Retirement Advisory Board 12/10 (pensions)
The Retirement Advisory Board met tonight. The main discussion point was the recent results of the pension plan assets, not only the dramatic decline in value ($60 million to $40 million from June 30 to Oct 31), but also comparing those results against the established benchmark indices. Generally speaking, our pensions are trailing their indices.
An outcrop of these seemingly poor results (along with some other concerns) was the Pension Board looking for a second set of eyes.
Hooker & Holcombe are the actuaries who calculate the town's pension plan liabilities every two years. And they'll now be a second set of eyes on the town's pension plan assets.
From my perspective, this has actually been a pretty big-to-do over the past couple months. And I haven't spoken of it much for a variety of reasons. Nonetheless, I thank Board Chairman Tom Denne, Town Manager Michael Milone and Finance Director Patti-Lynn Ryan for getting this meeting together and making positive things happen for the town.
And though I'm not a voting member, I very much appreciated when H&H suggested new investment vehicles, such as "global bonds" and commodities. He's using different words, but it's quite similar to what I have in mind to hedge against the nearly certain major devaluation of the US Dollar in 2009 / 2010.
Tim White
1 comment:
I think the chickens have come home to roost.
For years, state and local governments didn't bother themselves with how pensions would have to be paid.p. These costs were all out in the future and the stock market kept going higher. Wow, the people who managed the pension funds were brilliant. The funds kept growing and growing and the terms for pensions just got more and more generous, after all, the funds were in great shape and based on an over optimistic expected return on investment the appeared to be actuarially sufficient. Retirement after 20 years and the granting of disabilities became easier and easier.
It is time to become realistic, there is no free lunch. Retirement benefits as well as other costs have to come down. And, as far as disabilities, the terms have to change. There are just too many cases of people claiming disability who almost immediately go out an get a comparable job, it has become a joke. If someone is unable to perform their job, then they should be offered another job and if they don't want to take that job, they can leave. And, anyone who does get disablity payments should lose a part of the payments whenever they happen to get other work. Disability payments should not be a means for increasing ones income or a way to retire early.
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