Sunday, June 19, 2011

Jerome Says He Reads the WSJ!

Jerome Stocks is the fellow who strongly defended the retroactive, toxic, massive pension INCREASE that will saddle our future in debt. That decision will undermine all of the rest of the city's programs and is a financial time bomb. The pension debt will force harsh budget cuts in the future. It has already started. It is long past due for Jerome to take this issue on directly. 

It will impact the public. It will impact city staff. Most likely, the younger city staff are going to get the shaft and the senior staff who failed to step up to this will sit pretty.

Also responsible for fueling the disaster, is Dalager, Houlihan, and that lady that Chief Muir just appointed to the Olivenhain Municipal Water District (appointing one of your buddies was a good move Chief, but I'm not sure the ratepayers want a member of the pension disaster squad on their water board).

This week, when talking about pensions, Jerome was proud to announce he reads the WSJ. That means he must understand the structural problem and for some reason still isn't going to take it on after all these years.

Some public pension funds are finding themselves caught in a squeezebetween actuaries worried about future benefit costs and local governments worried about immediate budgets strains.

The tension was on display last week, when California pension fund Calpers decided to hold its expected annual return rate steady. The fund's actuary had recommended that the California Public Employees' Retirement System adopt a more-conservative long-term investment expectation; nearly a dozen local officials attended a meeting last week to urge Calpers not to change the rate.

Calpersagreed to the status quo, which will help the governments avoid higher-contribution payments near term. But if Calpers over time fails to hit its investment target, it eventually will come up short of its goals—potentially causing a burden that will fall on governments in the future.

The issue highlights a debate that has caught fire in recent months:whether the underfunding at many public pension funds is partly aresult of unrealistic investment expectations as well as accountingmethods that underestimate the true size of liabilities.

In deciding to keep its assumed investment return rate at 7.75%, theboard of the $227 billion fund cited hardships that a lower rate would inflict on local governments. Calpers also said it thought the return was achievable. The fund's decision is drawing criticism from some who contend it was made for the wrong reasons.

Associated Press
CalpersPresident Rob Feckner, left, and Vice President George Diehr last weekwhen the fund decided to hold its annual return rate steady.

"To say that you should adopt an assumed rate of return because you want tokeep contributions low is absurd," says Andrew Biggs, a resident scholar at the conservative American Enterprise Institute, who testified before a House panel last week. If Calpers's actuary is right, he says, "it means you will have to pay higher contributions in the future."

There are many things that can be done, but providing solutions to those who refuse to step up to address the problem is futile. The public looks forward to Jerome writing a response to all this and his explanation on why the city doesn't need to take action, and why the city should just grin and accept what ever CalPERs throws at them.

1 comment:

  1. Because Stocks is bought and paid for like a cheap whore. He's been owned by the unions and developers for years. I wonder what it is like to walk with no backbone of your own.


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