tag:blogger.com,1999:blog-2447438783001404385.post5916098854301901092..comments2024-03-28T10:51:23.769-05:00Comments on Jackson Jambalaya: Pat Pumps PERSKingfishhttp://www.blogger.com/profile/06184990110961727404noreply@blogger.comBlogger17125tag:blogger.com,1999:blog-2447438783001404385.post-30294569947385081102016-10-17T03:41:33.608-05:002016-10-17T03:41:33.608-05:00I'm not sure what the difference would be, but...I'm not sure what the difference would be, but if we stopped retirees from returning as independent contractors, that would benefit PERS. If I retire on PERS and a month or two later return as a contractor (or is the requirement - matters not), I don't pay anyting into the system yet I occupy the job of someone would IF they were hired as an employee. <br /><br />Somebody wiser than I would have to speak to the cost-benefit analysis of that, considering benefits, salary, insurance, etc, plus the employer having to contribute if I were an employee and not a contractor. <br /><br />Secondly, I'm pretty certain that a blog-article on the subject of retirement for government employees is unrelated to contracts by Carey Wright and the Governor. So there's that. <br /><br />Third: I always struggle to be comfortable with the credibility of a report from a blogger when the underlying premise is 'See, I told you dumbasses', or, "I been tellin' you simpletons this thing is a mess". Can't that frame be replaced with something more productive?<br /><br />Lastly: There will always be a comment or two that attempts to scare people into thinking their taxes are going up to prop up this (or any other) system. State income taxes have not been raised in how many years? And they're about to be reduced! Government agencies pay the contributions, not citizens. Of course government agencies get those dollars from budget lines which come, indirectly, from state funds which are tax-payer based. But that's a helluva long stretch from 'your taxes are going up to pay for this'. About To Join The Yawners..noreply@blogger.comtag:blogger.com,1999:blog-2447438783001404385.post-86085968693737872002016-10-16T13:11:05.670-05:002016-10-16T13:11:05.670-05:0011:07 see 2:18. 11:07 see 2:18. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2447438783001404385.post-16099016949420539582016-10-16T11:07:42.604-05:002016-10-16T11:07:42.604-05:00PERS also assumes an annual 3% payroll contributio...PERS also assumes an annual 3% payroll contribution increase in their financial assumptions. And just a few years ago PERS also had an annual 8% return baked into their projections.... Only state legislature can make policy/plan changes to PERS. That's the problem. Employees contribute 9% of their pay to their own plan. However the employer (taxpayer) contribution rate in now 15.75%. Therein lies another built in problem. But legislature doesn't want to tell joe the cop or Larry the teacher to dig into their own pocket for a higher contribution amount. Oh, and the state pays over 35% contribution rate for highway patrol... and yes, all PERS member units have to account for the unfounded liability (GASB) based on a formula. Which does negatively impact such financials. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2447438783001404385.post-20889344551389201732016-10-16T07:42:35.557-05:002016-10-16T07:42:35.557-05:00If you live and pay taxes in Mississippi @8:51 eve...If you live and pay taxes in Mississippi @8:51 eventually this is going to bite you. Only unknown is the size of the haircut all the applicable parties will have to take.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2447438783001404385.post-13819580622969719092016-10-15T20:51:39.157-05:002016-10-15T20:51:39.157-05:00I sure glad I have nothing to do with this farce o...I sure glad I have nothing to do with this farce of a retirement plan.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2447438783001404385.post-32889373488859311242016-10-15T08:35:05.761-05:002016-10-15T08:35:05.761-05:00The reason the contributions are falling is two fo...The reason the contributions are falling is two fold. The first being that those with control of the government have cut jobs, which, to a certain extent, is a good thing. Second, why would any talented individual take a job with the state? The benefits are terrible, the people in charge are usually worse than the benefits due to our church system of promotion by politics, and unaccountability seems to permeate government jobs as a whole. Did I forget to mention that the last time I checked the state was requiring workers to contribute 12% on an 8 year vesting schedule? I guess making them feel trapped is one way to hold on to employees. <br />When I read articles like this I thank the lord that I moved to Memphis to watch Mississippi burn. The rest of the nation laughs for a reason, it's because the voters single handedly elect the worst possible leaders who only validate what those laughing knew all along. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2447438783001404385.post-22543706807860167832016-10-15T08:30:38.994-05:002016-10-15T08:30:38.994-05:00This has a pretty simple solution. Decrease benefi...This has a pretty simple solution. Decrease benefits. Roll back legislation that increased benefits one act at a time until the unfunded liability drops to an acceptable level. Grandfather in current employees by not changing the plan in place when they were hired. Do this for all new hires. Problem solved.