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Radogno “stuns” Quinn with pension reversal

Friday, Aug 17, 2012

* There was one surprise yesterday

Already slim chances that Friday’s special session of the Illinois General Assembly will result in state pension changes might have vanished altogether Thursday, when Senate Republican Leader Christine Radogno revoked her support for a halfway measure GOP senators previously helped pass.

Top aides to Gov. Pat Quinn said they were stunned by Radogno’s reversal, but they still hope to salvage the pension session. They said they have received positive feedback from credit-rating agencies about the partial pension proposal.

The bill, House Bill 1447, applies only to pension systems covering state employees and legislators, not to those covering downstate teachers, university employees and judges.

Speaking before Republican Day at the Illinois State Fair, Radogno said lawmakers should act to bolster funding for all five systems. She dismissed the idea that approving HB1447 would help the state’s bond rating.

“That’s ridiculous, to think that it would somehow avert a downgrade,” Radogno said.

* Senate GOP Leader Radogno has now allied herself with House GOP Leader Tom Cross and against a couple of key members of her own caucus on pension reform

Senate Minority Leader Christine Radogno originally voted in favor of HB1447 [which passed the Senate with bipartisan support in May] but backed away from the proposal [yesterday]. “When it was passed, we were pretty clear that we thought that it was inadequate in terms of the fact that it only covered two of the five systems,” Radogno said. She cited concerns over estimates that could put the unfunded liability pension at a higher figure than the oft-cited $83 billion. “That bill clearly is not enough.” Radogno agreed with Cross that passage of the bill in the House could stall efforts at more comprehensive proposals. “The concern is that it will stop forward progress because a lawsuit will immediately be filed, in which case probably the party in power would say, ‘Well, we’ve got to wait until that unfolds and see what happens.’ So it’s just inadequate on too many fronts at this point.”

But not all of her GOP colleagues see it that way. Sen. Bill Brady, a Bloomington Republican, called HB1447 a “half measure,” but he said that if it is the only option that can gain enough backing to pass, he would support it. “Something’s got to be done,” Brady said. “This is the only solution on the table. Rome’s burning, and we need some incremental solution for this problem.” Brady does not share Cross’ and Radogno’s concerns that passing the bill would freeze efforts to reform the other systems. “I would argue that if we pass this, it will lead to passage [of reform] in the other systems.”

Sen. Matt Murphy agreed. “For those that say that it’s not enough and passing this doesn’t qualify as real reform, I agree wholeheartedly.” However, Murphy, a Palatine Republican, said he doesn’t think passing HB 1447 would hurt the reform process, and he said he would support it. “Personally, I don’t think the fact that we pass some pension reform means anybody thinks we’re done. I don’t think we’re done with just this bill, and I don’t think it takes the pressure off to solve the rest of the problem,” he said. “I think you can take what you can get now and then don’t slow the momentum. Use it as a springboard to finishing the job on the other systems.”

* Not everybody is happy with this development

“They want to raise our property taxes to help fix a broken pension system,” Illinois House Minority Leader Tom Cross (R-Oswego) told the crowd.

It’s that kind of rhetoric that frustrates advocates pushing pension reform.

“It’s unadulterated nonsense. Everybody talks a great game, they go nowhere,” Ty Fahner says.

* Some pension background

Legislators wrestling with the pension problems today are getting hammered by payment increases dictated by a law passed in 1995. Back then, Republican majorities in both chambers wanted to shore up the pension system, whose assets had dipped to only 54 percent of the money required to meet its obligations. So they passed a plan to return the pension systems to a 90 percent funding level over 50 years.

But the 1995 plan laid out a gradual path, and for 15 years the state’s payment increased only slightly. The bills started growing steeper in 2010, in the immediate aftermath of the Great Recession. Kelly Kraft, a Quinn spokeswoman, says leveling out the “ramp” must be part of a comprehensive deal to get pension payments under control.

State officials have deviated from the 1995 plan several times. For example, during former Governor Rod Blagojevich’s first two years in office in 2003 and 2004, the state issued pension obligation bonds and invested the borrowed money in the market, counting its projected profits as those years’ pension contributions.

