Posted on 09/04/2010 9:15:19 PM PDT by NormsRevenge
The latest stark confirmation that California’s public employee compensation practices are unsustainable and have been horribly managed came this week with the release of a report that warned the University of California’s retirement system faced a $20 billion shortfall.
The report contained this astounding fact: Employees and UC didn’t pay a penny into the system for a 20-year span that only ended earlier this year. Why? Apparently, because there was a presumption the system was adequately funded. In a recent letter to employees, UC President Mark Yudof blamed this massive oversight on state officials. He said he will work with regents to develop new contribution rules to shore up the system’s funding, and then enter negotiations with labor unions to implement the new approach.
Those negotiations figure to be brutal. UC faculty members already complain their pay has lagged in recent years, and to cover the cost of retirement benefits, the university system and its employees will have to nearly triple the amount they began contributing earlier this year. But Yudof says UC has no choice but to take drastic action.
“If we do nothing, in four years the university will be spending more on retirement programs each year than we do on classroom instruction,” Yudof said in his letter.
Unfortunately, the UC president’s aggressive, constructive attitude is relatively rare among government leaders in California. But whether it’s UC, San Diego County, the city of San Diego or dozens of other local and state government agencies, we need a new way of thinking about public employee retirement benefits.
ALL who mismanaged those pension funds should be prosecuted immediately!
SS is going to change, these insane pensions have to change...
and change has to affect those already raking it in....its too late just to make new employees pay....the retirees out there now have to have some skin in the game...
SS is going to change, these insane pensions have to change...
and change has to affect those already raking it in....its too late just to make new employees pay....the retirees out there now have to have some skin in the game...
oops.....
Freeeeeeking unbelievable.
The CalPers cash cow has dried up —— TFB! When some state employees can retire at over their last annual salary there is something very very wrong. The unions have sunk this state and the very bad economy in California produces no
taxes to the state. The investments by CalPers are in the tank. Calpers bought very large rental and commerical properties which are producing no revenue and are worth nada in the current real estate climate. Yet the clowns that produced this sad state state of affairs continue to be supported by the unions. The union sheeple have to wake up, maybe no retirement checks will awake the union sheeple members.
Here that sound? That’s the sound of your taxes going up to cover this bungling.
So the supposed smartest people in the state in the UC system couldn’t manage their own retirement fund. What does that tell you about their ability to teach the younger generations?
Good grief!
California is hanging on longer than Generalissimo Francisco Franco.
I’ve been reading threads about California’s impending doom for at least five years now.
Will that place just go belly up already?
First, elected officials with an IQ under 85 should be disqualified; their knowledge of math, science, economics and ethics must meet some minimum standard. Failure to do so and catering to the egalitarianism of ignorance is demonstrably catastrophic to hundreds of millions.
A disaster that should happen only once; destroying the well being of all can't possibly be justified by the fiction that there is no practical difference between an ignorant imbecile and a normal person.
Second, retirement benefits must be acuarially sound, and pay-as-you-go, with the permanent proviso that errors due to incompetence or criminal fraud by the administrators (including the legislature) must be cancelled, retroactively. Followed by prosecution for criminal negligence in meeting fiduciary responsibility
It's mindboggling that these obvious necessities need to be debated.
I guarantee these people are among the condescending ruling elites quick to give advice and direction to the working classes.
If this was the private sector, a lot of dirtbags would be off to jail.
Those people are pretty smart, they haven’t paid in a penny but will get their pensions anyway.
Liberals really are pretty smart: they find big groups of people who they can extort, but still re-elect them.
Texas, here I come!
Isn't tripling payments to the government exactly what over 99% of academia calls for every day? They should be ecstatic to finally pay "their fair share"!
- Feliks Dzerzhinsky
(George Leggett, The Cheka: Lenin’s Political Police
[Clarendon Press, 1981], p. 252)
Hoist on their own petard...?
Too bad the Supreme Court ruled that the "honest services" prosecution could only be used for bribery or kickbacks.