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2447438783001404385.post-51643787608070305612016-10-15T07:57:01.742-05:002016-10-15T07:57:01.742-05:00Not to overlook the fact that the taxpayer is cont...Not to overlook the fact that the taxpayer is contributing 15.75% of wages to the fund. A ridiculous rate considering a typically generous retirement contribution match in private industry of 6%. <br /><br />According to Tim Kalich of the Greenwood Commonwealth, beginning last year, new governmental accounting rules required each of the nearly 900 employers in the PERS system - state and local governments, school districts, community colleges, universities, municipal utilities, etc. to record the $12.5 BILLION dollars in unfunded liabilities of the PERS fund to each of the governmental entities' balance sheets. Which of course weakens each of the public entity's financials along with reducing their ability to borrow money and obtain favorable interest rates. One would hope taxpayers on the local level will now wake up to what this program is truly costing our state.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2447438783001404385.post-72447507314843159092016-10-14T21:49:35.878-05:002016-10-14T21:49:35.878-05:00Minor typo, the first year below was 1997. The pa...Minor typo, the first year below was 1997. The paragraph should be:<br /><br />See the Graph and the numbers on pages 26 and 27. Since the year 1996 the Unfunded Accrued Liability has declined in actual dollars in the following years: 1997,1998, 2001 and 2014. Since the year 1996 the Unfunded Accrued Liability has increased from $2.5 billion to $16 billion in 2015.<br /><br />Look at <a href="http://www.pers.ms.gov/Content/Supplemental/persfacts_figures.pdf" rel="nofollow">the chart on page 26 and 27</a>. What (if anything) has changed in the administration of PERS that will change the outcome predicted by both the unmistakable trend of increasing Accrued Liability and increasing Unfunded Accrued Liability. The growing percentage difference between the promise and the actuarial reality, and the magnitude of the shortfall in billions of dollars illustrate the problem. 2014 was the first year since 2001 that Unfunded Accrued Liability decreased. It decreased from $15.1 billion to $14.4 billion. In 2015 that small progress was reversed as as Unfunded Accrued Liability increased to $16.0 billion.<br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2447438783001404385.post-88661716797660535212016-10-14T21:08:36.952-05:002016-10-14T21:08:36.952-05:00There was even a five year rate of return of 14.8%...<i>There was even a five year rate of return of 14.8%. How many JJ readers would love to have an average rate of return of 14.8%?</i><br /><br />Looking at the rate of return while excluding consideration of the risk of the chosen investments? My brother in law knows a guy who recommends you could put it all in options and defaulted junk bonds. The PERS rate of return needs to be compared to the market rate of return, and to similar pension funds with comparable asset allocations and risk profiles to draw useful performance conclusions. <br /><br />Page references below are to <a href="http://www.pers.ms.gov/Content/Supplemental/persfacts_figures.pdf" rel="nofollow">this report.</a><br /><br />The goal of PERS attaining an 80% funded level by 2042 assumes PERS earns a 7.75% annual rate on it's investments through 2042, and that nothing else changes. This 7.75% ARoR is slightly more realistic than the 8.0% ARoR used until July 1 2015. (page 23) <br /><br />How likely is the ARoR to be 7.75% over the next 26 years? That probably depends on how many secular bull markets you want to forecast, and whether you start 2017 nearer a market top or a market bottom. Look at the Annualized Rate of Return chart on page 23. Are things starting to get back to normal? Or perhaps there is there a new normal?<br /><br />The Unfunded Accrued Liability is one of the numbers that tells how sick PERS is. <br /><br />This number (Unfunded Accrued Liability) gets smaller with:<br /><br />1. Exceedance of the 7.75% ARoR target, <br /><br />2. Increases in employer and/or employee contribution <br /><br />3. Decreases in benefits to be paid.<br /><br />This number gets larger with the reverse of the above.<br /><br />The impact of of any under performance in the investment portfolio is illustrated by the chart on page 11. More than half of the "PERS Pension Buck" over the last 30 years is investment income. A few cents short on the buck in the first few years of the 2042 projections and the magic of compounding will mean these projections will need a major adjustment or to be consumed with a much larger dose of hopium. <br /><br /><br />See the Graph and the numbers on pages 26 and 27. Since the year 1996 the Unfunded Accrued Liability has declined in actual dollars in the following years: 199,1998, 2001 and 2014. Since the year 1996 the Unfunded Accrued Liability has increased from $2.5 billion to $16 billion in 2015.<br /><br />Since it's government money, all the fees and costs paid by PERS (which come right off the top every year) should be looked at to see how efficient this part of the operation is. <br /><br /><br /><br /><br /> <br /><br /> <br /><br /> <br /> Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2447438783001404385.post-41642192639502658672016-10-14T20:26:57.361-05:002016-10-14T20:26:57.361-05:00Ok chicken Little's.....
We are all broke.