Under Quinn, the state borrowed money for two years to make the pension payment. Now it has to pay those loans back, with interest, while also finding money for the ramped up payments.

Ralph Martire, executive director of the Center for Tax and Budget Accountability, a group that advocates better services for the poor, argues that worker benefits are not the root of the problem. The normal cost of providing pensions, he says, actually decreased slightly this year.

The real problem, Martire says, is that lawmakers skimped on pension payments for decades. They kept taxes low and provided more services than they could afford by depositing IOUs instead of cash into the pension funds. Now those IOUs are coming due. “In Illinois,” Martire says, “it isn’t a pension crisis. It’s a debt crisis.”

* But

A bipartisan report from earlier this year shows that about 44 percent of the debt is because lawmakers and governors didn’t pay enough into the retirement funds over the years — sort of like skipping payments on a 401(k).

About 22 percent of the problem comes from poor investment returns, especially recently during the recession. About 9 percent is because of increases in benefits over the years.

The other 25 percent stems from a variety of other factors.

* You can follow the special session on pensions today by clicking here.

- Posted by Rich Miller        

52 Comments
  1. - Oswego Willy - Friday, Aug 17, 12 @ 10:48 am:

    ===Senate GOP Leader Radogno has now allied herself with House GOP Leader Tom Cross and against a couple of key members of her own caucus on pension reform…===

    Well, let’s call it like it is … She might not HAVE a caucus ‘of her own’ after November, so going against what is considered ‘her caucus’ at this rate is not THAT suprising …

    I mean, what else can she do? Between Cullerton’s Map and this decision specifically, She is a ‘leader’ on an island. So, go with Cross, and roll the dice, right?


  2. - PublicServant - Friday, Aug 17, 12 @ 10:52 am:

    Rich, linking to the bipartisan report instead of the Herald article about the bipartisan report which provides no link to it, would be much appreciated.


  3. - wordslinger - Friday, Aug 17, 12 @ 10:55 am:

    –“Something’s got to be done,” Brady said. “This is the only solution on the table. Rome’s burning, and we need some incremental solution for this problem.” Brady does not share Cross’ and Radogno’s concerns that passing the bill would freeze efforts to reform the other systems. “I would argue that if we pass this, it will lead to passage [of reform] in the other systems.”–

    Some common sense and leadership demonstrated by Sens. Brady and Murphy. Good on them.


  4. - Demoralized - Friday, Aug 17, 12 @ 10:59 am:

    Does Sen. Radogno not realize that her new found position, after she backed this bill, makes her look like an idiot?


  5. - Sue - Friday, Aug 17, 12 @ 11:05 am:

    Rich- why hasn’t TRS released its June 30 year end performance- most of the larger systems around the Country have already released preliminary numbers- Is this delay intentionally being kept past the special session to avoid even a bigger public outcry


  6. - walkinfool - Friday, Aug 17, 12 @ 11:08 am:

    They should do the whole loaf, but it’s apparently not happening right now.

    I was also surprised by Radogno’s switch; she’s usually smarter than that. Passing half-a-loaf would help rather than harm the subsequent drive for needed changes.


  7. - 47th Ward - Friday, Aug 17, 12 @ 11:17 am:

    Brady and Murphy aren’t interested in getting on Ty Fahner’s bad side. Raqdono’s bigger problem, as I see it, is that she’s already got some of her members out there on this vote, but has nothing to show for it. That’s lose-lose. Those members will still get hammered for voting for it from AFSCME and her caucus will get hammered for not passing something by the Commercial Club and the Tribune.

    She’s tied herself to Tom Cross and this is surely going to result in a challenge to her leadership. Something is better than nothing on pensions. This one is going to leave a mark.


  8. - Irish - Friday, Aug 17, 12 @ 11:25 am:

    Yes there is a problem. Yes it needs to be fixed. But let’s make this post from “Some pension background…” to the beginning of Comments the press release that gets published in every paper and carried on every other media outlet in Illinois. It is the most succinct, honest, explanation of the pension problem I have seen. Let’s start with the truth so everyone understands the issue and the demonizing can end. We can sit then down and find a solution.


