by this cartoon.

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The paper by the dissident actuaries emerged from a joint task force of the American Academy of Actuaries and the Society of Actuaries. The authors are Ed Bartholomew, Jeremy Gold, David G. Pitts, and Larry Pollack.

The paper written by long-time advocates of financial economics principles did not pass a peer review by the two actuarial groups and was not published, drawing criticism in the financial press. The Society of Actuaries released the paper later.

The main dispute is whether the principles of financial economics that apply to the rest of the world’s financial activities, including the capital markets, should also apply to public pension debt.

Traditional actuaries say pensions are an exception to financial economics because there is no regular market where pension debt, with complex risks such as longevity, is bought and sold.

Dissidents say there are other financial tools that can determine pension value and estimate the additional cost of a complex risk. The calculation may be less precise, but it’s not something that can’t be done.

Traditional actuaries tend to focus on avoiding budget-jolting shocks in the annual contribution rates that government employers pay for pensions, less on the debt or unfunded liability created when the rates and investment earnings fall short of the annual target.

Reformers and critics grounded in financial economics view a pension unfunded liability as a bond-like debt that must be paid off. Actuaries have a different view, citing another reason that pensions are an exception: Most governments can’t go out of business, unlike corporate pension sponsors.

“I’ve spoken with numerous public-sector actuaries and plan administrators whose unshakeable mindset has been that their plans are perpetuities and therefore it’s reasonable to defray accumulated pension deficits (unfunded liabilities) over extended periods that have no relationship to the lives of the retirees and current workers,” Miller, the pension expert, said in a Governing magazine column on March 8, 2012.

That mindset resulted in the “open” or “rolling” amortization used by some public pensions to pay off unfunded liabilities. The debt is refinanced each year and theoretically might never be paid off, unless booming investment markets produce a period of full funding.

CalPERS has used “rolling” amortization in addition to spreading gains and losses over 15 years to avoid employer rate shocks and “smooth” contributions. It’s radical smoothing, far beyond the typical public pension smoothing period of three to seven years.

In a switch to a more conservative actuarial method resulting in a large employer rate increase, CalPERS adopted “direct rate smoothing” three years ago that pays off gains and losses over 30 years, with rates going up in the first five years and down in the last five years.

Actuaries want pension systems to be moving toward full funding, but getting there is not like paying off a bond. It’s only a projection over decades that employer-employee contributions and the forecast of investment earnings will cover projected pension costs.

CalPERS was 101 percent funded in 2007 and only 61 percent funded two years later in 2009. Heavy losses during the recession and stock market dropped the CalPERS investment fund from $260 billion to about $160 billion.

Not only is full funding a kind of mirage, when as with CalPERS risky investments are expected to cover two-thirds of pension costs, but it also can create political pressure to spend the “surplus” by cutting contributions and increasing pension benefits.

“Relatively small surpluses provide a cushion for benefits being earned (valuation timing) and for emerging gains and losses,” said the dissidents’ paper. “Large surpluses become fodder for the political process, with the current generation likely to increase benefits and/or take funding holidays.”

During the high-tech boom in the late 1990s, all three of the big state pension systems spent their funding “surpluses,” large and small, by cutting employer contribution rates and increasing pension benefits. (See Calpensions post, “What went wrong” 10 Jan 11)

Now despite a lengthy bull market since the recession, CalPERS as noted earlier is only about 68 percent funded. Experts say if funding drops below 40 percent, raising rates and earnings forecasts high enough to project 100 percent funding may become impractical.

Last November CalPERS adopted a strategy to slowly reduce investment risk by slightly dropping its earnings forecast in years with high returns. Some statistical modeling estimates the current 7.5 percent forecast could be lowered to 6.5 percent in two decades.

The strategy will slowly shift CalPERS investments away from stocks to less risky bond-like investments, probably resulting in a rate increase. For California pensions, the CalPERS risk strategy and the dissidents’ paper are a turn back toward the roots.

All pension fund investments had to be in bonds, or something similar, until voter approval of Proposition 1 in 1966 allowed 25 percent of investments to be in blue-chip stocks. Then Proposition 21 in 1984 allowed any “prudent” investment.

Turning back toward intergenerational equity would be costly and a reversal for lawmakers. Legislation 25 years ago (AB 1104 in 1991) created a pension-like investment fund for state worker retiree health care.

But lawmakers never put money in the fund as retiree health care became one of the fastest-growing state costs, creating a $74 billion unfunded liability. Gov. Brown is currently negotiating labor contracts that require state workers to begin contributing to the fund.

