How Lower Earnings Will Impact California's Total Unfunded Pension Liability
How Lower Earnings Will Impact California's Total Unfunded Pension Liability
By Ed Ring, February 18, 2013 SUMMARY: This study describes how actuaries calculate two key variables that govern pension solvency; the plan’s “accrued actuarial liability,” defined as the present value of all future obligations to pay pensions, and the plan’s “actuarial value of assets,” defined as the current value – adjusted upwards or downwards to...
By Edward Ring
Would ANY Public Sector Union Reform Appeal to California’s Democrats?
Would ANY Public Sector Union Reform Appeal to California’s Democrats?
“There’s a difference between being liberal and progressive and being a union Democrat.” San Jose Mayor Chuck Reed, Bloomberg The most powerful defenders of that broken system, without a question, is the teachers’ union.” Los Angeles Mayor Antonio Villaraigosa, Sacramento Press If you wish to challenge the conventional wisdom, that Democrats and liberals march in...
By Edward Ring
Expose on CalPERS Illuminates Collusion Between Big Labor and Big Finance
Expose on CalPERS Illuminates Collusion Between Big Labor and Big Finance
One of the more astute observers of public sector union impact on government policy and government budgets is Steven Malanga, a senior fellow with the Manhattan Institute. In an article just published in City Journal entitled “The Pension Fund That Ate California,” Malanga recounts the history of CalPERS from its modest inception in 1932 to...
By Edward Ring
Union Reforms and Counter-Reforms Sweep U.S.
Union Reforms and Counter-Reforms Sweep U.S.
If you don’t read our weekly Union Watch Highlights, where we compile links and excerpts from the most relevant stories across the U.S. concerning union activity and union reform, this week would be a good time to start. Because across the country, an increasing percentage of state legislatures are beginning to seriously confront the challenges...
By Edward Ring
Calling for Public Sector Union Reform is Not Anti-Union
Calling for Public Sector Union Reform is Not Anti-Union
Last week an article written by UnionWatch contributor Kevin Dayton was republished in its entirety by the State Building and Construction Trades Council. While we are pleased that the SBCTC is sharing our material with their members, we object to their characterization of UnionWatch as an “anti-union website.” We also invite them to consider the...
By Edward Ring
Gina Raimondo’s Shining Example – Pension Reform in Rhode Island
Gina Raimondo’s Shining Example – Pension Reform in Rhode Island
January 28, 2013 By John G. Dickerson About the Author: John Dickerson is a financial professional living in Mendocino County who is involved in public sector pension analysis and reform. Since 2008 Dickerson has been the publisher of the influential website and newsletter www.YourPublicMoney.com. He focuses on the impact of unfunded pension debt on the...
By Edward Ring
How Public Sector Unions Are Winning the Cyberwar
How Public Sector Unions Are Winning the Cyberwar
Earlier this month leaders of the Obama reelection campaign announced the formation of a permanent advocacy organization called Organizing for Action that will enlist his supporters to fight for his policy agenda. The creation of this organization should come as no surprise, since the two key prerequisites for its existence are already in place. (1)...
By Edward Ring
How Big is California’s “Wall of Debt”?
How Big is California’s “Wall of Debt”?
When California Governor Jerry Brown unveiled his latest state budget, he explained that as the budget begins to generate surpluses, the state will finally begin to dismantle the “Wall of Debt” that has been accumulating. Whether or not Gov. Brown’s budget will generate surpluses, this year or any time soon, is an open question. But...
By Edward Ring
The Persistent Pension Fund Doublethink Behind the 7.0% Per Year Projection
The Persistent Pension Fund Doublethink Behind the 7.0% Per Year Projection
“Doublethink means the power of holding two contradictory beliefs in one’s mind simultaneously, and accepting both of them.” ― George Orwell, 1984 The two largest public employee pension funds in California, CalPERS and CalSTRS, logged annual returns for their fiscal years ending June 30th, 2012, of 0.14% and 1.8%, respectively. These pension funds employ an...
By Edward Ring
Municipal Credit Ratings May Crumble Under New Rules
Municipal Credit Ratings May Crumble Under New Rules
Everyone remembers how thousands of bankers and millions of homeowners were caught by surprise when the real estate bubble collapsed in late 2008. One of the major reasons this prodigious bubble was allowed to inflate in the first place was because credit rating agencies did not properly evaluate the financial risks inherent in collateralized mortgage...
By Edward Ring
The Impact of Moody's Proposed Changes in Analyzing Government Pension Data
The Impact of Moody's Proposed Changes in Analyzing Government Pension Data
January 8, 2013 By John G. Dickerson About the Author: John Dickerson is a financial professional living in Mendocino County who is involved in public sector pension analysis and reform. Since 2008 Dickerson has been the publisher of the influential website and newsletter www.YourPublicMoney.com. He focuses on the impact of unfunded pension debt on the...
By Edward Ring
The California Budget Crisis – Causes and Recommendations
The California Budget Crisis – Causes and Recommendations
December 31, 2012 Download Printable Version By William D. Fletcher INTRODUCTION California needs the equivalent of a readable annual report that lets everyone who is interested see how well the state is doing and where it’s headed. Hopefully, this report is a step in that direction. The closest overview available is the State Controller’s Office...
By Edward Ring
The Pension Debate is About Much More Than Pensions
The Pension Debate is About Much More Than Pensions
“I wish it need not have happened in my time,” said Frodo. “So do I,” said Gandalf, “and so do all who live to see such times. But that is not for them to decide. All we have to decide is what to do with the time that is given us.” J.R.R. Tolkien, Lord of...
By Edward Ring
Saving Defined Benefits Requires Lower Pensions for Existing Workers and Retirees
Saving Defined Benefits Requires Lower Pensions for Existing Workers and Retirees
Among pension reformers there is a spirited ongoing debate regarding what might constitute a financially sustainable yet equitable solution. On one side there is a call to do away with defined benefits entirely, replacing them with defined contribution plans. The argument is compelling; with defined contribution plans, when the participant retires, they survive on the...
By Edward Ring