  9. - soccermom - Friday, Aug 17, 12 @ 11:33 am:

    The 1995 plan was completely arbitrary. The ramp had no actuarial basis, and the target date was pulled out of the air. Let’s start from scratch, make the actuarial principles available to all, and come up with a plan that makes sense for retirees, current employees and taxpayers.


  10. - Oswego Willy - Friday, Aug 17, 12 @ 11:55 am:

    ===Does Sen. Radogno not realize that her new found position, after she backed this bill, makes her look like an idiot?===

    Well, at least she will get some “exposure” ….

    ===…and this is surely going to result in a challenge to her leadership. ….===

    100% concur, and I 100% believe Radogno knows this too and is literally fighting on too many fronts, (election to new distirct, ILGOP, SGOP caucus) to do what Madigan does best, look 3 steps ahead.

    This will be the “day” Radogno will back on when others ask, “Why are you NOT Minority Leader in the Illinois Senate?”

    It took Pension Reform to do it, but Radogno blinked, and it will cost her the Caucus …


  11. - western illinois - Friday, Aug 17, 12 @ 12:08 pm:

    I think Ty and and his big biz buddies didnt pony up enough cash and suddenly this is no longer an urgent issue
    But its a great chance to create chos and teh GOP is really good at that and it seems to help them politically


  12. - JustMe_JMO - Friday, Aug 17, 12 @ 12:12 pm:

    Irish - Legislator needs to read it too.
    I still have this Chicago Tribune article bookmarked “Digging a pension hole” from Dec. 2011 http://tinyurl.com/8scno28

    They should read it too.

    The pension systems do need to be standardized / simplified and changed but they are not what caused the crisis.


  13. - Anonymice - Friday, Aug 17, 12 @ 12:14 pm:

    “Top aides to Gov. Pat Quinn said they were stunned by Radogno’s reversal . . .”

    “We thought only the Governor could flip-flop!”


  14. - Liberty First - Friday, Aug 17, 12 @ 12:35 pm:

    The one thing we know is they won’t pay the bill!


  15. - Professor - Friday, Aug 17, 12 @ 1:14 pm:

    I checked out the pew article and it is mislead because it attributes a big percentage to poor investment returns. If your never putting money into the system, you don’t get the returns. These funds have averaged a return of around 9% over 30 years so the problem is not the mismanagement of fund but the lack of compound interest.


  16. - Liberty First - Friday, Aug 17, 12 @ 1:19 pm:

    IMRF has 9.95% 30 year average return on their fund and is over 80% funded- why? their members have to make the payments….


  17. - Cook County Commoner - Friday, Aug 17, 12 @ 1:30 pm:

    If this is what we are going to go through for the annuity part of the pensions, which have some funding, I can’t wait to see what they do with the healthcare piece, which I understand is pay-as-you-go without any reserve. And what about all the local government pension plans?

    There is a structual problem with most government employee pension plans, not just Illinois. The often generous monthly payments, 3 % COLAs and early full retirements (pre-62) coupled with increasing life-spans, flat private sector wages,high unemployment in most of the private sector and an unattractive investment market render them unsustainable, unless citizens are ready for increased taxation and decreased government services.

    These things were designed for a fantasy island economy. The only solution is dissolution of the plans with establishment of a federal take-over plan. The Federal Pension Benefit Guarantee Fund provides back-up for private sector pensions which go broke up to about $ 45,000.00 a year. Something along these lines appears to be only the solution, backed up by the federal printing presses.


  18. - jake - Friday, Aug 17, 12 @ 2:02 pm:

    I think Shakespeare had a phrase describing today’s session—”Much sound and fury, signifying nothing.”


  19. - Anonymous - Friday, Aug 17, 12 @ 2:32 pm:

    Brady should well know Rome is burning..he was standing with his fellow legislators and former governors as they put the torches to it.