Cost containment was the announced goal last year when Brown said he would push prefunding for retiree health care. There was, however, at least one nod toward intergenerational equity as spending on state worker retiree health care neared $2 billion a year.

“Not setting aside funds for retiree health benefits earned during employees’ working lives violates a fundamental tenet of public finance — that costs should be paid in the year when they are incurred,” Legislative Analyst Mac Taylor said in his annual “fiscal outlook” issued in 2014.

Reporter Ed Mendel covered the Capitol in Sacramento for nearly three decades, most recently for the San Diego Union-Tribune. More stories are at Calpensions.com. Posted 24 Oct 16

42 Responses to “How pensions pass the buck to future generations”

  1. larrylittlefield Says:

    Just remember, the younger generations ripped off by unfunded and retroactively enriched public employee pensions have been ripped off by every other aspect of public policy too.

    https://larrylittlefield.wordpress.com/2014/08/10/generational-equity-and-the-legacy-of-todays-politicians-update/

    They have also been left much poorer, with recently released American Community Survey data showing the median work earnings of workers was nearly 13 percent lower in 2015 than in 2005, after adjustment for inflation.

    And, of course, you have the dissolution of families.

    https://larrylittlefield.wordpress.com/2014/08/13/generation-greed-and-the-family/

    This is the legacy of Generation Greed. It’s about values. It’s across the board.

    Why should public employee pensions be any different? You didn’t even mention the richer pensions for those cashing in and moving out, offset by lower pay and benefits for future public employees — with those with the best deals giving nothing back. And how can one get back the taxes older generations in lower tax states didn’t pay? Heck in Illinois their retirement income is exempt from state income taxes.

    And with two members of Generation Greed at the top of the ticket in the election, generational equity wasn’t even discussed.

  2. john m. moore Says:

    Amazing. None of these intelligent folks ever mention salary reform or reducing the size of pensions as a cure. If the investment rate is cut, then annual payments must go up and the unfunded pension deficits appear to be much larger(two to three times). Pension bonds clearly pass the cost of past services on to the future(they and annual unfunded deficits should be a lien on real property as of the date of issuance of the bonds and as of the end of the fiscal year so a buyer of the property can reduce the price by the amount of the liens). Most important for pension reform is the election of true pension reformers to councils and BOS, a reform that is currently non-existent in Ca. At this point in time pension reform in Ca. is all B.S. and as a famous comic said “It will kill you.” Reformers believe they have no leverage because of “The Ca. Rule.” There is ample leverage: salary reductions and freezes, liens on real prop. and chapter 9 in bankruptcy(that eliminates DB plans and modifies debt).

  3. Hannah Katz Says:

    Maybe the public “servants” should be on 401(k) like plans like the rest of us. Those who pay the taxes to support them. We cannot afford to fund these lavish plans any longer.

  4. TB Says:

    More and more people are beginning to realize that Defined Benefit plans like public pensions are not sustainable, including the private sector which has more or less done away with them. Here is my solution to this looming crisis that is only going to get worse without any correction of course:

    https://drive.google.com/file/d/0B90sU3A85q46OE9BZHJFSWEzbGM/view?usp=drivesdk

    Please help spread the word…

  5. jskdn Says:

    The only sure way that employee costs will be paid in the year they are incurred is to have defined contribution benefits. It is also the best way to keep government employee compensation in line with the private sector taxpayers whose money would have be taken to pay for that compensation. The existence of opposing interests is crucial in order to provide a counter weight to “factions…united and actuated by some common impulse of passion, or of interest, adversed to the rights of other citizens, or to the permanent and aggregate interests of the community” (Federalist No. 10). Unspecified and unclear costs to be imposed on taxpayer/citizens in the future does not provide that.

    It’s amply clear that a weakness of representative democracies is the propensity of elected officials to give people things and not pay for them, which requires taking money from other people who will not like that. Those in the future that will bear the burden aren’t there to vote those politicians out of office for betraying their legitimate interests. When you combine those dynamics with the natural consequences of government employee unionization, recognized by FDR as unworkable, and have that greatly exacerbated by the truly dismal state of useful journalism on the subject, Ed excepted, and you get the current problem.

    Unfortunately the likelihood of addressing the current problem is still being undermined by bad journalism. The LA Times, Cal Matters and Capitol Public Radio are doing a series on Government Pensions in California that they call “explanatory journalism.” Yet regarding the most pressing issue, the pension debt or Unfunded Actuarial Asset Liabilities, the reporters have not only not explained them well, they have contributed to misunderstanding.

