Pension Board meeting 3/11

There was a Pension Board meeting tonight. Here's where the pension assets stood on June 30, 2008:Here's (approximately) where the pension assets stood on February 28, 2009:So there's lots to discuss.

But before we got to asset discussion, the actuaries from Hooker & Holcombe explained the liability side.

Some interesting facts for me:

1) non-teacher school employees are included in the pension plan

2) between July 1, 2006 and June 30, 2008 there were 58 new hires added to the Town's defined benefit plan

3) several million dollars gets added to the liability annually

So if you read this brief history of the Council's inaction on shifting from defined benefit plans to defined contribution plans, you'll see that we could've taken action in October 2006. Such action probably would've helped the town avoid adding 50 or so employees to the defined benefit plan.

And this would also offer those employees an added comfort... they would control their own destiny... rather than having to trust that future elected officials will continue to fund their pensions - decades from now.

Personally, I look at Social Security, Medicare and CTs state-controlled Teachers' Pension Fund and conclude that (collectively) politicians cannot be trusted with long-term liabilities. Heck... nationwide, public pensions face a trillion dollar shortfall. I don't know why anyone would trust that governments would consistently be occupied by a majority of members who look beyond the next election.

This underfunding is a huge problem that needs to be addressed in a variety of ways, including ending the option of defined benefit plans for future non-union employees.

We also learned that the January 23 redemption of the $2.4 million at UBP is not being distributed immediately. In fact, it's entirely possible that the Town would have to wait until the end of 2010 to get 100% of the money (though installments will likely be delivered sooner). That seemingly incomprehensible delay immediately made me start to wonder if that money was invested in all those wonderful alphabet-soup securities we now know by heart - MBS, CDS, ABS, etc. And if that's the case... are those securities worth anything? Would we need to wait for decades to get that money? Of course, that's pure speculation. So I asked the one question that made sense to me... what assets compose that $2.4 million in value? Unfortunately, UBP is a fund of funds... and that means we are more likely to get opacity, rather than transparency, with our investment. I couldn't get an answer tonight. But hopefully I can get an answer at the next meeting - April 29th.

Tim White