  20. - Mark - Friday, Aug 17, 12 @ 2:47 pm:

    The pension protection clause should have included a prohibition on enacting benefit increases to the pension calculation formula and rules. In other words, a benefit freeze clause should have been included in the pension protection clause, meaning no new benefits can be enacted. The pension protection clause should have applied to 1970 benefit levels, not all the benefit increases that have subsequently been enacted.


  21. - Anon - Friday, Aug 17, 12 @ 2:51 pm:

    The GASB’s new information indicates that the pension liability is closer to $140 billion, not $80 billion as originally thought when the bill was passed in the spring. This is why leader Radognl no longer supports it.


  22. - Mark - Friday, Aug 17, 12 @ 2:59 pm:

    And since there is no social security protection clause, there should be no pension protection clause. These State of IL pensions including fire and police are wrong on so many different levels. They are completely out of line of what taxpayers in the private industry receive; why should such taxpayers fund benefits completely out of line with what they themselves receive.


  23. - wordslinger - Friday, Aug 17, 12 @ 3:11 pm:

    –The GASB’s new information indicates that the pension liability is closer to $140 billion, not $80 billion as originally thought when the bill was passed in the spring. This is why leader Radognl no longer supports it.–

    It’s not new information, but different accounting standards — and everyone has known they have been coming for some time. If they didn’t, they were completely disengaged.

    How does it explain doing nothing instead of something, anyway?


  24. - Yellow Dog Democrat - Friday, Aug 17, 12 @ 3:53 pm:

    Foolish move by Radogno, politically and policywise.

    I wonder who is REALLY calling the shots here. I don’t think its Cross. Someone has fed both of them this crazy conspiracy theory excuse about lawsuits.

    I’m no legal expert, but I’m assuming that a suit is all ready to be filed against the pension bill. And because the suit will raise Constitutional questions, it will move pretty quickly to the Supreme Court.

    Does anyone have a sense of what the timeline would be?

    I think it likely that we’ll get a ruling long before the July 1st effective date.


  25. - Rusty618 - Friday, Aug 17, 12 @ 4:44 pm:

    So if 44% of the pension dept is because the lawmakers and governors didn’t pay into the retirement fund, shouldn’t they be the one’s who have to repay it and not the state employees who have consistently payed into it? And the people who were (politically) appointed to invested the money didn’t know what the heck they were doing. Shoot, I’ve doubled my money in deferred comp, so maybe I should take over the investing!


  26. - steve schnorf - Friday, Aug 17, 12 @ 5:17 pm:

    For the debate that is going on here in Illinois, the GASB number is for all practical purposes, meaningless. To start talking about it now would lead to an additional apples and oranges twist to an already complicated subject.


  27. - steve schnorf - Friday, Aug 17, 12 @ 5:30 pm:

    During the House debate, I believe I heard someone say that the pension systems should be looking at a 5.5% assumed rate of return, which would substantially raise the unfunded liability number. So, I did a quick online search to see if the speaker was on to something I didn’t know (though I did know that 2 of our3 big systems recently lowered their assumptions).

    Here’s what I found. For corporate funds, the current average assumed rate of return is 8%, down from 9.8% 12 years ago. I would point out that private enterprise is who my R cohorts believe we should emulate. For public systems, the current average assumed rate of return is 7.8%.


  28. - geronimo - Friday, Aug 17, 12 @ 5:45 pm:

    Ty Fahner. Please explain why this person is calling any kind of shots for multiple thousands of people. Please explain the unadulterated power this person has. Is this some kind of appointed dictatorship?


  29. - geronimo - Friday, Aug 17, 12 @ 6:03 pm:

    Nuf said.
    http://preaprez.wordpress.com/2012/08/15/the-civic-committees-ty-fahner-it-would-border-on-the-criminal-if-they-did-this-in-the-private-sector/


  30. - soccermom - Friday, Aug 17, 12 @ 6:09 pm:

    Oh Schnorf. You and your facts.