I...Ok chicken Little's.....<br /><br />We are all broke.<br /><br />Is there a solution?<br /><br />Stop these plans now? <br /><br />Create another frame work?<br /><br />Or wait for it to implode and pick up the pieces and figure it out then?<br /><br />The religious zealots will be in charge persecuting gays and blacks for the meltdown....sorry folks....that's how this story ends....oh....and the Jews....y'all are screwed too.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2447438783001404385.post-72105991829637589922016-10-14T16:56:47.919-05:002016-10-14T16:56:47.919-05:00Below is a link to a very interesting article illu...Below is a link to a very interesting article illustrating in a vivid and real-world way exactly what is going on with PERS and many, many other pensions. <br /><br />The article describes the California Public Employees' Retirement System (CalPERS) "termination liability" calculation that applies to municipalities who elect to withdraw from their programs. In this case, 4 retirees - who were already drawing from their pensions - would cost the city $1.6M in "termination fees" in order to continue drawing their full pension benefits. So, CalPERS is admitting that if all contributions to the fund stopped today, there would not be enough money to pay CURRENT RETIREES (not to mention the currently employed but future retirees). In other words, CalPERS (and MS PERS and many other PERS, for that matter) needs contributions from the currently-employed to pay benefits to the already-retired.<br /><br />There is a term for this kind of financial arrangement: It begins with "P" and ends with "I" and there is a "Z" somewhere in between.<br /><br /><br />http://www.zerohedge.com/news/2016-10-12/loyalton-california-pensionsAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2447438783001404385.post-75210460659852587312016-10-14T16:39:43.510-05:002016-10-14T16:39:43.510-05:00To 3:22PM
I am not certain about this, but I am p...To 3:22PM<br /><br />I am not certain about this, but I am pretty sure that the funding level figures take into account the actuarial impacts of beneficiary deaths and attrition from the plan. <br /><br />I welcome feedback from others who may be better informed.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2447438783001404385.post-16184603456315000662016-10-14T15:22:14.511-05:002016-10-14T15:22:14.511-05:00No discussion of the offsetting negative payout du...No discussion of the offsetting negative payout due to death of beneficiaries. I think JJ and PERS are "cooking the books" in <br />making their argument.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2447438783001404385.post-56037625071164101942016-10-14T15:14:56.574-05:002016-10-14T15:14:56.574-05:00The plans assets used in computing the 60% already...The plans assets used in computing the 60% already includes the projected future contributions. Our state leadership has their heads in the sand and are ignoring the problem. they are no different from Washington's liberal Democrats. Just lie about, cover it up and let it become someone else's problem down the road. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2447438783001404385.post-35811064799415955822016-10-14T14:18:53.014-05:002016-10-14T14:18:53.014-05:00All I know is this.....years ago I worked for the ...All I know is this.....years ago I worked for the city for 12 years. Shortly before I turned 60, the city personnel department called me about applying for my PERS retirement. I did and was certainly pleasantly surprised when they informed me I would be getting almost 25% annually of the TOTAL amount I had contributed during the 12 years. $20k and change put into my PERS account and $412/month I would get from PERS (or my wife if I die before she does) for the set of our lives. With COLA it is now over $500/month.<br /><br />#nowonderpersisbrokeRetired City Employeenoreply@blogger.comtag:blogger.com,1999:blog-2447438783001404385.post-86185250604113173542016-10-14T13:56:55.013-05:002016-10-14T13:56:55.013-05:00The mortgage analogy fails completely -- in fact, ...The mortgage analogy fails completely -- in fact, it borders on being deliberately misleading. <br /><br />The tacit assumptions when you talk about paying a mortgage are (1) that you have a job or an independent source of income that covers the payment; and (2) that the mortgage amount will go down over time. Neither is true for a pension plan.<br /><br />First, with a pension plan, the 60% you have in the "bank" IS THE ONLY THING YOU HAVE to generate income to pay off the mortgage. There is no "job" or other source of income. <br /><br />Second, you're not paying down a set amount that shrinks over time. You're keeping up with a permanent obligation that grows over time.<br /><br />This means, as KF suggests, that having a small percentage of your total obligation on hand is a big problem. Having a shrinking percentage even as the market is doing well is a huge problem -- it means the issue is not a cyclical slowdown in the economy, but rather the fact that YOU ARE MAKING COMMITMENTS THAT ARE OUT OF LINE WITH WHAT YOU WILL EVER CONCEIVABLY BE ABLE TO PAY.<br /><br />Bottom line: if you think PERS will average 20+% returns over the next 30 years --which is what it has to do to avoid eating its capital and eventually collapsing-- then by all means drink the Kool-Aid.<br /><br />If on the other hand, you realize that assumption is insane, it's time for some real grown up talk on what employees have to contribute, when they can retire, and what they can expect when they do.Anonymousnoreply@blogger.com