    LA Times reporter Jack Dolan wrote, “Today, the difference between what all California government agencies have set aside for pensions and what they will eventually owe amounts to $241 billion, according to the state controller.”

    That might well be construed as a fixed amount that will have to be covered in the future. Judy Lin wrote, “The gap grows wider every year, even though the financial markets have rebounded since the end of the recession. That’s because pension bills keep piling up while employees retire as early as 50, public employee unions successfully negotiate multiyear pay raises, and plans fall further behind on optimistic investment assumptions.”

    While those things can certainly aggravate the problem, it doesn’t explain growing debt that can simply be a function of failing to pay the interest or amortization on the UAAL. Reporters should compare pension unfunded liability to bond-like debt, even if the government pension fund managers don’t like that. In many ways it is worse. The most important is that it carries a much higher interest rate, the pension funds assumed rate of return, than regular bonded debt. The second, which could be ameliorated by good journalism, is that unlike bonded debt which often require approval of voters, voters not only do not approve it, they likely don’t even know about it.

  6. CalPERSon Says:

    “each generation should pay for the services it receives.”

    What a ridiculous and dangerous concept because it not only undermines pensions but Social Security as well. It’s ugly, dirty wedge politics dressed up as mainstream economics designed to undercut support for retirement entitlements among younger people.

    There is no generational inequity in pensions and Social Security. It’s a social contract. Young people pay in now, some of the funds go towards the retirees; years from now when the young retire, they get the same deal. This idea that cash flow cannot cross generations is silly.

    This new fad of using short windows and bonds is financial malpractice. It just creates huge missed opportunity costs. Nothing generates capital like investing in stocks over long time frames, that’s been proven true for a century. The correct way to manage it is to have sufficient cash reserves to withstand periodic drawdowns during bear markets.

    Sure, DB pensions and Soc Sec have problems, but they can be tweaked and repaired. Killing them with generation wars isn’t the answer.

  7. spension Says:

    401(k)’s are rather corrupt, with most investment banks grabbing a huge slice (over half) of the returns through high fees. And almost all of the investment banks pressure account holders to direct money to high-fee funds, so the investment banks profit.

    There are exceptions, most notably Vanguard. But as a whole, there are not protections for beneficiaries are strong enough in the 401(k) industry. Read about Penn Specialty Chemicals for hard information on this problem…. http://www.nytimes.com/2014/02/02/business/a-long-fight-to-get-what-was-theirs-in-a-401-k.html

    401(k)’s also are more expensive for a given payout because they don’t benefit from the reduction of longevity risk, a reduction that pooled DB plans always have.

    As to the risk-free discount rate… would be good if someone did backtesting on that concept. This paper assumes that the risk-free discount rate is right based on theory alone.

    But as the old saying goes, you can lay all the economists in the world head-to-foot, and they still don’t reach a conclusion.

  8. Daniel Pellissier Says:

    spensions, both CalPERS and CalSTRS already offer low cost, well designed defined contribution plans and longevity risk can be eliminated through annuities purchased during working years or upon retirement. The private sector 401(k) model would not be used as a replacement for public sector plans.

  9. spension Says:

    As far as I know, Daniel Pellissier, the private sector annuity market has even more problems with high fees and poor management than does the private sector DC market. In terms of fees and management, the public DB system has been superior to the private sector.

    Where some (particularly California) public DB systems have been inferior is in spiking, high benefits (3% at 50), coverage of unused vacations, etc.

  10. S Moderation Douglas Says:

    Depending on the California Supreme Court, spiking may be a thing of the past, and worst case, will only apply to a limited number of legacy employees.

    And 3% at 50 is grossly exaggerated. It is definitely not a blanket “50% increase” as it is often described. Probably more important in pension (and total compensation) cost increases is the twenty to thirty percent (over CPI) salary increases many safety workers received in the years following 2001.

    Are they overpaid now, or were they underpaid before ?

  11. spension Says:

    Except the 40+% of salary employer contribution needed for state safety is anchored already to the salary. If 3%@50 was reasonable, employer contributions would not be so incredibly high.

  12. Tough Love Says:

    spension,

    It’s an employer (i.e., Taxpayer) contribution of 40% of pay ASSUMING the ENTIRE pension “liability” (including the 1/3 share not supported by ANY assets) earns 7.5% annually (year-in, year-out). With earnings on actual “assets” more likely to be in the 5% range over the next decade, that 40% of pay will likely rise to 70% over the next decade.