  31. - soccermom - Friday, Aug 17, 12 @ 6:12 pm:

    Rusty, are you really suggesting that our current and former governor and lawmakers look under their respective refrigerators and come up with $70 billion in loose change?


  32. - Mark - Friday, Aug 17, 12 @ 6:19 pm:

    A higher rate of return incents investment managers to make riskier investments in times they would rather remain cautious. If those risky investments turn sour, then you have an even larger underfunding. The rate of return on US Treasuries is so low now and there are so many uncertainties globally that shooting for a high rate of return is risky, irregardless of past performance. Past performance does not guarantee future results. It depends on your risk tolerance. Shoot too high and you may end up with less, because although these pensions are guaranteed it seems very unlikely they will be paid 100% due to a whole host of factors. You will see in the upcoming years there are municipal pension problems similar to these state pension problems and add on to that the federal deficit. There is not unlimited money. Remember the United States is so large people have a choice of 48 states they can choose from in the continental US and remain a US citizen, whereas in Europe the countries are much smaller. While the unions were negotiating salary increases they could have been instead advocating some of that money go to pension payments. Instead incredibly some unions were advocating more money to current salary in lieu of pension payments. There is an infinite not infinite amount of money available in a budget.


  33. - Mark - Friday, Aug 17, 12 @ 6:21 pm:

    finite not infinite.


  34. - soccermom - Friday, Aug 17, 12 @ 6:24 pm:

    And here’s a mad, crazy thought — Why did we leave the high ground on this debate to the rich white guys on the Civic Committee?

    They only sound sensible because of all the hollering and misinformation coming from the public employees unions. My 77-year-old mother came to me in tears because her union told her she was going to lose her pension, and she didn’t know how she was going to live.

    Wouldn’t it have been useful to pull some facts together, and focus on average pensions in each district? (The ‘average pension statewide” number is useless.) How about the actions that school boards have taken to load up the pensions of favored administrators, at the expense of Illinois taxpayers?

    Maybe they could have presented a set of compromises that would cap individual public pensions at, oh, $125,000? And backed that one up with some figures on how many retirees’ pensions exceed that figure, and how much they cost the systems each year?

    I have heard no acknowledgement from the union leaders that many of us in the private sector have seen our salaries diminish or vanish over the past five years, nor has there been any calm discussion of the reality that pensions are no longer a part of compensation for most private-sector employees.

    There also has been no push to consolidate the five systems and come up with an honest, transparent way to run them efficiently and profitably.

    I think this has been a missed opportunity by the public employees unions to align themselves with middle-class people against the fat cats in the Civic Committee and the fatter cats at the top tiers of the pension systems. And it’s a shame, because my husband and I owe our educations and our careers to the advocacy of the teachers unions, who made sure that his dad and my mom were fairly paid.


  35. - Mark - Friday, Aug 17, 12 @ 6:29 pm:

    In most suburban Chicago school districts if residents knew the actual salaries, benefits, and pensions of teachers and superintendents since 1999 there would be even more negativity. Very few residents know the actuals because all that information is very time consuming to obtain in its entirety. While you can look up an employees pay or pension, it’s not easy to piece it together over time and to add the benefits, pension pick-ups, etc.


  36. - Anon - Friday, Aug 17, 12 @ 6:34 pm:

    I support Radogno and Cross all the way. I don’t think that the Dems have offered anything that comes close to solving the problem. Keep cutting. Start by rolling back all the increased benefits, and cut more from there. For example, don’t allow workers to increase the size of their pensions in their final employment year via special bonuses and unused vacation and sick days.


  37. - PublicServant - Friday, Aug 17, 12 @ 6:46 pm:

    Dear drive-by anti-pension commentators,

    See you in court where you’ll finally be shut-up.

    Sincerely,

    State Employees who are owed their constitutionally-protected, contractually backed, deferred compensation pensions.


  38. - Mark - Friday, Aug 17, 12 @ 7:11 pm:

    Courts can’t print money. They are not the Fed. What a scam the pension protection clause is. Guarantee the pensions, then pass legislation to enrich them. What a farce.


