EXCERPT Police and firefighter pension funds are defying the law to keep embarrassing pension details under wraps. Bothrefused to supply the names and pension amounts of retirees when the Manhattan Institute's Empire Center requested it under the FOIA. So the think tank sued. The public has a clear right to the info....No doubt, cops and firefighters have been more than a little embarrassed by the spotlight.
Flagrant pension offenders: a NYPD cop collects a $58,000 tax-free NYPD disability pension -- at the same time he serves as deputy supt of the Port Authority Police Department, which pays another $198,500. An ex-FDNY Lt. who pockets $86,000 a year from his disability pension, even as he competes in triathlons.
SOURCE http://www.nypost.com/p/news/opinion/editorials/blue_wall_of_obfuscation_mMQWHKKbMyoVkWhr3VzkiN
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REFERENCE A NJ state Senator was greeted with resistance and belligerence when he tried to get info from the State Investment Council which invests pension funds. The Senator mentioned “disturbing allegations that placement agents” manipulated pension investments in NY, New Mexico, and elsewhere.
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REFERENCE 8/29/07
Pals of Pension Head Got Fees
NY Post Correspondent
Hank Morris----top political consultant to former Democrat state Comptroller Alan Hevesi (who was ousted in disgrace)----is affiliated with a slew of companies - including several using the address of his East Hampton home and one in the British Virgin Islands - that received pension-fund fees and are the subject of an investigation. Hank Morris, a Democratic campaign strategist, listed the five firms on a report filed with the Financial Industry Regulatory Authority, the largest nongovernmental regulator of U.S. securities firms. Four of the firms - Nosemote LLC, Pantigo Emerging LLC, PB Placement LLC and Purpose LLC - share Morris' East Hampton address.
Democrat Morris listed himself as the "sole member" of Nosemote, Pantigo Emerging and PB Placement, and said that Nosemote makes up half the members of Purpose. For the fifth firm, Athena Capitol Advisors Ltd., which has an address in Tortola, British Virgin Islands, Morris lists himself as a 50% owner, vice president and treasurer. According to Morris' filing, all the entities "act as intermediaries between money [managers] and institutional investors to facilitate introductions and resulting investments."
A source said the five Morris entities received placement fees from companies that won pension-fund business during Alan Hevesi's four years in office as state Comptroller. His office denied a request for a breakdown of fees paid to the individual firms. (NOTE: Hevesi and Morris were later indicted and convicted.)
SOURCE http://www.nypost.com/seven/08292007/news/regionalnews/more_hev_pal_firms_got_fees.htm
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TAXPAYERS MUST DEMAND Outside govt audits of pension investments to determine whether off-the-books accounts were accessed by insiders; whether pension funds were used in illegal schemes that might have integrated:
(1) money laundering,
(2) tax evasion (stolen money is taxable),
(3) violations of US banking and currency laws,
(4) conspiracy to commit wire fraud,
(5) commercial bribery in various financial schemes,
(6) secret offshore bank accounts,
(7) fraudulent and casual accounting practices,
(8) insiders w/ hidden interests in financial companies.
But re specifically the pension and benefits system, federal government is not quite as bad for the taxpayers as the states and cities "government entitlement racket," particularly in the blue states and cities, but they all point to the need of downsizing the government workforce and abolishing or reducing the influence of government employees' unions:
Excerpt from Public Pensions Face Underfunding Crisis Report: Philadelphia, New York, Chicago and Boston Top List of Cash-Starved Plans - AP, by Alan Farnham, 2010 December 13
An analysis by Robert Novy-Marx of the University of Rochester and Joshua Rauh of the Kellogg School of Management finds that public pension plans for America's 50 biggest cities and counties are underfunded by $382 billion -- or $14,000 for every household in those same cities. Some of the biggest plans may run out of money to pay promised benefits in as little as five to eight years. ..... < snip > ..... Year after year, municipalities have put off fully funding their pension obligations, just kicking the can down the road. Now, though, with the Baby Boom retiring, that road is running out. "For 30 years elected officials have failed to meet these 'boring' obligations," says Zuccht, referring to his city's and others' pension plans. "They preferred to spend their money on 'exciting' things like parks and libraries and recreation. Guess what? It's come due now. It's hit the fan." Cities claim their liability is less -- only $190 billion, or $7,000 per household. But Rauh and Novy-Marx say this lower figure is the result of government accounting that assumes too rosy a return on assets and underestimates the cost of pension promises. The professors use private sector accounting standards, then calculate how long the assets in each fund (as of June 2009) could keep paying out the benefits promised, as of that same date. ..... < snip > Two professors of finance are giving a sharp rap on the knuckles to Philadelphia, Boston, Chicago and other major cities. Their warning: Better fix your pension problems fast.
[PDF file] The table of 50 municipalities with the biggest underfunded pensions is at the end.
Article goes on to mention that, for example, in California, the "public service" obligations to pay are written into the state's constitution, gives an example of city of Vallejo go into bankruptcy to have the judge "pop the unions" and modify the public pension contracts, and contrasts it with the pensions in the private sector where this is not controversial...
That's just cities, the Pew Center estimates that the states' pension systems alone have a shortfall of about $1 Trillion.
This kind of burdens of government on productive private sector economy are simply not sustainable. "We are all Keynesians now" has led directly to "We are all bankrupt now."