Wait, never mind...
Cheers!
Pension funds all over the US, not just California, have been making stupid assumptions about annual returns of their portfolios now for the last decade.
There is a wide-spread assumption (ass, u, me and all that) that equities return 8% *on average* per year, measured over decades.
Well, for the first time since WWII, the past decade has shown NO return on equities. The broad market averages are showing that you’d have been much better off to have been invested in bonds over the last 10 years, with two 50%+ collapses in broad market valuations in the last 10 years. That also hasn’t happened since the Depression.
Yet, with the abundance of this evidence, pension funds continue to assume returns will “average 8% over the long term...”
They’re wrong. They’re not a little bit wrong, they’re wrong of epic proportions, and this is now coming back to bit the taxpayers in their wallets hard and fast in the next two years.
They were in fantasy land where they believed that everything would work out because they wanted it to.
Unsustainable and horribly managed,Mafia snickers.
As Cali gubernatorial candidate Jerry Brown grabbed the spotlight with his criticism of Bell city officials and their outrageous salaries and pensions, The Orange County Register Watchdog got to wondering: How much will the Democrat for Governor make in retirement?
That, as it turns out, is a very difficult question to answer.
After more than a month of investigation, the Watchdog can only say for certain that Brown and a handful of other top officials are eligible for generous benefits under a special pension fund so obscure that few people in government know how it works and many thought it had been eliminated 20 years ago by outraged voters.
Under the law, Brown should have accrued, at most, 16 years of service credit in this special fund, known as the Legislators’ Retirement System, or LRS. Actuarial statements produced by LRS, however, indicate that an unnamed person of Brown’s age and earning Brown’s exact salary has been credited with 25 to 29 years of service. The difference would mean tens of thousands of dollars in additional pension payments for Brown each year.
Brown’s campaign staff acknowledge the unnamed person sure looks like the gubernatorial candidate but have been unable to explain the discrepancy over service. Officials at the California Public Employees’ Retirement System, which manages LRS, have similarly refused to cooperate ... -snip-
But perhaps most eyebrow-raising is the service of a current LRS member identified in actuarial reports only as 65 years or older with 25 to 29 years of service and a salary of $184,301. -snip-
The person listed in the actuarials appears then to be Brown. -snip-
The only problem is Brown should have only 16 years of LRS-eligible service: four years as Secretary of State (1971 to 1974), eight years as Governor (1975 to 1982) and four years as Attorney General (2007 to 2010). (Excerpt) Read more at taxdollars.ocregister.com ...
Wednesday, May 19, 2010
Dow 28,000,000: The Unbelievable Expectations of California's Pension System
RE: California bill SB 400 granted billions of dollars in retroactive pension boosts to state employees, allowing retirements as young as age 50 with lifetime pensions of up to 90% of final year salaries.....What Calpers failed to disclose, however, was that:
(1) the state budget was on the hook for shortfalls should actual investment returns fall short of assumed investment returns,
(2) those assumed investment returns implicitly projected the Dow Jones would reach roughly 25,000 by 2009 and 28,000,000 by 2099, unrealistic to say the least
(3) shortfalls could turn out to be hundreds of billions of dollars,
(4) Calpers’s own employees would benefit from the pension increases, and,
(5) members of Calpers’s board had received contributions from the public employee unions who would benefit from the legislation. Had such a flagrant case of non-disclosure occurred in the private sector, even a sleepy SEC and US Attorney would have noticed.
=================================
Calpers Rocked by 'Pay to Play'
WSJ, 10/15/09, By CRAIG KARMIN AND PETER LATTMAN
America's largest public-pension fund, Calpers, revealed that a former board member had reaped more than $50 million in fees for arranging investments that could saddle state taxpayers with hundreds of millions of dollars in losses. The disclosure deepens concerns that alleged conflicts of interest are undermining state retirement funds.