  39. - geronimo - Friday, Aug 17, 12 @ 7:42 pm:

    Wonder why some of the critics didn’t opt for those hot damn salaries of the public employees back in their day? Not too late for some of you!


  40. - Anonymous - Friday, Aug 17, 12 @ 8:15 pm:

    @Mark-If you have something to add that actually seems coherent and based on fact then please do…if you wish to continue on your same overwrought unintellible rant go somewhere else. Rich must be busy at the fair or he would have deleted your nonsense.


  41. - Mark - Friday, Aug 17, 12 @ 8:36 pm:

    What did I say that’s incorrect? Sometimes when people don’t agree with you, their posts don’t get deleted. I’ve worked for State govt, Federal govt, and private enterprise.


  42. - Oswego Willy - Friday, Aug 17, 12 @ 9:44 pm:

    - soccermom -

    You are one of the BEST!

    I always learn something, and you can drop a line with the best of them.


  43. - The REAL Anonymous fka Anonymous - Friday, Aug 17, 12 @ 10:16 pm:

    =Rich must be busy at the fair or he would have deleted your nonsense.=

    Either that, or the open discussion isn’t bothering him much.


  44. - RNUG - Friday, Aug 17, 12 @ 11:03 pm:

    soccer mom,

    I’ve been saying the unions let this go two years without any significant push-back, so now Joe Voter believes the Chicago misinformation.

    You can crunch the openthebooks.com web site data to get that kind of information. It’s a little clumsy to gather the way they do it, but it is there. I think I posted some of it a while back. Anyway, I did a bit of the work for you just now. Here are some facts:

    In the SERS / JRS / GARS, there are 11 people receiving a pension of $125K or higher out of a total of 47,936, or approximately 0.02% (that’s 2/100th’s of one percent)

    For TRS, the same comparison number is 784 out of a total of 91,201 or about 0.9% (9/10ths of one percent)

    For SURS, the same comparison number is 717 out of a total of 44,470 or about 1.6%

    If we look at median, ie, half above and half below, we get approximately the following (the tool doesn’t let me define small enough filtering increments to be more exact):

    SERS/JRS/GARS - $27K annual

    TRS - $48K annual

    SURS - $27K annual

    These median numbers seem to pretty much support the average pension claims of about $28K to $32K (note: median is not the same as average)


  45. - RNUG - Friday, Aug 17, 12 @ 11:18 pm:

    I haven’t seen anyone really comment on the GA failing to change GARS. Got to thinking (always dangerous) about the flip side of it.

    The GA is in a unique position conpared to the rest of us; they vote on things that affect themselves.

    If the GA had approved changing / abolishing their system (GARS), even though it would be in violation of the Pension Diminishment Clause, would it be legal under straight contract law since they would have, in effect, made a (mostly) individual choice to voluntarily give up their rights?

    My gut reaction is it might be legal for them to do it to themselves but not legal for them to force such a change on the other systems.


  46. - Flan - Friday, Aug 17, 12 @ 11:34 pm:

    Bond rating systems love cutting pay and retirement benefits for working Americans; I imagine they only get more excited by seeing CEOs getting pay raises. Those couldn’t possibly be related…?

    P.S. Quit calling it Pension “reform”. It’s not reform, it’s reduction.


  47. - wordslinger - Friday, Aug 17, 12 @ 11:35 pm:

    Soccermom and Schnorf, thanks, as always for bringing some precious sanity and informed insight to this increasingly painful and dull discussion.

    Speaking only for myself, here, I believe, are some facts:

    –The State of Illinois and the United States of America are sovereign, going concerns that have never defaulted or been late on bond or pension payments. They are golden.

    – No matter what the rating committees say (love my analyst pals at the agencies), the smart money on Planet Earth is currently pouring money into any and all United States debt as a safe haven. Borrowing rate are at historic lows.

    –There is a negative cost of borrowing right now. Even in the current economy, what you borrow now, you’ll pay back less later. Once, inevitably, inflation ticks higher, you’ll pay even less back.–

    –The historic, conservative, 8% rate of return is entirely reasonable on long-term investments. If you don’t think so, the pension issue is the least of our concerns. Buy canned goods, bottled water and ammunition. But that’s only if you rattle easily and have lost your nerve.