    There is no limit to the insatiable greed of Public Sector Unions/Workers, nor to the degree to which CA’s Elected Officials will go in COLLUDING with the Public Sector Unions to hide the true cost of these grossly excessive pension (AND benefit) promises.

    Which of course is WHY DB Plan simply DO NOT WORK in the PUBLIC Sector arena.

  13. S Moderation Douglas Says:

    Which is bigger, 40% of $80,000 or 40% of $100,000 ?

  14. Tough Love Says:

    SMD,

    That doesn’t help because the ultimate pensions ALSO have their calculation based on the $100K rather than the $80K wages.

    With CalPERS 1/3 underfunded, and the need to earn 7.5% on total Plan LIABILITIES (not it’s lower level of actual ASSETS), annual earnings on actual assets below 7.5%/(2/3) = 11.25% means the funding ratio continues to drop even further UNLESS contribution levels INCREASE.

    And with that earnings-rate bogy @ 11.25%, that INCREASE in contribution will indeed be VERY substantial……………… unless, as is eminently necessary and appropriate, CA’s Taxpayers finally revolt and somehow put an end to the legalized thievery.

  15. spension Says:

    S Moderation Douglas… which is bigger, 16% of $100,000 (the level of a reasonable DB pension, like in South Dakota or Wisconsin or Washington STate) or 40% of $80,000 (the level you get with 3%@50)

  16. Tough Love Says:

    Spension,

    Unless the Public Sector worker can demonstrably show that a comparable (in job risks, education & experience requirements, skills & knowledge) Private Sector worker earns more in WAGES (WITHOUT working more hrs/week), why is 16% of pay …”the level of a reasonable DB pension” …. when the TYPICAL Private Sector worker rarely gets more than a 3% to 4% of pay employer “match” into a 401K Plan?

    Just because 16% of pay is way less than the ludicrous 40% of pay employer contribution towards pension in CA doesn’t make it “fair” to Taxpayers …………. and shouldn’t it be ???????.

    Public Sector workers are NOT “special” and deserving of greater compensation than their Private Sector counterparts.

  17. spension Says:

    Tough Love, we’ve been through this repeatedly. There is no limit to the insatiable greed of Private Sector executives, nor to the degree to which US and CA’s Elected Officials will go in COLLUDING with the Private Sector executives to hide the true cost of their grossly excessive pension (AND benefit) promises, which have corruptly destroyed the private sector retirement benefit system in the US.

    As documented by a Wall Street Journal Pulitzer Prize winner in http://www.retirementheist.com.

    In spite of the hard facts and evidence of corruption at the top of much of the private sector, you go on making comparisons with it.

    Look at the Netherlands, or Germany. Our life in the US does not have to be a race to the bottom where plutocrats like Biff in Back to the Future grab all the money and stomp on all the regular people. But I guess that is what you aspire to.

  18. Tough Love Says:

    spension, Indeed we have …..”been through this repeatedly”.

    And as you have in almost all of your previous responses to me, you are again trying to justify your support for FAR GREATER Taxpayer contribution into Public Sector DB pensions (the 16% of pay into even the cheaper DB Plans) than Private Sector employer contributions into 401k DC Plans (typically 3-4% of pay) …. by trying to divert the readers attention to the misdeeds of Private Sector executives.

    No matter how many times you try this ploy, it WILL NOT justify greater Taxpayer contributions into Public Sector pensions than what Private Sector workers typically get in 401K contributions from their employers.
    —————————————–

    I believe that you (or a family member) are now (or will be) receiving a Public Sector pension …. and THAT is what drives your unyielding support for Public Sector DB pensions.

  19. spension Says:

    Well, we know you benefit from corruption in the private sector, as you have said. You are in the investment business.

    You never, ever address the findings of someone who works for the Wall Street Journal, has won a Pulitzer Prize, and who totally has demolished your claims that the US private sector post-retirement benefit system is worthy a benchmark for comparison.

    http://www.retirementheist.com

    You have really peed in your own mess kit with your bringing up of the ruined private sector benefit system, where the funds that once were plenty to pay for 2 generations of rank-and-file workers were grabbed by the executives.

    As you’ve said many times, the executives deserve to lift every dollar of their worker’s pension funds if they want, because, well capitalism.