The California Public Employees' Retirement System said it is launching a "special review" into payments by money managers-- including billionaire Leon Black's Apollo Management LP -- to firms including Arvco Financial Ventures LLC. Arvco is headed by Al Villalobos, who served on Calpers's board from 1993 to 1995. (Excerpt) Read more at online.wsj.com
SOURCE http://online.wsj.com/article/SB125553138534384951.html
=================================================
REFERENCE Julio Ramirez Jr, a San Marino businessman with long-standing connections to LA City Hall has pleaded guilty to criminal securities fraud as part of a probe of alleged pay-to-play corruption at a NY state gov't pension fund....... Ramirez is a former employee of Wetherly Capital Group, an LA investment marketing firm that allegedly gave kickbacks to a top political advisor of disgraced ex-NY Comptroller Alan Hevesi.
REFERENCE Dav-Wetherly Financial, L P
11601 Wilshire Blvd # 300
Los Angeles, CA 90025-0509
Location Type: Single Location
Est. Annual Sales: $68,000
Est.# of Employees: 1
An Israeli company-----Giza Venture Capital----- paid DAV-Wetherly Financial, of Los Angeles, a substantial finder's fee after it got authority to manage $20 million in NY state pension funds in 2005. ...
DAV-Wetherly, in turn, secretly gave part of the fee to a Connecticut-based company run by NY political insiders. The Israeli connection is suspicious----a crooked individual can debark in Tel Aviv from anywhere in the world, deposit a suitcase of cash in any bank, and no one asks where it came from, or whether taxes were paid on it.
=======================================
On May 12, 2009, the SEC announced charges against Julio Ramirez, Jr., formerly affiliated with LA broker-dealers DAV/Wetherly Financial, L.P. and Park Hill Group LLC, in connection with a multi-million dollar kickback scheme involving New York’s largest pension fund. Litigation Release No. 21036 SEC v. Henry Morris et al., 09-CV-2518 (SDNY) (CM)
On May 12, 2009, the SEC announced charges against Julio Ramirez, Jr., who was formerly affiliated with LA broker-dealers DAV/Wetherly Financial, L.P. and Park Hill Group LLC, in connection with a multi-million dollar kickback scheme involving New York's largest pension fund.
In an amended complaint attached to a motion filed today in federal district court in Manhattan, the SEC alleges that Ramirez participated in the fraudulent scheme by helping his friend and associate Henry "Hank" Morris extract kickback payments from Aldus Equity Partners, an investment management firm that was seeking to win investment business from the New York State Common Retirement Fund.
The SEC has previously charged Morris and David Loglisci with orchestrating this wide-ranging scheme to enrich Morris and others and has alleged that Aldus and one of its founding principals, Saul Meyer, also participated in the scheme by agreeing to pay kickbacks to Morris.
According to the SEC's amended complaint, Ramirez facilitated Morris's scheme by contacting Meyer and making clear to him that Aldus must pay a kickback to Morris to secure an investment from the Retirement Fund. Although Aldus was already negotiating with the Retirement Fund's investment staff about the proposed investment at the time, Aldus agreed to kick back 35% of its management fees to a shell entity run by Morris. Morris in turn paid Ramirez a portion of those fees. As a result of the quid pro quo, Aldus secured the Retirement Fund's emerging fund portfolio business, and Ramirez shared in the profits even though he performed no legitimate services.
The SEC's amended complaint alleges that Ramirez aided and abetted violations of Section Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940.
The complaint seeks permanent injunctions against future violations of the federal securities laws, disgorgement of ill-gotten gains with prejudgment interest, and financial penalties. The SEC's investigation is continuing. In a parallel criminal action, the Office of the Attorney General of the State of New York today announced the unsealing of criminal charges against Ramirez.
For further information, see Litigation Release No. 20963 (March 19, 2009), Litigation Release No. 21001 (April 15, 2009) and Litigation Release No. 21018 (April 30, 2009).
Not a good idea...
I plan on collecting mine at age 52.
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