    I’m not for borrowing for borrowing sakes, but any damn fool can run the numbers and see today’s debt casino is the opportunity of a lifetime.

    We have deep-stuff problems (and always have), but we can pay less taking care of them now with prudent action in the debt markets.

    I don’t think we’ve ever seen this kind of market before, and, God forbid, we ever do again. It ain’t healthy for the average bear.

    If these low debt rates keep up, believe me, we have bigger problems than pensions.


  48. - RNUG - Friday, Aug 17, 12 @ 11:43 pm:

    Word,

    You’re on target …


  49. - Mark - Friday, Aug 17, 12 @ 11:44 pm:

    The State of Illinois is Golden? There’s a lot of vendors that would disagree with that statement. The State has a backlog of $6 Billion in unpaid bills. Now that the interest rate can’t be lowered much, what options do we have left to try to stimulate the economy? We tried borrowing. We raised taxes. What’s next. You know what’s really ironic. Corporate America that you slam. Your pension funds invests in Corporate America. If you hate Corporate America so much, insist your pension funds don’t invest in Corporate America.


  50. - Mark - Saturday, Aug 18, 12 @ 12:04 am:

    There are some very big pension plans who don’t think an 8% rate of return is so safe, including CALPERS and California State Teachers Retirement System lowered from 7.75% to 7.5% in 2012.


  51. - Mark - Saturday, Aug 18, 12 @ 12:14 am:

    Here I found a statistic for the concern over 8% rate of return.
    “More than a third of 126 state and municipal pensions, including the California Public Employees’ Retirement System, the largest with $238.5 billion in assets, have cut investment assumptions since 2008 as returns have lagged behind historical averages, according to the Public Fund Survey.”
    www.businessweek.com/news/2012-08-10/massachusetts-sees-8-percent-pension-gains-shunned-by-calpers
    The massive debt and pension obligations at the municipal, State, and Federal level are a major concern to businesses considering expansion. Major. Furthermore, the visibility into the finances of government is not as good as publicly traded companies, and you will see reforms in that area. These are very big problems.


  52. - wordslinger - Saturday, Aug 18, 12 @ 12:44 am:

    RNUG, I’d add, just from personal experience, most of the people I know don’t give a damn about public employee pensions, no matter the cost, no matter the fairness, because they’re sweating bullets about their own personal situations.

    That’s a damn shame. But they’re not looking to hose anyone either. They want to live up to their commitments.

    Here’s the villain:

    -The Tribune Co. — the World’s Greatest Newspaper, WGN-TV, WGN-Radio and assorted outlets — is despicably dishonest.

    Yeah, we all know the relatively few politicians, Outfit guys and Golden Child school administrators and scammers rang up the system like a pinball machine.

    It’ not like the old Tribbies are part of that establishment.

    But the great majority of teachers, cops, firemen and state employees don’t deserve that abuse.

    Certainly not from the Tribbies. These old abused spouses got robbed of their ESOP by Zell to buy the old gal. Now they defend that treatment.

    Like Soccermom said, let’s start from scratch. Sober up and run the numbers.

    It ain’t as scary as the Chicken Littles will make you think. And we can, over the years, make adjustments, and I’m talking within a national health care policy, and keep faith with our neighbors.

    And I assure you, I don’t give a flying…. doughnut what a rating agency committee thinks about that.

    Like Phil Rock said…”I don’t have any constituents on Wall Street… My constituents are on Madison Street.”

    The rating agencies can pound sand. They have no credibility, and the market pays no attention to them anymore.


Sorry, comments for this post are now closed.


* Flash Index rises slightly
* SUBSCRIBERS ONLY - Fundraiser list
* The bridge that almost wasn't
* News from the campaign front
* The numbers are pretty clear, so don't believe 14-3 is a safe bet
* It's just a bill
* Maybe things really are changing
* Open thread
* Yesterday's stories

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