    I don’t get a penny, stand to get a penny, or have a family member who gets a penny or stands to get a penny from the public DB systems in California.

    I found horrible takings of my DC savings by private sector investment bankers through high fees. That got me interested in the whole subject.

    And the hard fact is and remains: well managed DB plans are simply the best solution for post-retirement benefits. That is why OASDI is a DB plan. You favor the private sector grabbing all the funds in that too.

  20. Tough Love Says:

    Spension,

    As I previously told you, the following is a FAR BETTER list of recommended reading:

    (1) Plunder: How Public Employee Unions are Raiding Treasuries, Controlling Our Lives and Bankrupting the Nation

    https://www.amazon.com/gp/product/0984275207?ie=UTF8&tag=pensio-20&linkCode=as2&camp=1789&creative=9325&creativeASIN=0984275207

    and

    (2) Government Unions and the Bankrupting of America

    https://www.amazon.com/Government-Bankrupting-America-Encounter-Broadsides/dp/1594035903/ref=pd_bxgy_14_img_3?ie=UTF8&psc=1&refRID=99Y5M0H5BYB91Q6VQXRH

    (3) Government against Itself: Public Union Power and Its Consequences

    https://www.amazon.com/Government-against-Itself-Public-Consequences/dp/0199990743/ref=pd_bxgy_14_img_2?ie=UTF8&psc=1&refRID=N7EAHJXA4WQ2DN6G4XX9
    ———————————

    Yup, you keep shilling for the PUBLIC Sector Unions/workers and supporting a continuation of their ALWAYS-grossly-excessive DEFINED BENEFIT pension plans.

  21. Tough Love Says:

    Quoting spension …..

    “As you’ve said many times, the executives deserve to lift every dollar of their worker’s pension funds if they want, because, well capitalism.”

    Please show the readers exactly where I sated that.

    You are a liar …. and quite a desperate one at that.

  22. spension Says:

    Well, Tough Love, you regularly state that executives (like, say, William McGuire of United Health) deserve their $131 million post-employment pay packages… even though taxpayers subsidized United Health, through with Medicaid, Medicare, and NIH and CDC research, not to mention by allowing incredible tax breaks because many health agencies offer as non-profits.

    Because… in your opinion the private sector is perfect and needs no legal oversight or regulation by the public sector that you regularly pummel. In contrast… I am always in agreement that in California public sector unions did get greedier than they should have, although not nearly as greedy as executives (on the public dime) like William McGuire.

    You have never once supported any application of law or regulation to address the incredible seizure of rank-and-file pension plan assets by private sector executives, documented by a serious Pulitzer Prize winning journalist who works for, goodness sakes, **THE WALL STREET JOURNAL** (not Mother Jones or the American Communist Party)…

    http://www.retirementheist.com

    As to your books:

    (1)”Plunder”… Greenhut doesn’t have a Pulitzer Prize, and he doesn’t write for the premier financial media source in the US.

    (2)+(3)… DiSalvo doesn’t have a Pulitzer Prize, and and he doesn’t write for the premier financial media source in the US. And he only focuses on Public Union/Democratic Party connections, and overlooks that in both California and Wisconsin it has been the **REPUBLICAN PARTY** that has supported overly generous DB pensions… often in the dead of night, or in voice votes, etc.

    As for “shilling”… the public sector commenters regularly pummel me here for pointing out the excesses of 3%@50, etc.

    But you have also revealed that you view public debt to bondholders as an obligation that is senior to pension debt. Weird. To me, all debt is equally unwise, and all debtholders deserve to take a haircut due to government overreach.

  23. Tough Love Says:

    Quoting spension …………

    (1) “you regularly state that executives (like, say, William McGuire of United Health) deserve their $131 million post-employment pay packages”

    (2) “in your opinion the private sector is perfect and needs no legal oversight or regulation by the public sector”

    Again,

    Please show the readers exactly where I stated either.

    You are a liar …. and quite a desperate one at that.

    —————————————————————–
    —————————————————————–

    And repeating my above comment:
    ———————————

    Quoting spension …..

    “As you’ve said many times, the executives deserve to lift every dollar of their worker’s pension funds if they want, because, well capitalism.”

    Please show the readers exactly where I sated that.

    You are a liar …. and quite a desperate one at that.

  24. spension Says:

    More of the same name-calling from Tough Love… note, Tough Love, you never, ever call for enforcement of the law when Private Sector folks commit fraud and corruption… you again have ducked the chance to do so right now… your desperation at being called out is palpable.

