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State pension fund investment returns fall short ( Colorado )
Herald ^ | June 22, 2016 | Peter Marcus

Posted on 06/23/2016 7:18:08 AM PDT by george76

State Treasurer Walker Stapleton and PERA Executive Director Greg Smith disagree about how serious the disappointing 1.5 percent return on retirement investments the Public Employees’ Retirement Association fund for 2015 will be in meeting future pension obligations.

...

State Treasurer Walker Stapleton said Tuesday’s announcement from the Public Employees’ Retirement Association is evidence of a mishandling by the board, in line with concerns he has raised for several years.

...

Stapleton is outraged. For several years, the Republican has shouted for more conservative assumptions. He worries about long-term stability under a high projected rate of return.

“PERA has assumed the moon and the stars from an investment standpoint,” Stapleton said.

“I’ve been the voice crying in the wind for years now because the patient doesn’t realize that the patient is sick ... and they continue to whitewash the problem.”

The 1.5 percent return for the year on its $43 billion portfolio falls well short of PERA’s assumed investment rate of return of 7.5 percent. Under the projections, it would take PERA 44 years to be fully funded.

...

By missing the assumed rate of return in 2015 by 6 percent, PERA’s unfunded liability increased by $2.2 billion to $26.8 billion, according to Stapleton. The result could be that PERA will not be able to meet obligations to retirees in the future

...

Smith also is eligible for a “retention award” ...

Between his salary and total bonuses, Smith could receive nearly $900,000 in total compensation in 2018, according to Stapleton, who said the board might want to consider tying Smith’s salary to investment goals.

“He could just basically have a couple more years of negative returns, punch the clock, collect a substantial six-figure retirement for himself, and let his successor deal with the mess

(Excerpt) Read more at durangoherald.com ...


TOPICS: Business/Economy; Crime/Corruption; Government; News/Current Events; Politics/Elections; US: Colorado
KEYWORDS: colorado; coloradotaxpayers; pensionfund; pensions; pera; taxpayers

1 posted on 06/23/2016 7:18:08 AM PDT by george76
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To: george76

Raise the tax on pot!


2 posted on 06/23/2016 7:22:12 AM PDT by refermech
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To: george76

Dave Ramsey says to expect 12% returns over time. What was this pension fund invested in to only get 1.5% and target only 6%?


3 posted on 06/23/2016 7:22:13 AM PDT by joesbucks
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To: refermech

Really. What happened to all the pot tax money? Frittered away already.


4 posted on 06/23/2016 7:28:42 AM PDT by wastoute (Government cannot redistribute wealth. Government can only redistribute poverty.)
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To: wastoute
Really. What happened to all the pot tax money? Frittered away already.


5 posted on 06/23/2016 7:30:58 AM PDT by Night Hides Not (Remember the Alamo! Remember Goliad! Remember Gonzales! Come and Take It!)
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To: joesbucks; All
"Dave Ramsey says to expect 12% returns over time. What was this pension fund invested in to only get 1.5% and target only 6%?"

I can't speak for Mr Ramsey, however I'd like to know if this pension is following a "De-Risking" strategy that many Corporations with Pension Legacy Cost issues are utilizing to reduce this cost. One strategy is not to promise the world and essentially invest in Corporate bonds and use them to fund up and coming retirees if you will. It is a multi step process Google it and learn more about this subject, it is interesting..

https://www.shrm.org/publications/hrmagazine/editorialcontent/2016/0216/pages/0216-pension-de-risking.aspx

6 posted on 06/23/2016 7:33:26 AM PDT by taildragger (Not my Monkey, not my Circus...)
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To: joesbucks

What was this pension fund invested in to only get 1.5% and target only 6%?

Democrats


7 posted on 06/23/2016 7:35:22 AM PDT by Nailbiter
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To: wastoute

Up in smoke dude...


8 posted on 06/23/2016 7:36:21 AM PDT by refermech
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To: george76

Returns, smehturns...we don’t need no stinkin’ returns.

“State Treasurer Walker Stapleton and PERA Executive Director Greg Smith disagree about how serious the disappointing 1.5 percent return on retirement investments...

....Smith received a nearly 20 percent pay raise last year. His base salary is $394,000, but he could receive a discretionary bonus of up to 30 percent, bringing his salary to at least $512,200. “


9 posted on 06/23/2016 7:36:47 AM PDT by moovova
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To: joesbucks

PERA’s assumed investment rate of return of 7.5 percent.

Short by 6 percent.


10 posted on 06/23/2016 7:38:04 AM PDT by george76 (Ward Churchill : Fake Indian, Fake Scholarship, and Fake Art)
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To: george76

Every Colorado State employee knows the exact date of their retirement and how much they’ll get. They live for that day. Don’t do much work, but they sure know that information. Very liberal people. I hope they take it in the shorts as they have given it to Colorado taxpayers so often.


11 posted on 06/23/2016 7:52:35 AM PDT by CodeToad (Islam should be banned and treated as a criminal enterprise!)
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To: joesbucks

Ramsey said that? 12%?? Unrealistic!


12 posted on 06/23/2016 8:15:23 AM PDT by goodnesswins (Alinsky.....it's what's for dinner: with Cloward Piven for Dessert)
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To: george76
State Treasurer Walker Stapleton and PERA Executive Director Greg Smith disagree about how serious the disappointing 1.5 percent return on retirement investments the Public Employees’ Retirement Association fund for 2015 will be in meeting future pension obligations.

Colorado should move to California's BizarroWorld, where CalPers is getting 8 percent on their investments... LOL! :)

13 posted on 06/23/2016 9:36:06 AM PDT by kiryandil (To the GOPee: "Giving the Democrats the Supreme Court means you ARE the Democrats.")
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To: goodnesswins

His standard line.


14 posted on 06/23/2016 10:26:00 AM PDT by joesbucks
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To: Nailbiter
That was a good return compared to the average pension fund for the Year 2015. The average of Big plans was 0.9% (Milliman). The target is not a yearly number but a number they believe reflects what they can compound at over longer term horizons. The average Corporate fund target (large plans) is around 7.25% so they have more conservative assumptions.
15 posted on 06/23/2016 10:30:51 AM PDT by bt-99 ("Get off my Lawn")
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