    Only the earnest public sector folks who try to identify and stop the private sector frauds receive your vituperation…

    “Tough Love Says:
    January 6, 2014 at 5:22 pm
    QuotingSpensions…..”Milken, Madoff, Boesky, Enron, etc show the level of ethics in your chosen profession, Tough Love. Why would anyone trust a single financial assertion by anyone in the private sector?”

    Oh please …….no matter how bad some wall street actors are, they don’t hold a candle to the art of thievery mastered by the Public Sector Union/politician cabal.”

  25. Tough Love Says:

    “Quoting spension …..

    “As you’ve said many times, the executives deserve to lift every dollar of their worker’s pension funds if they want, because, well capitalism.”

    I repeat …….. SHOW the readers exactly where I stated that.

    You are a liar …. and quite a desperate one at that.”
    ————————————————-

    FYI … I will not post this again AFTER you very clearly acknowledge that that statement was false AND that you “lied” by making it.

  26. spension Says:

    Tough Love, my statement is very clearly true… you already posted on January 4, 2013 that all the public employees who enforce our fraud and financial laws are masters in thievery, far better at theivery than Madoff, Boesky, Milken, Enron, etc.

    So I very clearly acknowledge that my statement is utterly true and that you are chapped by being called out for it.

  27. Tough Love Says:

    “Quoting spension …..

    “As you’ve said many times, the executives deserve to lift every dollar of their worker’s pension funds if they want, because, well capitalism.”

    I repeat …….. SHOW the readers exactly where I stated that.

    You are a liar …. and quite a desperate one at that.”
    ————————————————-

    FYI … I will not post this again AFTER you very clearly acknowledge that the abovet statement was false AND that you “lied” by making it.

  28. Tough Love Says:

    Quoting spension ……….

    “you already posted on January 4, 2013 that all the public employees who enforce our fraud and financial laws are masters in thievery, far better at theivery than Madoff, Boesky, Milken, Enron, etc.”

    A bit harsh, and though I can’t find via search exactly what you are attributing to me, yes that’s sounds like something I might post.

    But we’re not talking about THAT statement. I’m calling you out as a LIAR for stating the following, quoting………

    ““As you’ve said many times, the executives deserve to lift every dollar of their worker’s pension funds if they want, because, well capitalism.”

    So I repeat again …….. SHOW the readers exactly where I stated that.

    You are a liar …. and quite a desperate one at that.”

  29. spension Says:

    As you freely admit, you say the hardworking SEC and federal investigators, who try to stop the fraud of those in the private sector, are masters of thievery who exceed Madoff, Boesky, Milken, and Enron in ability to steal.

    https://calpensions.com/2013/12/23/pension-initiative-gets-mixed-lao-cost-analysis/

    Case closed, you hate law enforcement so much that it is obvious you feel the captains of industry should be free to skim the pension funds of their workers… which is exactly what has happened, according to a Wall Street Journal reporter who won a Pulitzer:

    http://www.retirementheist.com

    There is absolutely no rational basis for logical, numerically-capable people to use private sector post-retirement benefits as a benchmark for comparing public sector post-retirment benefits too.

    Because in the private sector, the executives had raided all the pension funds and paid themselves. And in a vast portion of the US private sector, it is US Taxpayer $ that fuel the executives fraud and greed… witness McGuire (and many others in the health care industry)… where most of the $ come from Medicare, Medicaid, CDC & NIH research, not to mention favored non-profit tax status. Witness the US defense establishment, the US auto industry… both vast consumers of taxpayer $.

    Witness Donald J. Trump, who used bond manipulation to claim about $1 billion in tax losses by *his investors* as **PERSONAL**, so Trump evaded 20 years of income and Medicare taxes.

    Every executive in the private sector does or aspires to do what Donald J. Trump has done.

  30. spension Says:

    Very useful testimony from Ellen E. Schultz to the US Senate:

    http://www.finance.senate.gov/imo/media/doc/Testimony%20-%20Ellen%20Schultz.pdf

  31. Tough Love Says:

    spension,

    Trading comments with you has the upside of exposing how you routinely embellish and twist statements to suit your agenda.

    Example….. Our ACTUAL comment exchange (which I located in your first link above and time-stamped January 6, 2014 at 5:22PM) was as follows:

    spension stated………………..”Milken, Madoff, Boesky, Enron, etc show the level of ethics in your chosen profession, Tough Love. Why would anyone trust a single financial assertion by anyone in the private sector?”

    Tough Love responded ……… “Oh please …….no matter how bad some wall street actors are, they don’t hold a candle to the art of thievery mastered by the Public Sector Union/politician cabal.”

    Hardly sound as sinister as you would like readers to believe.

    I also noted in one of the (perhaps 100 comment in that link) that I pinned you out PERFECTLY when I stated ……..

    “you’re either an idiot (and dumb as a rock), or more likely a charlatan, and riding this Public Sector “pig-fest” and don’t want it to end.”

    ————————————————

    And since I haven’t forgotten (and am not letting you off the hook):

    “Quoting spension …..

    “As you’ve said many times, the executives deserve to lift every dollar of their worker’s pension funds if they want, because, well capitalism.”

    I repeat …….. SHOW the readers exactly where I stated that.

    You are a liar …. and quite a desperate one at that.”
    ————————————————-

    FYI … I will not post this again AFTER you very clearly acknowledge that the above statement was false AND that you “lied” by making it..

  32. spension Says:

    Tough Love… you are reduced to namecalling again.

    And you still don’t say that in any way you oppose the seizure of rank-and-file pension plans by private sector executives, which has been extensively documented as a prominent reason why private sector post-retirement benefits are not a serious benchmark.

    Blows to smithereens any argument that uses a comparison to the private sector.

    Sad you are reduced to personal attacks and namecalling. Proves the facts are not on your side.

  33. Tough Love Says:

    spension,

    YES ……. I oppose the seizure of rank-and-file pension plans by private sector executives … and have NEVER supported such ridiculous, unethical, and immoral actions.

    And you will NEVER find a statement from me supporting such seizures.

    Now back to business ……….
    —————————————————————
    “Quoting spension …..

    “As you’ve said many times, the executives deserve to lift every dollar of their worker’s pension funds if they want, because, well capitalism.”

    I repeat …….. SHOW the readers exactly where I stated that.

    You are a liar …. and quite a desperate one at that.”
    ————————————————-

    FYI … I will not post this again AFTER you very clearly acknowledge that the above statement was false AND that you “lied” by making it..

  34. spension Says:

    Tough Love, you did post in January 4, 2013 that all the public employees who enforce our fraud and financial laws are masters in thievery, far better at theivery than Madoff, Boesky, Milken, Enron, etc. Sorry, you lose, and if you stop posting… well, that would be a terrible shame.

  35. Tough Love Says:

    spensions,

    The “post” you are referring to is the one I quoted just above and repeat here (if yuou are referring to another post, SHOW it):

    spension stated………………..”Milken, Madoff, Boesky, Enron, etc show the level of ethics in your chosen profession, Tough Love. Why would anyone trust a single financial assertion by anyone in the private sector?”

    Tough Love responded ……… “Oh please …….no matter how bad some wall street actors are, they don’t hold a candle to the art of thievery mastered by the Public Sector Union/politician cabal.”
    ———————————

    How do you go from THAT response from me to …… your assertion that I stated …… “that ALL EMPLOYEES THAT ENFORCE OUR LAWS are masters in thievery…..” (CAPITAL LETTERS, my emphasis)?

    You quite the character and love putting words in other’s mouths.

    Now back to business………..
    ————————————————————–

    “Quoting spension …..

    “As you’ve said many times, the executives deserve to lift every dollar of their worker’s pension funds if they want, because, well capitalism.”

    I repeat …….. SHOW the readers exactly where I stated that.

    You are a liar …. and quite a desperate one at that.”
    ————————————————-

    FYI … I will not post this again AFTER you very clearly acknowledge that the above statement was false AND that you “lied” by making it..

  36. miltonm Says:

    And around we go….bla, bla.

  37. spension Says:

    Indeed, miltonm. Tough Love doesn’t believe in personal responsibility… he believes investment bankers have a right through fraud and theft to all of work people’s retirement savings, just like…
    http://www.nytimes.com/2014/02/02/business/a-long-fight-to-get-what-was-theirs-in-a-401-k.html

    Won’t here any effort on Tough Love to achieve enough oversight of DC plans to prevent investment bankers and the private sector from draining those DC plans… the whole reason he argues for a shift from DB to DC is so his colleagues can drain the savings of hard working people.

    That is how the private sector executives destroyed the US private sector DB system (actually not quite destroyed… some good companies are still honest) but overwhelmingly private sector executives grabbed the DB savings of their employees… as documented by a Pulitzer Prize winning Wall Street Journal reporter….
    http://www.retirementheist.com

    In Tough Loves world, regular people are just sitting chickens to be eaten by the aggressive wolves of the private sector. And if anyone notices and fights back, well, call them names, destroy their credibility, use all possible propaganda to discredit them. Or call government regulators corrupt and ignorant. Sue like crazy, like Donald J Trump. But obey the prime directive: investment bankers and the private sector deserve to get every one of your hard earned pennies, because, well, they are gods.

  38. Tough Love Says:

    spension,

    There are likely hundreds of issues I COULD support (or advocate against) if I was inclined and had the time to do so. Like others, I (not you) choose the issues I wish to advocate for, which in my case is material/substantive Public Sector pension reform.

    You cannot tell me what I SHOULD support, berate me and make up FALSE statements saying that I stated things that I clearly did not say ……at least not without be called out on it.

    Now back to business………..
    ————————————————————–

    “Quoting spension (to Tough Love) …..

    “As you’ve said many times, the executives deserve to lift every dollar of their worker’s pension funds if they want, because, well capitalism.”

    I repeat …….. SHOW the readers exactly where I stated that.

    You are a liar …. and quite a desperate one at that.”
    ————————————————-

    FYI … I will not post this again AFTER you very clearly acknowledge that the above statement was false AND that you “lied” by making it..

  39. spension Says:

    Been there, done that, Tough Love. You say law enforcement professionals are thieves who exceed Madoff, Boesky, Enron and Milken in thievery. You’re not fooling anyone with your dissembling requests for hyperspecificity. Everyone here knows you have just one interest… get working peoples’ retirement $ in the hands of corrupt investment bankers like yourself, so they can seize it through high fees, just like Penn Specialty Chemicals did.

    Thank goodness that is one thing public DB plans get right… by and large they don’t drain off retirement savings to subsidize trips for investment bankers, their lovers and mistresses to the Kentucky Derby, which is common in your industry.

    And you feel that kind of seizure by high fees is your entitlement. Talk about corruption… yes, you endorse it by not criticizing it. Silence is consent. Qui tacet consentire videtur, ubi loqui debuit ac potuit.

  40. Tough Love Says:

    Quoting spension …..

    “You say law enforcement professionals are thieves who exceed Madoff, Boesky, Enron and Milken in thievery. ”

    See…there you go again. Evidently this too is coming from our 1/06/2014 comment exchange (noted above) where:

    spension stated………………..”Milken, Madoff, Boesky, Enron, etc show the level of ethics in your chosen profession, Tough Love. Why would anyone trust a single financial assertion by anyone in the private sector?”

    Tough Love responded ……… “Oh please …….no matter how bad some wall street actors are, they don’t hold a candle to the art of thievery mastered by the Public Sector Union/politician cabal.”
    ——————————————-

    Is that not more than just putting words in my mouth ? How did my words …”the Public Sector Union/politician cabal.” …. become ……. ” law enforcement professionals are thieves” ?

    What’s wrong with your head ?
    ———————————-
    Now back to business………..

    “Quoting spension (to Tough Love and time-stamped October 31, 2016 at 9:02 pm above) …..

    “As you’ve said many times, the executives deserve to lift every dollar of their worker’s pension funds if they want, because, well capitalism.”

    I repeat …….. SHOW the readers exactly where I stated that.

    You are a liar …. and quite a desperate one at that.”
    ————————————————-

    FYI … I will not post this again AFTER you very clearly acknowledge that the above statement was false AND that you “lied” by making it.

  41. Berryessa Chillin' Says:

    Seems to me that once again TL has made his point. He did, after all, seem to agree in his reply that Milken, Madoff, Boesky, and Enron were “bad… wall street actors.” But I think we can agree that the tens of billions lost by those bad guys are nowhere near the hundreds of billions public sector DB funds are underfunded, through the collusion of politicians, public unions, and corrupt pension administrators such as CalPERS.

  42. Tough Love Says:

    Berryessa Chillin’,

    FYI, current estimates of State & Local Public Sector Pension Plan under-funding across America now ranges from $1.7 Trillion to $5.4 Trillion depending on the interest rate used to discount Plan liabilities.

    The vast majority of financial economists believe the correct approach is the one that yields the $5.4 Trillion. That approach is also FAR closer to the valuation approach (i.e. assumptions & methodology) REQUIRED by the US Gov’t in the valuation of PRIVATE Sector pension Plans.

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